5 of the Best Performing Medical Device Companies of Early 2014

Posted in Medical Device Business by Chris Newmarker on March 11, 2014

Some of the medical device companies with the most stock price growth in early 2014 also happen to be the ones who are digging themselves out of a hole from the year before.

Time will tell whether companies such as Intuitive Surgical, Boston Scientific, or Edwards Lifesciences are comeback kids—or just starting out the year with some luck.

Here are five of the best performing medical device companies so far in 2014, along with the year-to-date percent change in their stock price as of March 14:

Coloplast A/S: +20%

Humlebaek, Denmark–based Coloplast actually stands out more in the list because it is a company that has been seeing steady stock growth in recent years. Up by nearly a fourth this year, its stock is trading around 430 to 440 Danish krone (about $80 to $82) per share.

The company—which is a leading supplier of ostomy, continence and wound care products in Europe—expects another year of double-digit growth in the United States, where it is still a minor player, according to a Reuters report.

Recently, Coloplast agreed to pay about $16 million to settle about 400 cases involving its transvaginal mesh implants, according to a report on Bloomberg. Perhaps the company didn’t want any legal issues hindering its U.S. expansion.

Allergan Inc.: +15.54%

Allergan’s medical device business—which includes silicone breast implants and tissue expanders, as well as facial fillers—only made up $858.5 million out of $6.3 billion in sales last year.

Still medical device sales have been growing along with the rest of the company’s mostly pharmaceutical business.

“Allergan once again saw sequential quarterly improvement in both its pharmaceutical and medical device margins. This continuing positive gross margin trend has been primarily -- has been driven primarily by improved year-over-year standard costs, favorable pricing, favorable region and product line mix, lower royalty expense and lower year-over-year inventory provisions,” Allergan’s chief financial officer Jeffrey Edwards said last month during a quarterly earnings call with analysts, transcribed by Seeking Alpha.

Intuitive Surgical Inc.: +10.15%

Better-than-expected quarterly results are helping to buoy Intuitive Surgical’s stock prices, even as its top executives continue damage control in the discourse regarding the safety of Da Vinci robotic surgery.

Gary Guthart, Intuitive’s president and CEO, claims progress in the hearts and minds of hospitals, saying that despite reported adverse events and ongoing FDA issues, surgery with the Da Vinci system is still far safer than conventional open surgery. Intuitive Surgical

While sales of new Da Vinci systems fell, more procedures were performed using existing systems. Intuitive said although total revenue fell 5% in the fourth quarter to about $576 million from $609 million a year ago, that was still higher than the $548.6 million expected by analysts.

The company’s stock in early March has been trading between $420 and $440 per share, up from 384.08 at the end of 2013. But it was trading at more than $500 per share a year ago, which means there’s plenty of room for improvement.

Edwards Lifesciences: +9.7%

Edwards, a global leader in heart valves and hemodynamic monitoring, is up nearly 10% year to date, but that is from a low bottom. The company, which was trading at over $100 in late 2012, hit a three-year low in December when shares dipped below $61.

This was after a late-October nosedive of nearly 20% on disappointing results.

Still, some analysts think the worst may have passed for Edwards. A big question is what will happen when Medtronic releases its CoreValve transcatheter aortic valve replacement in the U.S., directly challenging Edwards’ Sapien valves.

Find out more about the medical device industry—including its technology, supplier networks, and much more—at BIOMEDevice, March 26-27, 2014 in Boston.

Boston Scientific Corp.: +8.24%

Things are finally looking up for Boston Scientific. After going through multiple reorganizations and layoffs, and pursuing diversification through acquisition, the Natick, MA–based device giant has returned to profitability. Their product pipeline is beginning to pay off as approvals are rolling in, supply chains are up to speed and demand appears to be rising.

On February 5, Boston Scientific announced the U.S. launch of its OffRoad Re-Entry Catheter System, an important addition to the company's arsenal of tools to treat chronic total occlusions (CTOs). Boston Scientific CEO Michael Mahoney has repeated that the medical device giant remains enthusiastic about renal denervation as a treatment for high blood pressure—even after Medtronic and Covidien have decided to pull back from the space.

Plus, Boston Scientific is looking to boost its bottom line in China.

The company’s stock still isn’t trading around $40 per share as it was about 10 years ago. But at about $13 per share, it is up more than 8% for the year, and is out of its Great Recession hole.

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Chris Newmarker is senior editor of MPMN and Qmed. Follow him on Twitter at @newmarker.