Recently, Volcano Corporation (VOLC) jointly with Imperial College London declared the results of ADenosine Vasodilator Independent Stenosis Evaluation (ADVICE) study at the Transcatheter Therapeutics Conference in San Francisco. The study evaluated the ability of instant wave-Free Ratio (iFR), an investigational product similar to fractional flow reserve (FFR).
FFR is considered as the widely accepted tool to assess ischemia without the help of pharmacologic vasodilation, thus facilitating enhanced direct treatment decisions. The American College of Cardiology has also accepted the result for publication.
Volcano Corporation specializes in the development, manufacture and commercialization of a wide range of intravascular ultrasound (IVUS) and functional measurement (FM) products that seek to enhance the diagnosis and treatment of vascular heart disease by improving the efficiency of existing percutaneous interventional (PCI) therapy procedures in the coronary or peripheral arteries.
The IVUS family of consoles has been specifically designed to serve as a multi-modality platform for Volcano’s FFR, phased array and rotational IVUS catheters, pressure wires, and Medtronic’s (MDT) Pioneer reentry device.
Volcano has also witnessed some favorable trends in the industry in the form of greater clinical and economic pressure to prove the benefits of PCI therapy procedures. The company is confident that favorable industry dynamics will provide strong momentum to its core offerings, particularly FFR, and will mitigate any short-term variances in PCI activity.
However, tight hospital budgets could restrict growth in the near term. Besides, operating margin remained under pressure due to higher SG&A expenses, possibly relating to its expansion in Japan. Moreover, the company witnesses stiff competition from players such as St Jude Medical (STJ) and Boston Scientific Corporation (BSX). We are Neutral on Volcano Corporation over a longer term, which also supports short-term Zacks Rank#3 (Hold), in line with our take on its peers.
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