After zooming from 2 on Sept. 21 to nearly 6 in mid-December, shares of Cardiac Science (DFIB) had surrendered most of their gains by Apr. 10, when they closed at 2.60. The reason: Blocks of "locked-up" stock got released in December and March, causing heavy selling by holders who had received shares from Cardiac's purchases of SurvivalLink and Sweden's Artema Medical, both makers of defibrillators--for the treatment of cardiac arrest.
Cardiac makes portable external defibrillators and patient monitors that instantly and automatically kick in when cardiac patients suffer life-threatening arrhythmia. It supplies hospitals, schools, municipalities, and the workplace. Its Powerheart Cardiac Rhythm Module is connected to high-risk cardiac patients at all times during their stay in the hospital. It defibrillates in a matter of seconds without human intervention when a shock occurs, says John Calcagnini, of CIBC World Markets, who rates Cardiac a strong buy, with a target price of 8.
Although Medtronic is a competitor, "Cardiac is the only company with this technology," he says. Powerheart requires the use of a $20 disposable electrode every day for each patient. The potential market for electrodes alone is about $600 million a year, says Calcagnini. He figures Cardiac, which has been in the red, will earn 17 cents a share in 2003 on sales of $78.3 million, vs. 2002's $42 million. By Gene G. Marcial