30 avril, 2007 21:25
Mentor Stock Down on Analyst Outlook
Associated Press 04.30.07, 2:38 PM ET
Shares of Mentor Corp., which makes cosmetic and reconstructive surgery products, fell Monday after a CIBC World Markets analyst voiced concern that new competition could take market share from the company.
The stock fell $1.21, or 3 percent, to $39.05 on the New York Stock Exchange in afternoon trading - slightly above its year-low of $37.25 hit last May. Shares, which traded at a 52-week high of $54.40 at the beginning of the year, plummeted earlier this month after Mentor cut its 2007 sales outlook and was downgraded by Piper Jaffray (nyse: PJC - news - people ).
CIBC World Markets analyst Amit Hazan reaffirmed a "Sector Perform" rating on the stock but said the recent buyout of implant maker Silimed by privately-held medical device developer Sientra could mean more competition in the breast implant market. Specifically, Santa Barbara-based Sientra could take 5 percent of the U.S. breast implant market in its first year.
Meanwhile, Hazan expects Mentor may purchase Medicor Ltd. in the next several months. Las Vegas-based Medicor, which is heavily burdened by debt, posted $37 million in U.S. breast implant sales in 2006, selling discounted implants.
"At the moment, we are a bit uncertain as to the strategy Mentor is conceiving, as it appears to us that it would be very difficult to offer both discounted and premium implants to the same customers, so we await further details on whether a transaction is consummated and how the dynamics would play out," Hazan wrote in a note to investors.
On the competitive front, Silimed has been selling its breast implants in Europe since 1995 and in Canada since 2000, and its Brazil factory is already in good standing with the Food and Drug Administration.
