You don't find too many medical technology companies alive and well more than 10 years after their IPO. Most halfway decent companies are bought out (like TheraSense and Perclose by AbbottLabs
In the first quarter, Cytyc's revenue rose 24%, margins expanded (fueling a 34% jump in reported operating income), and adjusted net income rose 29%. Supporting the future thesis I laid out after the previous quarter, domestic diagnostic revenue climbed about 8% this time around, while domestic surgical revenue was up 73%.
It seems fairly clear to me that surgical products are a big part of the company's plans for the future. In particular, there seems to be a bit more talk about the use of Cytyc's MammoSite products for breast brachytherapy, when a radioactive source is put close to or inside the area that needs treatment. That's not really an especially common procedure yet, but there are certainly some folks out there who think it could and should be.
And I do wonder what the future holds for the company's core ThinPrep product line. In particular, I'm interested in seeing what the advent of anti-HPV vaccines like Gardasil (from Merck
All the same, I wouldn't avoid Cytyc strictly on that basis. My issue is instead more value-based. These shares seem more or less fairly valued to me, and I generally like to do my stock shopping in the bargain bins.
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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).