An Alternative To Hysterectomies?

There's an underserved market in health care: Women with severe gynecological problems. Investment pro Sam Navarro of UBS Securities says that Gynecare (GYNE) is one of the few new companies attempting to serve that market. Specifically, the company is using innovative technology to treat uterine disorders. Its first product is a device that helps stop excessive menstrual bleeding, a problem that affects at least 18 million women worldwide, Navarro notes.

The Gynecare device, which goes under the name Uterine Balloon Therapy, is designed as a one-time outpatient treatment. High temperature enables the removal of the endometrial lining of the uterus, the primary source of menstrual bleeding, through a patented method called thermal ablation.

A balloon catheter is inserted into the uterus. It is then inflated with a small amount of sterile fluid to conform to the shape of the uterus. A heating element inside the balloon raises the temperature to about 87 degrees Celsius, which is maintained for eight minutes. The balloon then deflates and the catheter is removed as the endometrial lining is taken out.

Navarro notes that about 300,000 hysterectomies are performed worldwide each year because of heavy bleeding. Gynecare has started clinical tests of the therapy, which serves as an alternative to hysterectomies, at 13 academic and medical centers in the U.S.

Navarro thinks the stock, trading at around 9, remains undervalued and is worth twice that, considering the potential sales of the device. He sees Gynecare making money in two years.

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