Trimedyne Stock Soars 59% on News of FDA Approval : Biotechnology: Though the market was bullish on the ‘cold laser,’ experts say the firm faces an uphill battle.

Trimedyne Inc.’s stock price soared 59% Friday after the company announced it had won U.S. Food and Drug Administration approval to market its new “cold laser” catheter for removing fatty deposits from blood vessels in the legs.

The stock closed up $2 at $5.375 a share, the largest percentage gainer among all over-the-counter issues Friday.

Trimedyne once was a market leader in the use of lasers to deal with plaque, the fatty deposits that clog arteries. But the company since has suffered from technological and marketing problems, securities analysts said.

Four years ago, Trimedyne stock was trading at about $24 per share. It hit bottom last year at $1.625 a share and this year has traded between $3 and $6.

The FDA approval, announced after the stock market closed Thursday, allows the Irvine-based company to market its new HaloCath laser catheter, which is 3 millimeters in diameter, for use in clearing blood vessels below the waist.

The catheter, which is attached to a laser, is inserted through a small incision in the thigh and fed into the obstructed artery, where it emits a point of laser energy that vaporizes plaque.

The company says the “cold” laser technique clears the plaque without heat damage to the artery wall, which had been a problem with the old generation of “hot” lasers.

Cold lasers pulse on and off rapidly and cool down during the fraction of a second they are off, eliminating thermal damage. Trimedyne is also conducting clinical trials on two even smaller catheters, 1.6 millimeters and 2 millimeters in diameter, that can be threaded into the tiny, tortuous arteries inside the heart, said Richard A. Demmer, Trimedyne’s corporate secretary.

If approved for use in the heart, the smaller HaloCaths could find a huge market--up to several hundred millions of dollars--said Chriss W. Street of the Reorganized Securities Group in Los Angeles.

But it is not the applications for blood clots in the legs that propelled Friday’s bullish market for Trimedyne stock, Street said.

“The stock is not up on treating phlebitis,” Street said. “The stock is up on treating heart disease.”

However, Trimedyne will still face an uphill battle persuading investors--and surgeons--that the new technology is both state-of-the-art and practical, Street and other analysts said.

“The good news is they appear to have a product that can move them back toward a leadership position,” Street said. “The question is, now do they have the marketing capability and the leadership ability to take their improved position and prosecute it in the marketplace?”