Original Source: FD (FAIR DISCLOSURE) WIRE
. Andy Rieth, Guidant Corporation, Director, IR . Guido Neels, Guidant Corporation, COO . Fred McCoy, Guidant Corporation, President, CRM
. Dana Mead, Guidant Corporation, President, VI . Dr. Beverly Lorell, Guidant Corporation, Chief Medical Officer . Keith Brauer, Guidant Corporation, CFO
For the full year, GDT is reiterating its full-year expectations for sales and earnings to $3.75-3.95b, and $2.40-2.55 per share. For 2Q04, GDT expects sales in the range of $910-950m and EPS of $0.54-0.60. Q&A Focus: Products, guidance, and clinical studies.
A. Key Data From Call 1. 2004 expected sales = $3.75-3.95b. 2. 2004 expected EPS = $2.40-2.55. 3. 2Q04 expected sales = $910-950m.
4. 2Q04 expected EPS = $0.54-0.60.
S1. Business Update (G.N.) 1. Stents: 1. Yesterday GDT announced that it identified an issue with the stainless steel platform of the CHAMPION stent. 2. This is important for two reasons:
1. Safety, efficacy, and a clinical data of the bioabsorbable polymer and the drug remain excellent. 1. This was confirmed in Paris.
2. GDT knows a lot about metallic stents from the experience
over the last seven years. 1. GDT has the world's best engineers in the field and their brains and energy are fully focused on fixing this. 3. So far in 2Q04, the US drug-eluting stent market penetration
has accelerated faster than expected. 1. This impacts metallic stent revenue. 4. Surgical promotion revenues are affected by the rapid increase of the Taxus market share. 5. On the other hand, GDT believes that Taxus peaks in market share and Cypher is regaining some ground. 2. Implantable Defibrillators:
1. GDT continues to see confirmation that the market has a
sustainable growth rate of 20% well into the future. 2. This is supported by the co.'s own visuals and those of the largest competitor. 3. Moreover, GDT continues to feel good about its position in the market. 4. Last week, a major milestone was reached with the publication of COMPANION. 5. In this article, positive results announced last year were confirmed and that should continue to drive physician acceptance of Cardiac Resynchronization Therapy.
3. 2Q04 Financial Performance: 1. GDT is comfortable in achieving the midrange of the guidance that was issued previously. 2. GDT's range was $910-950m for revenues and $0.54-0.60 for
S2. Cardiac Rhythm Management (F.M.) 1. Worldwide Defibrillator Market:
1. In the five years leading up to 2002, the worldwide defibrillator market grew annually at an average rate of 19%. 2. Beginning in 2Q02, the confluence of the then recent publication of the (Indiscernible) study in the New England Journal of Medicine and the May 2002 launch of CRT defibrillators in the United States propelled market growth rates to extraordinarily high levels. 3. This growth was predictably followed beginning in 2Q03 with a period of high, yet declining growth rates as the co. began to annualize against the large denominators. 4. The difficult call for all was the level of growth at which the market would consolidate in advance of the publication of COMPANION and, if positive, the presentation and publication of the clinical trial outcomes.
5. The co. did lean on the history of the market as it called
this consolidation point at 20% or so and it now appears that
the 1Q04, which incidentally grew at exactly the historic
benchmark, represents that consolidation point. 6. Based on the successful outcome of SCD-HeFT and its resulting presentation at ACC Scientific Sessions in early March, the market for defibrillators has experienced strengthening growth. 7. The publication of COMPANION in the New England Journal of Medicine this past Thursday provides another key milestone towards higher growth.
8. The market impact of these two powerfully positive clinical
studies is likely to be felt for quarters and years to come,
and the positive market impact particularly driven by SCD-HeFT
is already in evidence. 9. As a result, GDT is raising its estimate for the worldwide defibrillator reported revenue market growth in 2Q04 to the mid-20s. 10. Further, the co. is raising its worldwide defibrillator revenue YoverY growth estimates for 2Q04 from the low digits now to the mid-teens. 2. Heart Failure Therapy: 1. Looking forward to the rest of the year, GDT has as several strengths upon which to draw. 2. The 2004 CRM product portfolio is exceptionally competitive. 3. In heart failure therapy, the co. is armed with the RENEWAL 3, the RENEWAL 3 high energy and the RENEWAL TR, each very competitive with existing and emerging competitor offers. 4. GDT is further armed with EASYTRAK left ventricular lead and the RAPIDO lead delivery system. 5. At the Heart Rhythm Society meeting this last week, GDT unveiled the RAPIDO advance lead delivery system. 1. It's an exciting step forward in sourcing the target vein for left ventricular lead placement. 2. During 2H04, GDT plans to move the playing field again with two new EASYTRAK leads, EASYTRAK 2 and EASYTRAK 3 each with bipolar sensing and pacing capability.
3. In the case of EASYTRAK 3, the co. is bringing forth a new
fixation mechanism designed for stable placement in larger venous anatomy. 4. These advances are important reminders that the competition
for CRT defibrillator and pacemaker market share is and will be greatly influenced by access and lead placement to the left side of the heart. 6. GDT Heart Failure Certified Field Representatives have an average implant experience of over 50 cases and physician
implanters of the top 80% of GDT CRT devices have a personal
experience with GDT people and products in an average of over
40 cases. 7. As a direct result of the growing experience, successful placement of GDT CRT systems on an intention-to-treat basis has risen through time to the range of 92-96%. 8. The co. supports this observation further with the experience
in recent GDT clinical trials. 3. Tachycardia: 1. In tachycardia, GDT is newly armed with the VITALITY 2 ICD and the RELIANCE G …