VNUS Medical Technologies: In the right vein

The stock market may have lost its legs, but VNUS Medical Technologies Inc. (Nasdaq: VNUS) is just getting started. With a minimally invasive technology that reroutes deoxygenated blood to the heart for a refill, the company is putting a new twist on varicose vein treatment.

What’s got VNUS charged up is its primary product line, the VNUS Closure system for varicose veins. The system, which includes the fast-selling ClosureFAST radiofrequency catheter, treats venous reflux disease — a progressive condition caused by malfunctioning vein valves that block the blood’s paths from legs to heart.

By definition, Closure closes the diseased veins, usually in outpatient procedures that require only local anesthesia, and re-channels blood to healthy veins so it can travel on to the heart. This beats vein stripping (ouch!), the standard way to treat varicose veins, which rivals strip mining as a maximally invasive practice.

VNUS claims that 25 million Americans have venous insufficiency, and that 72% of women and 42% of men in the United States will experience varicose veins by the time they hit 60. That doesn’t take into account the international market, which VNUS is starting to minimally — but resolutely — invade. VNUS also makes medical devices for other peripheral vascular diseases, including devices for use in peripheral arterial bypass and arteriovenous graft procedures.

Investors may not like surprises, but make an exception for VNUS: its surprises have been a delight. Revenues in the fourth quarter ended Dec. 31 outpaced analyst expectations, gaining 54% from the year-ago period. For 2007, revenues increased 37% to $70.9 million. For 2008, the company expects 25% organic growth, with revenues at $82 million to $86 million.

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