Volcano to Buy MDT Re-entry Catheter - Analyst Blog


In an attempt to expand its line of devices for the treatment of peripheral arterial disease ("PAD"), precision-guided therapy tools provider Volcano Corporation ( VOLC ) formed an alliance with medical device major Medtronic Inc. ( MDT ). Per the deal, Volcano will purchase Medtronic's Pioneer Plus diagnostic ultrasound transducer and percutaneous catheter. Although financial terms of the deal were not disclosed, the companies expect the transaction to complete by the end of August.

The Pioneer Plus re-entry catheter of Medtronic is an interventional device designed to treat crossing of sub-total, total and chronic total occlusions (CTOs) within the peripheral vasculature, doing away with the need for surgery. This acquisition is in the best interests of Volcano as its IVUS (Intravascular Ultrasound) technology that provides cross-sectional ultrasound image before additional interventions, such as balloon angioplasty or stent placement, directly compliments Pioneer Plus. Thus Volcano is optimistic about the inclusion of these catheters in the broad range of the company's peripheral portfolio.

Moreover, Pioneer Plus has regulatory approval in the U.S., Europe and other geographic regions. The huge customer base it enjoys should thus also prove helpful to strengthen Volcano's foothold across all these geographies.

With an aim to drive growth through acquisitions, Volcano, in Dec 2012, purchased California based Crux Biomedical that develops advanced therapies for the human vasculature. This acquisition added the Crux Vena Cava Filter (VCF) System to the product line. It is a highly differentiated inferior vena cava (IVC) filter used to treat life threatening pulmonary embolisms (PE). Currently, the company is preparing for a full market launch for the Crux device in the first half of 2014, while expecting to combine their IVUS technology with the Crux VCF System.

Volcano continues to believe that the IVUS market remains under-penetrated. In the next few years, the penetration rate of integrated consoles in cath labs is expected to reach 80% or more, from the current level of just over 30%. Banking on its ability to expand its product offering and continuously upgrade technology, the company is confident of reaping maximum advantages from this lucrative market.

Volcano currently carries a Zacks Rank #3 (Hold). Other medical devices companies that are expected to outperform in the near term are Alere ( ALR ), with a Zacks Rank #1 (Strong Buy), and Align Technologies ( ALGN )  carrying a Zacks Rank #2 (Buy).

ALIGN TECH INC (ALGN): Free Stock Analysis Report

ALERE INC (ALR): Free Stock Analysis Report

MEDTRONIC (MDT): Free Stock Analysis Report

VOLCANO CORP (VOLC): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: ALGN , ALR , IVC , MDT , VCF



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