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Cardiovascular Systems Gets Approvals in Japan, Widens Suite

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Cardiovascular Systems, Inc. (CSII - Free Report) recently announced receipt of approval from Japan’s Ministry of Health, Labor and Welfare (“MHLW”) for its Diamondback 360 Coronary Orbital Atherectomy System (OAS) with Classic Crown and ViperWire AdvanceCoronary Guidewire FlexTip.

Now featuring GlideAssist, Classic Crown is a popular coronary atherectomy device in the United States. Per management, Japan will be the first market with a chance to utilize Classic Crown and FlexTip together. We believe this new development will help the company bolster the top line from the sale of OAS.

Market Potential

The global market for coronary heart diseases is expected to witness huge demand on the back of growing cases of chronic diseases. Moreover, going by a report published by Technavio, the global market for coronary heart diseases is expected to see a CAGR of more than 5% between 2017 and 2021. Considering the company’s efforts, we believe it is well-positioned to gain from the favorable trend in the CAD space.

The company noted thataround 10-20% of the 280,000 Japanese patients who undergo percutaneous coronary interventions (PCI) annually have extremely calcified coronary lesions. Notably, orbital atherectomy modifies calcific plaque to enhance PCI results. Consequently, we believe Cardiovascular Systems is well poised to cash in on the bountiful opportunities in the niche market.

Portfolio Expansion to Widen Reach

Cardiovascular Systems is pursuing product improvements and evaluating new technologies to strengthen and broaden its portfolio of powerful micro invasive tools. During the fiscal first quarter, the company continued to gain from increased adoption of its new Diamondback 360 extended length or radial device and the Diamondback 360 with the new GlideAssist feature. Cardiovascular Systems has also been witnessing solid uptake of Sapphire II coronary balloon, OrbusNeich coronary balloons and ZILIENT guidewires.

Following the receipt of the FDA 510(k) clearance for the OrbusNeich Teleport Microcatheter (Teleport), Cardiovascular Systems recently announced the treatment of first patient in the United States with the same.

In November, the company announced the treatment of first patient in Germany with its Stealth 360 Peripheral OAS. Cardiovascular Systems announced the treatment of first patient with its Diamondback 360 Coronary OAS in Hong Kong in the same month.

Management also informed about submitting its 510(k) application to the FDA for the exchangeable peripheral platform, which is planned for launch in late fiscal 2019.

Cardiovascular Systems also plans to expand business by launching internally developed products and expanding into new geographies outside the United States.

Share Price Movement

Over the past year, shares of Cardiovascular Systems have gained 19%, against the industry’s decline of 7%. Launches and partnerships are likely to drive the stock further.

Zacks Rank & Key Picks

Cardiovascular Systems carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader medical space are Veeva Systems (VEEV - Free Report) , Integer Holdings Corporation (ITGR - Free Report) and Surmodics, Inc. (SRDX - Free Report) .

Veeva Systems’ long-term earnings growth rate is estimated at 19.5%. The stock flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Integer Holdings, with a Zacks Rank #1, has an earnings growth rate of 31.2% for the first quarter of 2019.

Surmodics’ long-term earnings growth rate is projected at 10%. The stock carries a Zacks Rank of 2 (Buy).

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