67 WALL STREET, New York - September 25, 2009 - The Wall Street Transcript has just published its Medical Devices Report offering a timely review of the sector to serious investors and industry executives. This 41 page feature contains expert industry commentary through 11 in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Developments in the Industry -- New Devices -- Negative Price Pressure -- Inject Mix -- Hospital Capital Spending Behavior -- Growth -- Rate of Growth Reliability -- Execution of Management -- Clinical Trials -- The Next Big Thing -- Innovation -- Acquisition -- Loss -- Major Turnarounds -- Productive Work Force -- Medication Adherence -- Undervaluation -- Improvement in Earnings -- Price Sensitivity -- Weakening Dollar -- Winning Market Share -- Significant Share Gains -- Profitability -- Regulatory Standard -- Opportunities -- Licensing Opportunities -- Collective Experience -- Drug Approvals -- Growth in Revenue -- Measuring Success -- Profit Margins

Companies include: Medtronic (MDT); Boston Scientific (BSX); Greatbatch (GB); Vascular Solutions (VASC); AngioDynamics (ANGO); St. Jude Medical (STJ); Edwards Lifesciences (EW); Stryker (SYK); Zimmer Holdings (ZMH); Abbott Laboratories (ABT); Johnson and Johnson (JNJ); Baxter International (BAX); Thoratec (THOR); HeartWare (HTWR); Hill-Rom Holdings (HRC); Accuray (ARAY); Smith and Nephew (SN.L); Wright Medical (WMGI); NuVasive (NUVA); TranS1 (TSON); Becton, Dickinson (BDX); C.R. Bard (BCR); Covidien (COV); CareFusion (CFN);Edwards Lifesciences (EW); Zimmer (ZMH); Nanosphere (NSPH)

In the following brief excerpt from just one of the 11 interviews in the 41 page report, an industry expert discusses the outlook for the sector and for investors.

MATT MIKSIC is a Managing Director and Senior Research Analyst at Piper Jaffray, covering medical technology and hospital supply stocks with an emphasis on orthopedics, spine and ophthalmology. Mr. Miksic joined Piper Jaffray after spending eight years in equity research at Morgan Stanley, where he was a member of the medical technology and hospital supply coverage team since 2002, with lead coverage of orthopedics, spine and hospital supplies. Prior to Morgan Stanley, Miksic was a Senior Manager with Arthur Andersen in its business consulting division, and he spent five years with a software startup. Miksic holds a bachelor's degree in computer science from Rutgers College and an MBA degree from the Leonard N. Stern School of Business at New York University.

TWST: As you said, you want to differentiate which ones are going to do better than others, and you pointed out a couple of those. Who might fall at the bottom of the list that you are covering right now?

Mr. Miksic: Even though there has been a recent rally, our group is generally speaking still a pretty beaten-up group of stocks. So it's not like there are any high-flying stocks in my universe at risk of overextending themselves in terms of valuation. But we do have lower-conviction names in our universe and a couple, in fact, have risk associated with hospital capital spending trends. KCI is a name where we are very cautious on the fundamentals and its ability to hold market share against new competition, pricing pressure and potential reimbursement pressure. It's a stock that's done quite well this year, but we feel it's coming under increased competition. It faces risk to some of its patents that protect what is essentially a monopoly market position in the U.S. in negative pressure wound therapy. I don't think anyone can predict the outcome of the company's patent trial scheduled for early next year. However, we should get some indication from the judge in the form of a preliminary injunction decision potentially over the next three to four weeks. Our cautious view assumes the company loses the trial, which we think will make it difficult for the stock to outperform our universe, hence our underweight rating. A couple of other neutral-rated stocks with exposure to hospital capital spending are CONMED and Stryker. They are not stocks that we are recommending that investors sell, but we are just more cautious on them than our overweight-rated stocks. As I mentioned earlier, we prefer not to have to make predictions related to hospital capital spending since we think visibility there will remain poor for at least another couple of quarters. Some investors are comfortable that these stocks are discounting the risk to hospital capital spending, in which case we say, "Go ahead and buy it." And over the long term you would probably be right. But we prefer to avoid having to make that prediction if we can avoid it, so we are more cautious.

TWST: You mentioned you also cover small companies that tend to be more innovative and are bought up by someone who is larger and has a greater segment of the market. Do you see any particularly innovative companies among the ones you cover?

Mr. Miksic: Sure, yes. I think the two overweight-rated names that we have in our universe that I would call very small cap or microcaps are MAKO Surgical and TranS1, both of which have what I would characterize to be highly differentiated technologies addressing large, well-defined markets. TranS1 addresses more or less the same spine market that NuVasive does. It's about $5 billion to $6 billion worldwide, and TranS1 can't address quite as much of it as NuVasive can at the moment, but they are heading in that direction. MAKO will address the $12 million worldwide market for hips and knees over time with its innovative robotic arm technology for orthopedic surgery. The company is currently focusing on knees, but they expect to introduce hips over the next three years or so. So those are two examples of small, emerging growth stocks driven by innovative technology. I think both of them, like a lot of the small companies in our space over the past 12 to 18 months with the coming downturn, as people saw that downturn coming in the back half of last year, I think a lot of these companies moved to shore up their capital position and tighten their belts to prepare for sort of a longer, tougher ride before another round of public financing or potentially some other type of liquidity event. So the good news is that although relatively small, I think they are in perfectly good shape to grow their businesses and develop as independent entities.

The Wall Street Transcript is a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs and research analysts. This 41 page special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online .

The Wall Street Transcript does not endorse the views of any interviewees nor does it make stock recommendations.

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