Given Imaging Study May Help Approval: Israel Overnight

Results from Given Imaging Ltd.’s latest clinical study of a pill-sized camera used to identify colon cancer probably will help the Israeli manufacturer secure U.S. regulatory approval this year, Chief Executive Officer Homi Shamir said.

“The PillCam Colon’s potential is enormous,” Shamir said in a phone interview yesterday from Orlando, Florida. “The data we presented will help us get regulatory approval by the end of” the third quarter, the beginning of the fourth quarter.

Physicians can detect pre-cancerous tumors with PillCam Colon, a capsule-sized camera that’s comparable to a colonoscopy, according to trial results that Given Imaging reported yesterday. New York-traded shares of the Yokneam, Israel-based company fell 1.9 percent, erasing their premium to Tel Aviv, after the stock in Israel surged 5.3 percent as the company reported data on products. The Bloomberg Israel-US Equity Index of the largest Israeli companies traded in the U.S. dropped for the first time in six days.

Given Imaging, which sells its video capsules to peek into the small bowel and esophagus, is seeking approval from the U.S. Food and Drug Administration and Japan’s Pharmaceuticals and Medical Devices Agency for its PillCam Colon for patients who can’t undergo or complete an examination of the large intestine and rectum. About 143,000 cases of colon and rectal cancer are expected to be diagnosed this year in the U.S., according to the National Cancer Institute.

Pricing Estimate

CEO Shamir said pricing of the PillCam Colon will be similar to the PillCam SB, its device for the small bowel which was introduced in 2001 and costs about $500 per capsule. Colonoscopies can cost $800 to $1,200, James Goodwin, a professor at University of Texas Medical Branch in Galveston, told Bloomberg News in March. Inappropriate use of the procedure may cost about $500 million a year for Medicare, the U.S. health program for the elderly and disabled, he said.

The data is “good enough to get FDA approval,” Jeremy Feffer, an analyst at Cantor Fitzgerald LP, said by phone yesterday. Feffer has a buy rating for Given Imaging stock. “It’s cheaper to cover, it’s going to help an increased screen compliance and it’s keeping with the move toward minimally invasive technology.”

Given Imaging also said yesterday new studies confirm the value of PillCam SB in diagnosing, monitoring and managing Crohn’s disease and other conditions of the small bowel.

The company’s total sales will rise 6.9 percent to a record $193 million in 2013, according to the average of two analysts’ estimates compiled by Bloomberg. Revenue will jump 13 percent and 25 percent, respectively, in 2014 and 2015, the data show. Yet analysts covering the stock are the most pessimistic in 13 months. Given Imaging is rated 3.8 by analysts, according to a scale devised by Bloomberg where 1 indicates a sell and 5 denotes buy.

‘Always longer’

While PillCam Colon will probably be approved in the U.S., sales won’t come through until doctors start using it, said Stephen Brozak, an analyst at WBB Securities LLC.

“Adoption is always longer than people would like,” Brozak, who has a hold rating on Given Imaging, said in a phone interview yesterday from Clark, New Jersey.

Given Imaging slipped to $16.08, retreating from a two-month high. The stock declined 3.4 percent to 58.49 shekels, or $15.88 in Tel Aviv today.

The Bloomberg Israel-US Equity Index retreated 0.2 percent to 94.43. Israel’s benchmark TA-25 Index advanced less than 0.1 percent to 1,232.71. Gilat Satellite Networks Ltd., based in Petach Tikva, Israel, rallied 1.8 percent to $5.65, an almost one-month high. Tel Aviv shares today slipped 0.2 percent to 20.61 shekels, or $5.60.

Allot Communications Ltd., based in Hod Hasharon, Israel, led the declines on the index, slipping 2.9 percent to $13.19. The maker of technology used by telecommunications providers to track wireless traffic dropped 3.9 percent today in Tel Aviv to 48.17 shekels, or $13.08.

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