CryoLife Estimates Upped

CryoLife, Inc. (CRY - Snapshot Report) reported Q2 EPS that beat our estimate by $0.05 on revenue that also exceeded our forecast. We again increased our FY08 revenue and EPS estimates. We also increased our FY09 revenue and EPS estimates. The management revised its FY08 guidance.

CRY’s operations continue to show signs of improvement due to growing BioGlue sales, the continued growth in the tissue business and favorable margin and cost trends. Our target price of $16 is based on roughly 3.7x our FY09 revenue estimate.

The management anticipates that BioGlue sales in 2008 will continue to increase due to growth in domestic and international markets. In 2008, BioGlue revenue is expected to grow to a range of $47-$49 million from $43.9 million in 2007.

Further, product sales growth is expected from the distribution agreement with MAST to distribute CardioWrap starting in the first quarter 2007 and the release of a surgical patch (ProPatch) made from bovine pericardium. This material is used to reinforce weakened soft tissues and provides a resorbable scaffold that is replaced by the patient's own soft tissue. The company continues to explore commercialization opportunities for the patch.

The company expects to submit an application for a CE Mark on BioFoam during the fourth quarter 2008. Based on a three or four month review process, CRY expects to receive a CE Mark on BioFoam in the first quarter 2009 and follow up with an initial launch two or three months afterward. CRY has also been developing BioDisc, a spinal disc nucleus repair system.

Read the full analyst report on CRY

Read the full analyst report on CRY