) to reduce from neutral.
Analyst Patrick Pace says he's concerned about an increasingly competitive environment in the chronic pain market and its effect on revenue growth.
Although Advanced Neuromodulation has a rechargeable battery product like Medtronic and Boston Scientific, he believes shares are at risk as Boston Scientific tries to gain a foothold in the marketplace.
While Pace continues to believe the main driver of incremental value for the company is the development of new products in the pipeline, he doesn't see an impact until 2008.
He says upside risk to reduce rating is acquisition of company, which the stock price already reflects potential. He keeps his $31 target.