Trimedyne Stock Soars on FDA Approval
The future for medical laser maker Trimedyne Inc. and its investors became decidedly brighter Tuesday as the company received long-awaited federal approval of its laser procedure for treating prostate enlargement.
The Irvine-based medical equipment company’s stock nearly tripled in a frenetic day of trading as investors rushing to get in on the ground floor drove the price to a close of $10.125 a share from Monday’s close of $3.44 on Nasdaq.
“It’s about time,” said an elated Peter Hyde, Trimedyne’s president. He characterized the Food and Drug Administration’s ruling Tuesday as “a breakthrough” that will push Trimedyne out of the research and development stage and into full-fledged production and marketing of a product with broad market appeal.
In all, more than 5.5 million shares, or almost 59% of Trimedyne’s total stock, changed hands. Trimedyne has soared higher--its shares traded at more than $23 in the late 1980s when, unlike in the last six years, the company was profitable--but the market for the cardiac-care products that drove Trimedyne to those heights has dried up. The company’s fortunes have flagged in recent years as it concentrated on developing the urological laser, which permits the surgical reduction of enlarged prostates to be performed as an outpatient procedure.
The head of the American Urological Assn.’s health policy council cautioned Tuesday that Trimedyne’s process is not the only alternative to traditional prostate surgery.
Increasingly, physicians are treating the condition through nonsurgical methods, including prescription medications that help shrink swollen prostate tissue, said Dr. H. Logan Holtgrewe, a Baltimore urologist. Other procedures that don’t require hospitalization, including ultrasound and microwave treatments, also are available, he said.
Trimedyne says, though, that its laser treatment can cut 20% to 30% from the cost of a traditional prostate reduction by eliminating hospitalization in most cases.
The treatment isn’t new--Trimedyne received federal approval for general urological use of its so-called side-firing laser several years ago. What touched off Tuesday’s market madness was FDA approval to market the laser specifically for treatment of benign prostatic hyperplasia--or noncancerous enlargement of the prostate. The condition affects about half of all men over age 50.
While several competitors have received approval to use their lasers for general urology treatments, including prostate reduction, Trimedyne now is the only company with a product approved specifically for that condition.
“This has the potential of being a home run product if Trimedyne approaches the market intelligently,” said David Anast, publisher of Biomedical Market Newsletter. “The pent-up demand for this type of product, given the push to managed care and medical cost reduction, may reach level of unquenchable for the next three to five years,” he said.
