Volcano's IVUS More Efficient - Analyst Blog

Recently, results from Volcano Corporation's (VOLC) PROSPECT (Providing Regional Observations to Study Predictors of Events in the Coronary Tree) study were published in The New England Journal of Medicine.

The study revealed that the company's grayscale intravascular ultrasound (IVUS) and virtual histology (VH) IVUS tissue characterization software helps physicians to better assess the severity of individual blockages compared with the currently used angiographic imaging.  

The PROSPECT study, funded by Abbott (ABT) and Volcano, was carried out on 700 patients in both US and Europe who have been suffering from acute coronary syndrome (ACS) for 3 years. While some lesions had an almost 20% risk of a cardiac event within three years, other low-risk lesions had a much lower probability of 0.6%.

It is encouraging to note that grayscale IVUS along with VH IVUS could detect the lesion characteristics that would lead to heart complications in future.

Volcano derives the majority of its revenues from the sale of IVUS and functional measurement (FM) products. These products aim at enhancing the diagnosis and treatment of vascular heart disease by improving the efficiency of existing percutaneous interventional (PCI) therapy procedures in the coronary or peripheral arteries.

Volcano continues to believe that IVUS and FM markets remain under -penetrated. By the middle of the decade, the penetration rate of integrated consoles in cath labs is expected to reach 80% or more from the current level of 30%.

Banking on its ability to reduce costs and continuously upgrade technology the company is confident of reaping maximum advantage from the huge potential market. Volcano expects its core IVUS and FM businesses to grow by over 20% annually coupled with additional revenues from its product pipeline.

In addition, the use of intravascular imaging (IVUS and/or OCT) in physiology measurement is expected to increase, which will support the anticipated 20% growth of the company.

We are currently ‘Neutral' on the stock, which is also supported by the Zacks #3 Rank (hold).

 
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