NMT: Patching Up Holes in the Heart

While other stocks were falling in 2001, shares of NMT Medical (NMTI ) were on a roll. They picked up from 2 in mid-January, 2001, to 9.31 in late December, before easing to 8 this year. Its chief product, CardioSEAL, a minimally invasive treatment for holes in the heart, got Food & Drug Administration approval in December. It was approved in Europe in 1997. Such defects can cause blood to seep between the right and left sides of the heart--and could lead to blood clots and strokes, notes Kevin Kotler, senior medical analyst at investment outfit ABN Amro. CardioSEAL is threaded into the heart by a catheter to patch the hole.

Richard Weinstein of vFinance Investments, which manages more than $1 billion, has been accumulating NMT shares. He cites not only NMT's important products but also the prospect of a large medical-device maker buying the company sooner rather than later--because of the potential of CardioSEAL and other NMT technologies. "The recent acquisition by Medtronic of VidaMed, another small device maker, at 32 times revenues, puts a value of 20 a share on NMT," argues Weinstein. His estimate is based on 10 times estimated 2001 revenues of $22 million for CardioSEAL alone, excluding NMT's cash hoard of $30 million, or $3 a share, and other assets. Weinstein estimates CardioSEAL sales in the U.S. and Europe will far exceed last year's. NMT didn't return calls.

By Gene G. Marcial

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