Medical and technological advances play a larger role than the macroeconomic environment in investment opportunities for health companies specializing in drugs and devices in the heart and liver space, says Duane Nash, M.D., Senior Vice President in the equity research department of Wedbush Securities.
“Particularly at the developmental stage, it’s the internal catalyst which play a far bigger role than the macro trend. Occasionally we will see macro trends that occur to health companies. For example, right now, we aren’t seeing as many acquisitions by Big Pharma, so that tends to hurt these small companies,” Dr. Nash said.
Nash likes Endologix (ELGX), which has a best-in-class device for treating abdominal aortic aneurysms, a condition previously treated through major surgery, but now can be treated with ELGX’s medical device. Dr. Nash also says the company currently has a 11% market share.
“[Endologix’s] current device is best in class, and they have a new device, which should reach the European market next year and the U.S. in 2014 or 2015,” Dr. Nash said. “For the near term, there is lower risk but opportunities for strong incremental growth, whereas the longer term, there is the opportunity for fairly explosive growth.”
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