Cardiovascular Systems Soars on Approval of Artery DeviceMichelle Fay Cortez
Cardiovascular Systems Inc. soared the most in four years after U.S. regulators approved its Diamondback 360 device used to clear calcium from clogged arteries without review by an expert advisory panel.
The U.S. Food and Drug Administration cleared the Diamondback, the first coronary system for calcium removal known as atherectomy in more than 20 years, for those with severely calcified arteries. About 40 percent of patients getting artery-clearing procedures have significant calcium buildup, creating a $1.5 billion annual market, CSI said in a statement.
The early approval strengthens St. Paul, Minnesota-based CSI’s potential as a takeover target, said Danielle Antalffy, an analyst at Leerink Swann & Co. in New York, in a note to clients today. While similar systems are approved for use in the peripheral arteries, the Diamondback will compete only against Boston Scientific Corp.’s Rotoblater in the heart, she said.
The approval “makes CSII a much more attractive acquisition target given its best-in-class atherectomy device, strong growth profile, and highly underpenetrated market opportunity,” Antalffy said. “We believe the coronary indication could expand CSII’s addressable market opportunity by another $1.2 billion plus, versus the current $1.5 billion atherectomy in peripheral arterial disease market,” she said.
Cardiovascular Systems rose 18 percent to $26.75 at the close in New York, its biggest one-day increase since November 2009. The shares have more than doubled far this year.