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Bovie Medical pins hopes on high-tech knife
Bovie Medical Corp., a Melville surgical equipment maker whose stock price collapsed after the recession, is staking a comeback on a recently approved tool designed to minimize scarring and bleeding during surgery.
The handheld device, called J-Plasma, is designed to make high-precision cuts without damaging surrounding tissue. It received FDA approval last month, helping to boost Bovie’s stock, which has surged 27 percent since the year began. (The share price, at $2.70 in morning trading Monday, is still well below the $9-plus it reached in 2009.)
“Most small companies like ours hope to have a product that changes the market for them and creates an opportunity for real growth,” said Bovie chief executive Andrew Makrides. “We think J-Plasma has that potential.”
The firm was founded in the late 1970s to make disposable medical penlights. It now offers a variety of electrosurgical tools, manufacturing them at a facility in Florida.
The new product comes at a crucial time for Bovie. The firm suffered a series of setbacks as the economy limped out of the recession, staring in June 2009. Its stock took a nosedive, losing 80 percent of its value between June 2009 and October 2010.
Makrides blamed that loss, in part, on the recession. With less money to spend, fewer patients opted to have elective surgery. That led to fewer sales for surgical equipment firms like Bovie, Makrides said.
The approvals for J-Plasma, meanwhile, took longer than expected to secure, leaving Bovie waiting for its new product. The firm was also entangled in several law suits, including a patent infringement complaint from a rival biotech company.
Russell Cleveland, president of RENN Capital Group of Dallas, is a Bovie investor. He blamed the drop in the firm’s stock price on investors who were unreasonably spooked by the patent suit, which ultimately led to Bovie being paid a $750,000 settlement.
On Thursday, Bovie released an earnings report that showed its fourth-quarter revenue for 2011 dropped to $6.1 million, down from $6.2 million for the same period in 2010. Overall, revenue was up in 2011 for the company, rising to $25.4 million from $24.2 million in 2010.
Bovie’s new device forces a beam of ionized gas over a retractable blade, allowing surgeons to make precision cuts with minimal scarring. The cool gas, typically helium, helps quickly seal the wound to prevent excessive bleeding. Initially, the firm plans to market J-Plasma for use in gynecology surgery, where excess bleeding and scarring is particularly a concern.