Making Angeion's Heart Sing

Angeion (ANGN), which is developing implantable cardioverter defibrillators for the treatment of arrhythmia, or irregular heartbeat, has yet to recover from a heart-stopping blow: In October, St. Jude Medical, the No.1 maker of mechanical heart valves, announced it was acquiring Ventritex, another maker of defibrillators, thus undoing its deal to distribute Angeion's defibrillators, still awaiting Food & Drug Administration approval. Angeion threatened court action, prompting St. Jude to seek a friendly resolution. But Angeion's shares plunged from 61/2 on Oct. 21 to 41/2 on Oct. 24.

Even so, James Awad, who runs New York investment firm Awad Associates, has upped his buying--doubling his stake to more than 2 million shares. He thinks St. Jude, whose purchase of Ventritex was blocked by the Federal Trade Commission until it settled with Angeion, will finally resolve the dispute.

Awad expects the settlement will include handing over to Angeion a "significant amount of money" and a possible cross-licensing pact on the two companies' devices. Awad says a deal should boost the stock--by clearing the way for Angeion to seek another partner.

Awad also says Angeion will be able to respond to overtures from other quarters. In a buyout, he figures Angeion is worth 8 to 10 a share. Chairman Whitney McFarlin, who expects a settlement in a few weeks, says: "We're in active discussions with potential strategic partners."

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