) has expanded its portfolio with the clearance to market of its
Visions PV .035 digital IVUS (intravascular ultrasound imaging)
catheter in both the US and Europe. This is significant as the use
of this device will better place physicians to study vessel
morphology and accordingly take proper treatment decisions which,
in turn, would benefit patients.
The Visions PV .035 digital IVUS catheter is capable of imaging
large vessels. Management is confident that the IVUS technology
would help in guiding endovascular and other peripheral
Volcano Corporation derives a major part of its revenues from
its IVUS product portfolio. During the last reported quarter, the
company witnessed mid single-digit growth in IVUS disposable
revenues in the US and Japan, as well as in Northern Europe though
trends in Southern Europe, particularly Spain, were disappointing.
We appreciate the company's strategy of driving growth based on
market penetration, share gain and pricing benefits with the
introduction of more advanced IVUS catheters and related
technology. With softness in PCI procedures in the US and price
cuts in Japan, the company is looking at mid-single digit growth in
IVUS disposables going ahead.
However, as these challenges subside, we expect IVUS growth to
improve. IVUS technology is widely used to determine the placement
of stents in patients with coronary disease. Moreover, the low IVUS
penetration rate in the US and Europe provides better scope to
increase its market share.
Volcano Corporation has been working on expanding its portfolio
with the recent launch of many products. This is expected to boost
its revenues in the long term. During the first quarter of 2012,
the company initiated a limited market release of its Valet Micro
catheter in the US that received 510(k) clearance in early January.
This was followed by CE Mark approval for the device, and a limited
market release was initiated in Europe in the second quarter. The
company is looking at an early 2013 approval of Valet in Japan.
While revenue contribution from the device will be nominal in the
current fiscal, it will improve gradually.
In addition, Volcano Corporation has high expectations from the
next-generation IVUS technology called FACT (Focused Acoustic
Computed Tomography), the commercial launch of which is slated for
mid-2013 in the US and Europe, and a year later in Japan. The
company is also progressing with respect to its Forward-Looking
IVUS and Forward-Looking Intra-Cardiac Echo programs. However, in
the IVUS range of products, the company faces tough competition
Boston Scientific Corporation
We have a Neutral recommendation on Volcano Corporation. The
stock retains a Zacks #3 Rank (Hold) in the short term.
BOSTON SCIENTIF (BSX): Free Stock Analysis
VOLCANO CORP (VOLC): Free Stock Analysis Report
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