When Cardiovascular Imaging Systems went public in mid-May, it had to do a double- cut: It slashed the planned offering price from a wide 13-to-15 range all the way down to 7 a share. And it reduced the offered shares from 2 million to 1.5 million. "That was the only way to get the deal done," says one fund manager, "because the biotechs were under tremendous pressure." Yet the stock rose to 9 a few weeks after the offering and is now trading at 8 1/2.

How come? The outlook for this company's proprietary technology and products is bright, and the stock is cheap at this price, says the editor of the California Technology Stock Letter, Mike Murphy, who is usually skeptical about biotech upstarts. Imaging makes an intravascular ultrasound imaging catheter that can be inserted into the artery to get a clear picture of the composition and distribution of atherosclerotic (fatty) plaque.

One company very interested in Imaging is SciMed Life Systems, which has taken a 6% stake. SciMed has agreed to jointly develop and market some of Imaging's products for coronary and peripheral vascular applications. The Food & Drug Administration has approved the marketing of four of Imaging's catheters and its Insight System, a computerized processing system that provides a video image of an artery. On June 23, the FDA allowed the use of the catheters in the heart to evaluate heart motion, valve performance, and artery diseases.

Murphy expects sales, which doubled to $6.8 million last year, to keep up that pace over the next few years. He figures the company will still be in the red this year but may break even by 1993. He sees earnings of 50 a share in 1994 and $1 in 1995.

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