re: the most overvalued stock on asx. No you tried to make a small extract appear as though Thoratec has a problem. The heartmate2 is small, non pulsatile but has advanced features and only one moving part. Thoratec has the whole market. The new products that might arrive would in the area of the lvad bomb VCR if it trembled THOR.
READ the whole article from Dowjones:
This is what happened recently to the market leader. Read the problems that a giant faces. It all applies to this backblocks would-be VCR:
Thoratec Trades Down on Slow Adoption of Heart Pumps
June 30, 2004 12:11 PM
By Roger Cheng
Dow Jones Newswires
NEW YORK -- Thoratec Corp.'s (THOR) shares plunged Wednesday, after the cardiovascular products maker slashed its second-quarter outlook as some on Wall Street see a slow adoption of its implantable heart pumps.
Late Tuesday, the Pleasanton, Calif., company said it expects a second-quarter net loss of a penny a share, or earnings of two cents a share excluding items, on revenue of $40 million to $41 million. Wall Street had projected earnings of seven cents a share before items on revenue of $44 million.
Thoratec cited delays in its Destination Therapy initiatives, and added it expects the reimbursement environment to improve in the fourth quarter. Destination Therapy involves the use of the company's implantable heart pump, the HeartMate Left Ventricular Assist System, as a long-term implant.
But Lazard analyst Alexander K. Arrow said he saw a "pattern of exceptionally slow product adoption."
While cardiologists are willing to recommend a temporary heart pump for patients waiting for a heart transplant, few are willing to recommend it as a long-term solution, Mr. Arrow said in a research note. Additionally, many of the patients that are recommended for Destination Therapy are turned down.
"This combination points to a painfully slow product ramp," Mr. Arrow said. "We see little reason to be excited about the growth prospects of any of Thoratec's product lines."
Mr. Arrow downgraded the stock to "sell" from "hold."
A spokesman for Thoratec wasn't immediately available for comment.
About 11:45 a.m. EDT Wednesday on the Nasdaq Stock Market, Thoratec shares traded at $11.14, down $3.28, or 23%, on volume of 6.3 million shares. Average daily volume is 671,740 shares.
Mr. Arrow said there was a "psychological barrier" preventing cardiologists from referring patients to a long-term implantable heart pump.
The combination of hesitancy in cardiologists and surgeons turning down patients who don't meet the requirements will remain the prime downward force on the low volume of procedures, the analyst said. He cut his 2004 estimate of the number of Destination Therapy procedures to 175 from 339.
The lack of visibility into Thoratec's Destination Therapy launch is the reason why Adams Harkness & Hill analyst Jayson T. Bedford downgraded the stock to "market perform" from "buy."
Destination Therapy represents a $3 billion market, so Thoratec's opportunity remains large. The company's product adoption, however, is slower than anticipated, Mr. Bedford said. The company will likely have to spend more to generate awareness for the product, and the analyst sees higher execution risk.
Given Thoratec's revised outlook, the company's stock is overvalued, he said. Mr. Bedford doesn't own a stake in Thoratec, but Adams Harkness & Hill has an investment-banking relationship.
The company has a pattern of consistently lowering expectations.
"It is only natural now for us and others to anticipate further downward revisions in guidance as time goes on and, therefore, to apply a lower valuation multiple to Thoratec shares today," he said.
Thoratec also faces competition from "up-and-coming" competitor MicroMed Technology Inc., according to Mr. Arrow, the Lazard analyst. The company's MicroMed DeBakey pump, which is nearly identical to Thoratec's next-generation HeartMate II pump, is lighter and boasts a better mechanical track record. It is also closer to approval by the Food and Drug Administration.
Mr. Arrow doesn't own a stake in Thoratec, but Lazard offers investment-banking advice and other services to the company.
-By Roger Cheng, Dow Jones Newswires; 201-938-5393;
(END) Dow Jones Newswires
06-30-04 1211ET
VCR
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