Neutral on American Medical - Analyst Blog
10 Maggio 2011 - 6:19PM
Zacks
We maintain our Neutral recommendation on leading pelvic-health
devices maker American Medical Systems (AMMD). Its
first-quarter fiscal 2011 earnings of 33 cents per share beat the
Zacks Consensus Estimate of 30 cents.
Both revenues and profit rose roughly 4% year over year on the
back of higher sales from the Minnesota-based company’s men’s
health and women’s health businesses, assisted by a healthy
contribution from its international operation. Sales (of $140.8
million) for the quarter also beat the Zacks Consensus
Estimate.
American Medical’s men’s health division remained on the growth
track supported by the strength at its male continence business.
Its benign prostatic hyperplasia (“BPH”) therapy business posted
healthy growth in the quarter, led by the GreenLight XPS laser
therapy and the next-generation BPH therapy system MoXy Liquid
Cooled Fiber.
The pelvic floor repair products (such as Elevate anterior and
Elevate posterior) remain the key growth engine for the company’s
women’s health division.
American Medical is a world leader in manufacturing medical
devices and procedures for treating health problems of both men and
women. The company competes with larger players like Boston
Scientific (BSX), Johnson & Johnson
(JNJ) and C.R. Bard (BCR).
American Medical has a strong pipeline and remains focused on
rolling out new products to drive growth. The company expanded its
BPH therapy range with the launch of GreenLight XPS in May 2010 and
MoXy Liquid Cooled Fiber, in September 2010. American Medical’s
GreenLight HPS laser system was recently cleared in Japan,
representing another important milestone.
American Medical has a dominant position in both male and female
incontinence markets. However, the company is exposed to a
significant reimbursement risk and its European markets are yet to
fully recover from the macroeconomic softness.
American Medical is slated to be acquired by specialty
healthcare solutions company Endo Pharmaceuticals
(ENDP) in the third quarter of 2011. Under the deal, announced in
April 2011, Endo Pharmaceuticals will buy the company for $2.9
billion or $30.00 per share in cash. The consideration includes the
assumption of $312 million of debt.
The transaction has been approved by the Boards of both
companies and is subject to the approval of American Medical’s
shareholders, antitrust clearance and attainment of other closing
conditions. The company will announce a special shareholder meeting
in due course to secure stockholder clearance of the proposed
deal.
AMER MED SYS (AMMD): Free Stock Analysis Report
BARD C R INC (BCR): Free Stock Analysis Report
BOSTON SCIENTIF (BSX): Free Stock Analysis Report
ENDO PHARMACEUT (ENDP): Free Stock Analysis Report
JOHNSON & JOHNS (JNJ): Free Stock Analysis Report
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