Fw: FYI, read the last few paragraphs
01/09 15:07 MiniMed shares rise despite Q4, Q1 earnings warning
LOS ANGELES, Jan 9 (Reuters) - Shares of MiniMed Inc.
<MNMD.O>, the leading
maker of insulin pumps used by diabetics, were up about 6
percent on Tuesday as
investors saw a buying opportunity after the company
warned late Monday that
earnings would fall short of estimates.
The company’s shares were $2-1/8 higher at $35-1/8 in
afternoon Nasdaq trading.
"Even after lowering the earnings outlook, we see
MiniMed’s earnings per share up
40 percent this year at $1.04. That works out to a
12-month price target of $42," said
Kevin Kotler, an analyst at ING Barings.
Banc of America on Tuesday cut its price target for the
stock to $50 from $60, while
Prudential Securities lowered its target to $60 from $89,
with both brokerage firms
citing the downward earnings revision.
The stock traded as high as $92-9/16 in late September.
MiniMed said it expected to report fourth-quarter
earnings of about 17 cents a share,
below analysts’ consensus estimates of 19 cents. The
company attributed the
shortfall to slower sales in December and said annual
comparisons were affected
by soaring sales in the year-earlier quarter due to the
introduction of a new pump
model.
The company also said profits for first quarter 2001
would be "moderately improved"
over the year-earlier quarter’s 10 cents a share, due to
a previously anticipated
slower sales growth rate, pricing pressures and higher
research and development
costs. Analysts on average, according to First
Call/Thomson Financial, had been
forecasting 15 cents a share.
ROOM FOR GROWTH SEEN
MiniMed’s external insulin pumps allow diabetes patients
to infuse insulin into their
bloodstreams, replacing the traditional injection by
needle. About 10 percent of
Americans with type 2, or adult onset, diabetes, which is
the most common form of
the disease, use the pumps.
"There is plenty of room for further growth," Alfred
Mann, MiniMed’s chief executive
officer, said during a conference call on Tuesday, but he
added that sales are likely
to slow this year to a rate of around 35 percent compared
with more than 40 percent
in 2000.
"MiniMed is extremely well positioned to continue to
dominate the pump market,"
Kotler said.
Terrence Gregg, the company’s chief operating officer,
said MiniMed will launch a
another new pump this year as well as a new insulin
infusion set. It also planned to
launch a consumer version of its continuous glucose
monitoring system, but was
notified by the U.S. Food and Drug Administration that
the application must now be
reviewed by an advisory panel.
"The date of the panel review is unknown, but we do know
that the next available
meeting is scheduled for March," Gregg said.
He noted that FDA approval of a physician-supervised
version of the MiniMed
monitor came six months after the advisory panel review
of that product.
A potential competing glucose monitor made by Cygnus Inc.
<CYGN.O> was given
"approvable" status by an FDA advisory panel more than a
year ago, but it has not yet
been cleared for marketing.
"We expect sales of the sensor/implantable pump
combination — an external
artificial pancreas — to accelerate our business," Gregg
said.