Trimedyne’s New Year Gets Happier and Healthier : Securities: Recent federal approvals of two products spur investor interest and shoot stock prices up by 33% in a day.

Spurred by federal approvals of two products this month, Trimedyne Inc.’s stock is enjoying a resurgence of interest as investors continue to swarm to the company and boost its stock price higher.

Trimedyne’s stock shot up 33% Tuesday, closing at $14.625 a share, up from $11 Monday. It was the second most heavily traded over-the-counter stock in the nation with 3.37 million shares changing hands.

“Medical stocks are hot, hot, hot, hot, hot,” said Jeffrey Kilpatrick, president of Newport Securities in Costa Mesa. “Any news that sounds halfway plausible causes a buying spree. Trimedyne is in the right industry at the right time.”

The Irvine company’s stock languished between $3 a share and $9.75 a share last year as questions arose about the company’s ability to market its advances in laser technology. But the price has skyrocketed 176% since its New Year’s Eve close of $5.375 a share.

Arthur Bertolero, who became Trimedyne’s chief operating officer after a management shake-up last March, said the only explanation he had for the huge interest in his company were two public announcements made this month.

“Things seemed to happen after those two press releases,” he said.

The stock was bolstered first by the company’s Jan. 6 announcement that it had received U.S. Food and Drug Administration approval to expand to 10 the number of medical centers experimenting with its excimer cold laser. The procedure, used as an alternative to heart bypass surgery, had been allowed for use in three hospitals.

The price really took off after Friday’s announcement that the FDA had given Trimedyne clearance to market a laser to treat spinal disks that cause back pain. The stock price leaped 35% Friday and jumped an additional 28% on Monday.

“Everyone’s excited about the back operation,” said Mark Matheson, a research analyst at Cruttenden & Co. Inc. in Newport Beach. “It has all the right buzzwords: It treats back pain problems, it has a 90% success rate, and it takes only a few minutes as outpatient treatment.”

In addition, the procedure is one that physicians should be able to master quickly, he said.

For many medical technology firms, overly optimistic investors have been sending stock prices on roller coaster rides, said Kilpatrick of Newport Securities. After an FDA approval for a cold laser catheter was announced last September, Trimedyne’s stock similarly jumped. But the price then was near its lowest ebb.

It’s too soon to tell if Trimedyne’s recent investors are expecting more than what the company can deliver, Kilpatrick said.

“Companies like Trimedyne are going to have great profit pictures downstream,” he said. “Shareholders buying today are very optimistic. Sometimes that pays off; sometimes they’re sorry they did it. There’s a lot of risk, and only time will tell.

“If Trimedyne continues to get FDA approvals and its products prove to be effective, the stockholders will have made a good deal. If not, then the stock was overpriced.”

Trimedyne Stock Soars The share price of Irvine-based Trimedyne has shot up 176% since Dec. 31. Dec. 31, 1991: 5.25 Jan. 14, 1992: 14.50 Source: Associated Press