Set to Thrive at TheraSense

Investors are treating TheraSense (THER ) as if it were a biotech with no product in sight. In fact, the company makes a glucose-monitoring system for diabetics, an almost painless one that draws little blood--from fingertip, thigh, upper arm, or back of the hand. It has strong appeal among diabetes patients, says Arch Smith, a senior analyst at U.S. Bancorp Piper Jaffray, the lead underwriter in the company's IPO last year. He foresees strong sales and earnings growth. TheraSense, says Smith, has the "profile of a classic growth stock, yet isn't valued as such." Its Free-Style monitoring system is sold in the U.S., Europe, and Japan. TheraSense, says Smith, is the "cheapest growth stock in our small-cap diversified universe." It rose from 14 on Apr. 2 to 21.13 on Apr. 17, but it's still below a high of 26 in December. Smith says it's worth 30. He sees TheraSense earning 5 cents a share in 2002 on projected sales of $201.5 million, leaping to 82 cents in 2003 on estimated sales of $329 million, vs. a loss in 2001 on sales of $71 million.

By Gene G. Marcial

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