Thoratec UPDATE BUY  Target: US$36.00



US$31.19 BUY 
Target: US$36.00

Thoratec manufactures medical devices used for
circulatory support, vascular graft applications, and blood
coagulation testing. Thoratec’s ventricular assist device
(VAD) systems are currently marketed in the US and
internationally for use as a bridge to heart transplant and
for recovery of the heart after open-heart surgery. The
company has the only VAD currently FDA-approved for the
destination therapy indication.
All amounts in US$ unless otherwise noted.

Life Sciences — Biomedical Devices and Services
Investment recommendation
We remain positive on the long-term growth potential of the
LVAD market, owing to the size of the TAM (40k+ patients in US
alone), low penetration level (10%E in US/Europe; <5%E in
Japan) and next-generation technology coming down the pipe
(HMIII and MVAD), which we think will drive strong double-digit
growth in this duopolistic market for years to come. We continue
to favor Heartware common (HTWR : NASDAQ : $73.53 | BUY),
but reiterate our BUY on THOR as well. Owning both, while not
likely to elicit out-sized returns in the near term, could very well
do so over the next 12-18 months, in our opinion.
We are increasing our target to $36 from $30, reflecting not only
increasing optimism about the VAD market and THOR’s next-gen
pipeline (HM3, HM-PHP), but also to account for an uptick in the
mean small-cap comp group’s 2015 EV/sales multiple (3.7x
currently vs. 3.4x previously – ex-outliers).
Investment highlights
 Our 2016 estimates call for revenue growth of 4.7% to
$486M, gross margin expansion to 71%, and pro-forma EPS
growth of 4.8% to $1.35.
 For 2016, we estimate THOR’s US VAD revenue will grow
about 1% to $359M, but model faster OUS VAD sales growth
of 11% to $125M.


DXCM : NASDAQ : US$38.21
Target: US$48.00

DexCom is a medical device firm focused on pioneering
technologies for the continuous monitoring of glucose
levels in people with diabetes. The company has received
FDA approval for its short-term continuous glucose
monitoring system (CGMS), the DexCom STS system, and
in June 2007 gained approval for its second-generation
STS Seven system.

Life Sciences — Biomedical Devices and Services
Investment recommendation
We reiterate our BUY rating following strong Q2/14 results that came in
well above our and consensus estimates. Demand for the Gen4 system
continues, with pediatric sales demonstrating the potential to be a strong
lever for growth throughout 2014. Specifically, pediatrics accounted for
25-30% of new patient additions in the first full quarter of sales and are
expected to grow as the company further penetrates the pediatric
endocrinology market. Lastly, the JNJ/Animas VIBE SAP in the US and
DexCom Share both present potential upside to current estimates in the
Investment highlights
 Q2/14 results were well above our/Street estimates with product
revenues of $58.2M, up 64% Y/Y, well above our $51.7M estimate.
 Both durable revenues (~$17.5M) and consumable sales (~$40.7M)
beat our estimates of $14.6M/$37.1M, respectively.
 Product GMs of 67.9% were up Y/Y and beat our 66.6% estimate.
 2014 guidance was raised with product revenues now expected in the
range of $220M-$235M (~40%-50% growth Y/Y), up from $205M-
$225M previously.
We are increasing our price target to $48.00 from $40.00. We base our
valuation on an 11.8x EV/sales multiple applied to our 2015E revenue
estimate of $301.0M.

IDEXX Laboratories Raising to BUY



now at $132

Target Price $148

Life Sciences — Biomedical Devices and Services
Investment recommendation
We upgrade IDEXX Laboratories to BUY from Hold and raise our PT to
$148 from $116. We believe the rollout of Catalyst One in Q4/14 will
enable IDEXX to capture share in the lower-volume vet market and
accelerate 2015 revenue growth to 9%. We believe IDXX can achieve
double-digit organic revenue growth by 2016 driven by increased
penetration and conversion to Catalyst Dx, increased cross-selling in the
US from its revamped sales force, and significant global expansion.
Investment highlights
 Catalyst One is another growth driver. We raise our 2015 revenue
estimate by $30M to $1,635M (+9%) vs. consensus of $1,616M and
raise our 2015 EPS estimate to $4.38 (+14%) from $4.32. We
believe IDXX’s roll-out of Catalyst One (a scaled-down version of the
Catalyst Dx instrument) in Q4/14 will help accelerate consumable
reagent growth to 13% in 2015 and 14%+ in 2016.
 Introducing 2016 estimates. We introduce our 2016 EPS estimate of
$5.00, which assumes accelerating EPS growth of 14%+ on
revenues of $1,800M (+10%), consistent with IDXX’s goal of
achieving double-digit organic revenue growth.
 Balanced organic growth. We believe IDXX has solid visibility for
organic growth (8.8% average in the last three quarters) both within
the US (upgrade customers, modest share gains, new product revs)
and OUS. We believe global expansion in the EU, Brazil and Asia
represent major LT growth drivers, as countries outside the US
begin to approach levels of sophistication practiced by US Vets.

LeMaitre Vascular

LeMaitre Vascular markets devices used to treat
peripheral vascular disease (PVD) in either a surgical or
endovascular setting. Open vascular surgery products
comprise ~71% of sales, with endovascular and general
surgery accounting for 21% and 7%, respectively.
LeMaitre has over 65 direct sales reps and also uses
distributors. The company has a diversified product
portfolio with 16 product lines, none of which is more
than 20% of sales.

All amounts in US$ unless otherwise noted.

Life Sciences — Biomedical Devices and Services

The company’s prospects look very attractive to us
given the confluence of material cost-cutting initiatives, manufacturing
consolidation (both of which have been executed) and new, upcoming
product launches/approvals could drive significant gross and operating
leverage as 2014 progresses. In fact, we see a relatively clear pathway to
double-digit operating margins by Q4. Coupled with the company’s solid
execution of its strategy to build strong market share positions through a
diversified product offering, we would be buyers of LMAT. We maintain
our BUY rating and $11.50 price target.
We update our model to account for the completion of the company’s
secondary offering. We believe the offering provides LMAT with sufficient
cash to fund its commercial and product development activities, along
with the ability to augment its growth profile via tuck-in acquisitions,
opportunity for which should be abundant in a relatively fragmented
vascular device market.

Investment highlights

Our $11.50 price target is based on our small-cap medical device group, which carries a
median EV/Sales of 2.7x (ex. hi/low). Applying a 15% discount to this group multiple, we
apply a 2.3x EV/sales multiple on our 2015 revenue estimate of $75.8M.


HEICO Corporation BUY

HEI : NYSE : US$52.18

Target: US$65.00


HEICO is a leading provider of commercial aerospace
spare parts and repair services, as well as niche
technology and electronic products for the space,
defense, industrial, medical and other markets. The
company reports its results in two operating segments:
Flight Support Group (FSG) and the Electronic
Technologies Group (ETG).Transportation and Industrials — Airlines and Aerospace
Investment recommendation
We believe the 3.7% drop in HEI shares after its Q2 report was overdone.
Granted, the drop in ETG margins to ~20% was greater than expected and
the H2/14 ETG margin improvement may be slower than a one-quarter hit
would indicate. However, we continue to believe the fundamentals of the
business have not changed and would use the pull-back to revisit HEI
shares. While organic growth may slow due to more difficult comps, we
believe the FSG strength, strong cash flow, and expected 20% growth
across the cycle continue to justify a valuation premium. We maintain our
BUY rating and slightly lower our price target to $65.
Investment highlights
 The company did raise full-year EPS guidance by $0.03 (as expected).
However, we slightly lowered our 2014 EPS estimate to $1.79 (still
above guidance) based on a slower Q3/14 ETG margin improvement.
We maintain our 2015 and 2016 EPS estimates of $2.04 and $2.26,
respectively. Note that due to the lack of acquisitions, the company has
not raised its revenue guidance at all in 2014 (still at up 12%-14%).
 Organic growth in the FSG segment was an impressive 15%. The keys
for the stock in the near term are improvement in the ETG segment,
continued better-than-expected organic growth in the FSG segment,
and potential acquisitions, which would be positive catalysts. We
continue to believe HEI represents a high-quality stock with a very
strong outlook; the Q2/14 results represent a slight step back, but not
a change to our long-term positive thesis.
We lower our price target to $65, based on the average of a 32.0x EPS
multiple and a 15.0x EBITDA multiple, applied to our 2015 estimates.


All amounts in US$ unless otherwise noted.

Why Investors Love Drug Companies

  APRIL 28, 2014

Few people have done better in the recent stock boom than biotech investors. Biotech was the best-performing market sector last year, and in the past two years its stocks rose a hundred and twenty per cent. But suddenly, in late March, the stocks tanked, some falling more than twenty per cent in a few weeks. The selloff can be explained to some extent as a market correction and part of a wider flight from risk. But the real story concerns a revolutionary new hepatitis-C drug developed by the biotech giant Gilead.

Hepatitis C affects 3.2 million Americans; untreated, it leads to scarring of the liver and to liver cancer. Until now, the best treatments cured only about half of patients and often had debilitating side effects. But in December the F.D.A. approved the first in a new wave of hep-C drugs, Gilead’s Sovaldi. This is huge news—not just in medicine but on Wall Street. Vamil Divan, a drug-industry analyst at Credit Suisse, told me, “Sovaldi and the other new hep-C drugs are great drugs for a tough disease.” Sovaldi can cure ninety per cent of patients in three to six months, with only minor side effects. There’s just one catch: a single dose of the drug costs a thousand dollars, which means that a full, twelve-week course of treatment comes to more than eighty grand.

For Gilead this is great. Take an expensive treatment, multiply by a huge number of hepatitis-C patients, and you get a very lucrative business proposition. It’s also good news for patients. But it’s a big problem for insurers and taxpayers, who—given that hepatitis-C patients have an average annual income of just twenty-three thousand dollars—are going to end up footing much of the bill. There has been an uproar of criticism. Private insurers blasted Gilead’s pricing strategy; the pharmacy-benefit manager Express Scripts said that it wanted its clients to stop using Sovaldi once an alternative appears. Then, on March 20th, three Democratic members of Congress sent Gilead a letter asking it to explain why Sovaldi costs so much. The letter had no force of law, but it spooked investors by raising the spectre of what they most fear—price regulation.

Investors love drug companies in part because they often have tremendous pricing power. Drugs designed to fight rare diseases routinely cost two or three hundred thousand dollars; cancer drugs often cost a hundred grand. And, whereas product prices in most industries drop over time, pharmaceuticals actually get more expensive. The price of the anti-leukemia drug Gleevec, for instance, has tripled since 2001. And, across the board, drug prices rise much faster than inflation. The reason for this is that prices for brand-name, patented drugs aren’t really set in a free market. The people taking the drugs aren’t paying most of the cost, which makes them less price-sensitive, and the bargaining power of those who do foot the bill is limited. Insurers have to cover drugs that work well; the economists Darius Lakdawalla and Wesley Yin recently found that even big insurers had “virtually zero” ability to drive a hard bargain when it comes to drugs with no real equivalents. And the biggest buyer in the drug market—the federal government—is prohibited from bargaining for lower prices for Medicare, and from refusing to pay for drugs on the basis of cost. In short, if you invent a drug that doctors think is necessary, you have enormous leeway to charge what you will.

Still, this is an inherently fragile arrangement, dependent on our willingness to keep paying whatever the companies ask. The signs of a backlash are clear. More than a hundred cancer specialists have called for action to lower the price of cancer drugs. The chair of M. D. Anderson’s leukemia department co-authored an article saying that the cost of cancer drugs is “out of control.” The United Kingdom has announced a cap on annual drug spending, and Germany has adopted stringent rules to determine what drugs it pays for. Now Sovaldi has people talking again about allowing the U.S. government to do something similar. “It’s a growing issue, and this outcry may be a sign that we’re going to see more pushback,” Divan said. Every other developed country, after all, has some form of drug-price regulation, and it’s not as if drug companies then abandon those markets. Gilead sells Sovaldi in the U.K. for fifty-seven thousand dollars per treatment, nearly thirty per cent less than the price we pay.

Price restrictions have always been a political non-starter here, but at some point the math of the situation will be hard to resist. According to a study by the research group I.S.I., by 2018 spending on “specialty drugs” like Sovaldi could account for half of all drug spending in the U.S. Furthermore, one traditional argument against price controls is looking weaker: biotech companies claim that prices need to be high to reward risky and expensive innovation, but the fact that they’re churning out drugs and profits so consistently seems to undermine that claim. Biotech, in other words, may become the victim of its own success: the bigger the profits, the bigger the likelihood of regulation.

You might think that this prospect would encourage companies to be more cautious. But, if you assume that price controls are coming, the rational play is to squeeze out all the profits you can now. The uproar over Sovaldi may, somewhere down the line, help contain drug prices. But in the short run it could well make drugs even more expensive. And that’s what you call a serious side effect.


At AMP we are looking to Harris and Harris Group ( TINY) – little know and about to file for three or more IPOs in the next year.They avoid long periods of research and expensive investing by investing in advanced research projects.

OPKO Health ( OPK) is following the same route and has the backing of Dr. Phillip Frost – former head of TEVA.

or to the cynic


OPKO Health QRT. Report

OPKO Announces First Quarter Operating Results

  • 4Kscore™ Test successfully completed clinical validation study and launched on March 31, 2014
  • All RAYALDEE™ Phase 3 clinical trials have completed enrollment on schedule – top line data expected for release mid-2014
  • Cash and cash equivalents totaled $156.4 million providing sufficient liquidity to fund development programs

MIAMI–(BUSINESS WIRE)– OPKO Health, Inc. (NYSE:OPK), a multi-national biopharmaceutical and diagnostics company, today reported operating and financial results for its first quarter ended March 31, 2014.

Business Highlights

  • 4KscoreTest Launch: During the first quarter 2014, OPKO successfully completed the 4Kscore Test clinical trial in the U.S. and on March 31, 2014, launched the 4Kscore Test in the U.S. through its CLIA-accredited OPKO Lab in Nashville, TN. OPKO expects to begin offering the 4Kscore Test through its Spanish subsidiary in late 2014 and through its other subsidiaries shortly thereafter. The laboratory-developed test is designed to enhance the prostate biopsy decision making process that, in the U.S., leads to approximately 1 million biopsies being performed annually, with 80% of the results indicating no cancer or a low-grade cancer. The 4Kscore Test will help to reduce unnecessary prostate biopsies by providing information on the risk (probability) of having high-grade prostate cancer.
  • 4Kscore Data Presentations: OPKO will present data from its recently completed U.S. clinical validation study at two upcoming conferences: the American Urological Association (AUA) inOrlando, which selected “The 4Kscore Test as a Predictor of High-Grade Prostate Cancer on Biopsy” as a Late-Breaking Abstract for presentation in Plenary I on Sunday, May 18, 2014; and, the 83rd Annual Meeting of the New England Section of the AUA in October 2014 in Newport.
  • Completed Patient Enrollment in the Third Phase 3 Trial of RAYALDEEThis trial is a 6-month open-label extension of two ongoing identical randomized, double-blind, placebo-controlled, multi-site pivotal phase 3 studies for RAYALDEE intended to support marketing approval in the U.S. This third study is designed to evaluate the product’s long-term safety and efficacy in treating secondary hyperparathyroidism (SHPT) in subjects with stage 3 or 4 chronic kidney disease (CKD) and vitamin D insufficiency. OPKO is on schedule for releasing top-line pivotal data in the third quarter of 2014 and filing a New Drug Application (NDA) with the FDA in the first quarter of 2015.
  • Inspiro Acquisition: In April, OPKO entered into a definitive agreement to acquire Inspiro Medical Ltd., an Israeli medical device company with a new platform to deliver small molecule drugs such as corticosteroids and beta agonists, as well as its own new drug working with a novel mechanism of action, to treat respiratory diseases. Inspiro’s Inspiromatic™ is a “smart” easy-to-use dry powder inhaler with several advantages over existing devices.
  • Rolapitant Continues on Schedule For a Mid-Year NDA Filing: OPKO’s partner, TESARO announced it is on track for its NDA filing for rolapitant mid-2014 and anticipates completing a dose study for the intravenous (IV) formulation during the second quarter of 2014. The IV formulation is expected to be launched approximately one year after the oral product becomes available.
  • Key Management Positions Added: OPKO made a number of important additions to its management team: Greg Stanley joined OPKO as Vice President of Sales and Marketing for the Global Diagnostics Business Unit, and Scott Toner joined OPKO as Vice President, U.S. Marketing and Sales for the Renal Division.
  • Establishment of a Global Supply Chain Infrastructure and Holding Company Based in Dublin, Ireland: OPKO is expanding its presence by establishing a global supply chain operation and holding company in Ireland. OPKO is recruiting employees to support the ongoing launch of the 4Kscore diagnostic test and in anticipation of the commercial launch of RAYALDEE. The Irish operation is also expected to manage the global supply of other products over the next several years and to serve as a holding company for many of OPKO’s non-U.S. subsidiaries.
  • In January, OPKO completed the acquisition of Laboratorio Arama de Uruguay Limitada (“Arama Uruguay”), a privately-owned company located in Montevideo, Uruguay. Arama Uruguay will expand OPKO’s presence in Latin America and complement the business activities of its operations in Chile and Mexico, as well as permit commercialization of OPKO’s products currently commercialized and those in development.

Edwards Lifesciences UPDATE BUY

EW : NYSE : US$80.27

Target: US$86.00

Edwards Lifesciences manufactures minimally invasive
medical devices for the cardiovascular market. Its
primary product line is centered on heart valve therapy
and includes tissue valves, mechanical valves, and repair
products. It has a large offering for critical care, with key
products for hemodynamic and pressure monitoring.

Life Sciences — Biomedical Devices and Services
Investment recommendation
We expect the lively bull-bear debate to continue following EW’s Q1 results
given that the company’s performance gave both camps ample ammunition
to voice their positions. Bulls should focus on the strong OUS TAVI results,
imminent XT approval, bullish SAPIEN 3 prospects and TMVR potential.
Bears will focus on TAVI shares losses in US. In the end, we see more “risk”
to the upside – both in terms of upside potential to current estimates and
positive news catalysts (IP litigation, royalty/injunction, XT approval); thus
recommend investors take a long bias.
Q1 turned out pretty much as expected, i.e. the opportunities remain intact
and the challenges (US TAVI share shifts) remain. Overall, recent events
may tip the scales in favor the bull argument — the growing body of clinical
evidence supporting TAVI therapy (CoreValve data could lift all TAVI boats),
coupled with the imminent approval of XT in U.S. Moreover, the potential
for a material royalty from MDT in light of EW’s recent patent wins are not
factored into consensus models, in our view.
We would accumulate EW shares and recommend investors continue to
focus on accelerating EPS growth potential in 2015/2016, when we see new
products accelerating revenue growth and operating margin expansion. We
maintain our BUY rating and raise our price target to $86 from $84.
Investment highlights
 Total sales grew 5% Y/Y to $528.4M (+5%), above our $519M estimate
but below the Street’s $525M.
 WW TAVI sales of $189.2M (+11.5% Y/Y) were above our $181.1M
estimate and the Street’s $188.1M. U.S. TAVI sales of $78M (-6% Y/Y)
were below estimates, while OUS TAVI $111M (+36%) blew past



RTI Surgical Upgrade

RTI Surgical


Target: US$5.00

RTI Biologics, Inc. prepares human-donated tissue and bovine
tissue for transplantation worldwide. It performs tissue
processing services for sports medicine, dental, spine, urology,
hernia repair, breast reconstruction, and ophthalmology
applications, as well as ear, nose and throat applications. The
company distributes its allograft and xenograft implants to
hospitals and surgeons via a direct selling force and through
distribution partners.

All amounts in US$ unless otherwise noted

Life Sciences — Biomedical Devices and Services
Investment recommendation
We are upgrading shares of RTI Surgical to a BUY from Hold as we
believe Q1/14 results demonstrate a turnaround of the core business
and improving results momentum from the recent acquisition of Pioneer
Surgical. Q1/14 was a continuation of progress experienced in the Q4/13
and showed wins across the board. We once again believe RTI has
multiple levers available to drive top- and bottom-line growth, but note
that there are significant execution hurdles ahead. Specifically, we note
recapturing growth within its direct sports medicine business,
accelerating the commercial ramp for the Fortiva porcine dermis
product, and building the inventory to support the broad launch of
Investment highlights
 Revenues of $60.7M were above our estimate of $58.8M and
consensus of $59.2M. Pro forma EPS of $0.01 was above our and
street estimates for $(0.03) and $(0.01), respectively.
 New products Fortiva and MAP3 are showing positive signs of
 Sports Medicine rebounded significantly with 8.1% Y/Y and 4% Q/Q
growth and spinal implants were up sequentially after a rough start
post the acquisition of Pioneer Surgical.
We are raising our price target to $5.00 from $4.00. Our price target is
based on a 12x EV/EBITDA multiple applied to our 2015 EBITDA
estimate of $35M.

OPKO Health NR – Aquisition

OPKO Acquires Next Generation Dry Powder Inhaler to Treat Respiratory Disorders


As of 17 Apr 2014 at 11:53 AM EDT.  


Open 8.29 P/E Ratio (TTM)
Last Bid/Size 8.19 / 12 EPS (TTM) -0.33
Last Ask/Size 8.20 / 20 Next Earnings 5 May 2014
Previous Close 8.33 Beta 1.01
Volume 1,351,913 Last Dividend
Average Volume 3,501,287 Dividend Yield 0.00%
Day High 8.37 Ex-Dividend Date
Day Low 8.12 Shares Outstanding 412.9M
52 Week High 12.95 # of Floating Shares 221.0759M
52 Week Low 6.14 Short Interest as % of Float 21.06%

Inspiromatic™ Improves Drug Delivery, Monitors Patient Inhalation and Provides Real-Time Patient Feedback

MIAMI–(BUSINESS WIRE)– OPKO Health, Inc. (NYSE:OPK) has entered into a definitive agreement to acquire Inspiro Medical Ltd. (“Inspiro”), an Israeli medical device company developing a new platform to deliver small molecule drugs such as corticosteroids and beta agonists or larger molecules to treat respiratory diseases. Inspiro’s Inspiromatic™ is a “smart” easy-to-use dry powder inhaler with several advantages over existing devices.

Inspiromatic™ offers improved drug deposition to the lower airways of patients and real time data for patient compliance monitoring. The device has an internal microcontroller and flow sensor that controls the delivery of the medication and, using micro-pump technology, dispenses the drug particles at the right speed without the need for forceful inhalation. It also provides instant feedback to the patient with a green or red flasher light to indicate proper inhalation and a beeper after the dose has been delivered. For physicians, Inspiromatic™ provides a built-in logger that stores patient use data for easy access and transmission by electronic devices such as smart phones.

In a recently completed, First In Man double blinded clinical study conducted in 30 asthmatic children comparing Inspiromatic™ to a market leading dry powder inhaler, Inspiromatic™ demonstrated superior pulmonary delivery of the active drug.

“We are pleased to add this next generation inhaler to OPKO’s growing product portfolio,” stated Phillip Frost, M.D., OPKO’s CEO and Chairman. “We expect this innovative device to play a valuable role in the improvement of therapy for asthma, chronic obstructive pulmonary disease, cystic fibrosis and other respiratory diseases. We plan to use the Inspiromatic™ device to test the inhaled form of OPKO’s new sulfated disaccharide drug against these disorders. This drug product is still undergoing pre-clinical testing prior to submission of an IND, but animal data indicates safety and efficacy for both inhaled and orally delivered forms. Of course, we believe that Inspiromatic™ can improve outcomes of treatment with other drugs, those presently available in more ‘standard’ type inhalers, as well as new inhalation drugs being developed. This acquisition fits our strategy of developing new products that address large markets in need of more effective therapeutic solutions.”

Nimrod Kaufmann, CEO and Co-Founder of Inspiro, commented, “We are extremely proud of Inspiro’s success in bringing our smart Inspiromatic™ respiratory drug-delivery device to market. With Inspiro now a part of OPKO, we will be able to help more people faster. Inspiro joining OPKO is a big win for the shareholders of both Inspiro and OPKO, as well as good news for our patients and physicians.”

Eran Feldhay, M.D., CEO of Trendlines Medical, Inspiro’s largest shareholder, added, “The acquisition of Inspiro is our third exit in eight months, all to U.S.-based multinational corporations. This success brings continuing confirmation of the strength of the Trendlines team in fulfilling our vision of creating and developing companies to improve the human condition. We are very pleased to see OPKO take the Inspiro opportunity forward.”


Get every new post delivered to your Inbox.

Join 2,287 other followers