Trimedyne’s Market Now Spans Ocean

Times Staff Writer

Trimedyne Inc., a Santa Ana manufacturer of medical lasers, said Tuesday that it has signed a marketing agreement with a West German company that could reap up to $100 million in sales over the next five years.

Messerschmitt-Bolkow-Blohm GMBH will manufacturer lasers for Trimedyne under the agreement and sell Trimedyne’s laser catheters in most of Europe and the Middle East.

Stock analysts applauded the deal and said it should boost Trimedyne’s earnings.

The company said that its U.S. factory is backlogged and that the agreement will provide it with a new supply of lasers.


Would Expand Market

The agreement also greatly expands Trimedyne’s worldwide market for laser catheters, now used to remove fatty deposits from arteries in the leg without surgery.

Trimedyne has applied for U.S. approval to use the lasers on heart patients in place of open-heart bypass surgery, a far larger market.

And stock analysts said the company is well ahead of a host of competitors in the race to be first to win approval from the Food and Drug Administration.


Eventually, Messerschmitt and another U.S. manufacturer will make most of Trimedyne’s lasers, the company said. Trimedyne officials denied that dependence on outside suppliers would put the company at risk.

“We’re protected against that because we picked two financially sound suppliers,” said Richard A. Demmer, executive vice president.

Made Fighter Plane

Messerschmitt is the descendant of the German company that made the famous World War II fighter plane. It now manufactures a variety of high-technology products.


Under the recent agreement, Messerschmitt will sell laser catheter systems for leg surgery in most of Europe and the Middle East and will sell systems for all types of surgery in Eastern Europe. The systems will couple a Messerschmitt laser to a Trimedyne catheter because the German company’s laser already is approved for medical use in most European countries, while Trimedyne’s is not, Demmer said.

Trimedyne’s laser catheter products in many cases can replace more complicated surgery to remove fat blocking the flow of blood in arteries. The company now is the only manufacturer with FDA approval for a catheter to treat arteries in the leg, and Trimedyne says it expects FDA approval for its heart catheter no later than 1990.

Stock analysts like the company because--unlike some new medical companies--it began making money relatively quickly. Analysts also see a large market for the product because while the lasers can be used repeatedly, the catheters can be used only once and then must be replaced.

“That means a very nice income stream,” said Jeff Kilpatrick, president of Newport Securities Corp. in Costa Mesa.


In fact, revenue from the sale of disposable catheters is starting to approach revenue from laser sales, and the company still sees a lot of growth for laser sales, Demmer said. Trimedyne won’t disclose sales figures for individual products.

Trimedyne posted $3.7 million in earnings on revenues of $20.7 million for the first nine months of fiscal 1988, which ended June 30. That was up from profits of $319,000 on revenues of $8.1 million in 1987, the first year the company turned a profit.