Piper Jaffray Gives Analyst Day Preview On Volcano Corp.

Piper Jaffray expects sentiment to improve incrementally following Volcano Corp.'s VOLC analyst meeting presentations on March 9th. With VOLC stock trading at the lower end of its recent range, Piper believes discussion on core growth, new product timelines, and the status of OCT litigation will dissipate some of the cloud cover over the stock. VOLC remains a high growth, well managed business with some headline risk on the legal front and standard FDA slowdown postponements affecting timelines.

Piper expects management to walk them through underpenetrated markets and build its case for continued or accelerated growth in 2012. With hospitals facing multiple cost challenges, Piper will be looking to see what clinical studies will enhance its value proposition to hospitals going forward. Clearly FFR has strong clinical data for both better patient results and lower cost. Clinical data for IVUS is compelling on safety and efficacy improvements, but more definitive arguments on overall cost effectiveness for payors and providers are still desired.

Risks to the target price include strong competition, FDA regulation, reimbursement pressures, and the outcome of key clinical trials to validate its differentiating technologies.

Piper Jaffray has an Overweight rating on VOLC

VOLC closed Friday at $26.85