Aug.09, 2012 | 10:06 AM–Given Imaging forgoing colon camera for masses: Given Imaging stock tumbled 17% on the Tel Aviv Stock Exchange on Wednesday after the company admitted that its pioneering camera-in-a-capsule won’t be replacing invasive colon endoscopic procedures after all. Given Imaging had been trading at a market cap of nearly half a billion dollars thanks to fond expectations that the PillCam Colon, developed to investigate the source of bleeding, would mostly replace inaccurate occult-blood tests (blood in stool) and painful, annoying colonoscopies. The PillCam technique involves swallowing an admittedly not-exactly-tiny capsule containing a video camera that passes painlessly through the digestive tract, snapping pictures as it goes along. No pain, but evidently not enough gain either: The PillCam Colon just doesn’t work as well as traditional, horrible colonoscopies – or so it would seem based on the company’s decision to pull back from obtaining blanket approval for its use. So, to investors’ chagrin, Given Imaging advised the U.S. Food and Drug Administration that it won’t be seeking broad approval for its technology to replace colonoscopies, but will seek the nod to have its capsule used when colonoscopy is impossible, or, if the patient balks at having a tube with a camera jammed up his rear.
Analysts slash Given Imaging targets: Analyst Stephen Tepper over at Harel was unconvinced by the prospect of Given Imaging’s colon camera being “The Answer” for those cringing at colonoscopy. On Wednesday, after the company’s revelation, he cut his 12-month price target for Given Imaging stock from $24 to $16. And that’s still a 25% upside compared with the company’s closing share price in Tel Aviv. Tepper estimates that the potential market for the PillCam Colon has suddenly shrunk by 65%. There are also those question marks over how well it works. (Note that none of this applies to the company’s well-accepted PillCam for the small bowel and esophagus). Tepper also notes no growth in the PillCam Small Bowel Capsule Endoscopy in the company’s reports. Moving onto Oppenheimer, its analyst Sergey Vastchenok cut its target from $24 to $18, based on a multiple of 15 times estimated earnings in 2013…Read More>>