Benefiting from federal approval of its laser technology for treating atherosclerosis, Trimedyne Inc. showed a first-quarter profit of more than $1 million. That marked a 357% improvement over the $224,000 profit posted by the Santa Ana company in the first fiscal quarter of 1987.
Sales for the first fiscal quarter ended Dec. 31, 1987, were $5.35 million, up 163% over $2 million for the same period a year earlier.
Trimedyne officials and securities analysts attribute the company's record revenues and earnings to expansion of sales since the Food and Drug Administration in March approved the laser technology for use in the United States. Previously, sales had been confined to an overseas market.
It is the fifth consecutive quarter that the 7-year-old company has landed in the black.
"The whole objective was to develop the use of laser energy for the treatment of cardiovascular disease, and it took 6 1/2 years as an R & D company to get to that point," said Michael Henson, Trimedyne's president and chief executive officer. In those struggling years, he said, the company accumulated about $7.5 million in losses.
"It shows what happens when you get FDA approval," said Jim Horan, a securities analyst with Shearson Lehman Brothers who follows emerging companies with a technological edge.
Horan said to date Trimedyne faces no competitors for its laser technology, which is used to help unclog blood vessels.
A laser catheter is inserted in the blood vessel and used to vaporize enough fatty deposits to make room for a balloon angioplasty catheter. When the angioplasty catheter is inflated, it compresses the remainder of the plaque and widens the vessel enough to improve blood flow.
The small incision necessary for the combined laser and angioplasty treatment is much less traumatic and costly than the alternative of bypass surgery.
Trimedyne's laser technology has been approved by the FDA to open clogged arteries in arms and legs and is undergoing clinical testing for use in the heart.
Frank Ingersoll, a securities analyst with Knibbe Financial in San Antonio, said he anticipates that Trimedyne will earn $5 million in its current fiscal year, contrasted with $321,000 last year. He based his projection on the company's marketing efforts and the fact doctors are becoming more familiar with the new technology.
Trimedyne said that in the last nine months physicians have used the laser systems for 7,000 to 10,000 procedures.
The more the laser systems are used, the more money Trimedyne makes. Hospitals can buy the Optilase, the instrument that generates laser energy, for $92,000. But to use the machine they must also buy catheters patented and sold by Trimedyne that are thrown away and replaced after every treatment.
Trimedyne's Henson said the company plans next fall to begin overseas marketing of a laser product to unclog blood vessels in the heart. By July or August of 1989, he added, he expects Trimedyne to receive a go-ahead from the FDA to start selling the new product in the United States.