Vascular Solutions

VASC : NASDAQ : US$19.49
Target: US$25.00

Vascular Solutions manufactures and markets highmargin
products addressing the needs of the cardiac
catheterization lab as well as the IR suite. The company
went public in 2000 as a single product, vascular closure
company. Over the last three years, Vascular Solutions
has broadened its product offering with such devices as
the D-Stat Dry hemostatic bandage, the Pronto thrombus
extraction catheter, GuideLiner catheter and the Vari-
Lase laser.
All amounts in US$ unless otherwise noted.

Life Sciences — Biomedical Devices and Services


Investment recommendation
Looking ahead, we expect VASC to deliver double-digit revenue and EPS
growth via solid core business and continued strong execution of its
corporate plan (launch new products; leverage large sales force; drive
OM expansion). Potential near-term approval of GuideLiner in Japan
offers a potential near-term catalyst not in our numbers, while a
potential new reprocessing service (not yet finalized) could add more
“steak & sizzle” to the VASC story within 12 months. We leave our
2014E essentially unchanged, but this news portends more for upside,
in our view. We also introduce 2015 estimates calling for 10% revenue
growth & 12% EPS growth – also perhaps on the conservative side.
We reiterate our BUY rating on shares of VASC and increase our price
target to $25.00 from $22.50 (target derived from relative comparison to
small-cap comp group on both EV/Sales & P/E bases).
Investment highlights
The US District Court of Minnesota granted VASC’s request for  preliminary injunction against GuideZilla “mother-and-child” guide extension from Boston Scientific. Court date still estimated to be March 2015.
The court effectively ruled VASC is likely to succeed in proving that GuideZilla infringes VASC’s 3 patents covering GuideLiner rapid exchange guide extension.


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