SAN FRANCISCO – As the JPMorgan Healthcare Conference kicked into high gear on Monday, space wasn’t the only thing at a premium in the always-crowded hallways and conference rooms of the Westin St. Francis. Again, as usual, the conference is featuring a quality array of companies vying for harried attention of attendees’ attention, attempting to decided how to most rapidly get from point A to point B to hear their stories.

While starting off the post-breakfast sessions with graphic pictures of wounds might not seem like the ideal way to begin a meeting, Kinetic Concepts (KCI; San Antonio) treated these hearty participants to a feast of these – along with potentially lucrative statistics concerning its business opportunities.

Pitching her company’s potential was President/CEO Catherine Burzik, who noted that KCI’s vacuum-assisted closure technology, designed to speed healing and improve outcomes in complex wounds (surgical, trauma and ulcers), has only penetrated the U.S market to the tune of 45% to 47%. This leaves plenty of growth opportunity for a company that saw its VAC (vacuum assisted closure) revenue rise from $86 million in 2000 to around a robust $1.28 billion this past year.

Burzik said that the company will launch its third-generation VAC platform by the middle of the year, with this newest edition having a notable advantage that wasn’t enjoyed by earlier iterations of the system:

“Importantly,” she said, “these are the first negative pressure platforms that have been approved by the FDA for home use” – an okay greatly expanding the technology’s market opportunity..

The company also has a therapeutic surfaces business that Burzik said is divided into three sub-sectors: products for wound care, baritatrics and critical care

“KCI is proud to hold No. 1 or No. 2 positions in the rental segment of these three sub-segments,” Burzik said.

Burzik said she believes her company should greatly benefit from the Centers for Medicare & Medicaid decision not to reimburse medical facilities for hospital-induced pressure ulcers, a rule scheduled to go into affect in October.

“We think this provides a nice opportunity for us to continue to partner with hospitals,” said Burzik, noting that there are annually 60,000 deaths in the U.S. from these types of ulcers and that they cost the country nearly $11 billion annually.

Burzik said that KCI’s VAC business represents about 80% of the company’s revenue, its therapeutic surfaces business providing the remainder. Currently, about 72% of the company’s total revenues come from U.S. sales, the rest from the international market.

Another company with exciting prospects for 2008 and beyond is Intuitive Surgical (Sunnyvale, California), a maker of robotically-assisted minimally invasive surgical systems.

According to Ben Gong, VP of finance and treasurer, the company — founded 11 years ago and going public in 2000 — has enjoyed astounding growth, with a 64% spurt in sales in 2007. The company’s operating profit is up 85% for the year to date. Currently, the company’s stock is trading at an astounding $285 a share, and that’s down from its 52-week high of $359.59.

Shares of Intuitive closed out 2007 at $323, more than triple its year-earlier close of $95.90.

Motley Fool recently dubbed Intuitive a Best Stock for 2008, and a look at the numbers appears to back up that prognostic.

Gong said the company currently has an installed base of about 719 worldwide for its flagship da Vinci Surgical System, including 554 in the U.S, 119 in Europe, 55 in the rest of the world.

The company has been building a portfolio of FDA clearances which allows it to market products in the areas of urology, oncology, cardiothoracic surgery and general surgery.

Gong said the company operates on the classic razor/razor blade model, with the “razor” being the da Vinci system which sells for $1 million to $1.7 million apiece.

The da Vinci, Gong said “has represented between 50% and 55% of our revenues this year.”

The “blades,” or recurring revenues, for the company, Gong said, come in the form of instruments and accessories used with the system for the various procedures “to the tune of $1,500 to $2,000 per procedure. In addition, every system that we sell is accompanied with an annual service agreement, which sells for about 10% of the sales price of the system, which equates to about $130,000 per year per installed system.”

This recurring revenue has accounted for about 45% of the company’s revenue for the year to date.

Several areas have served to key recent growth, according to Gong. One such area is that of prostatectomy in which from 32,000 to 33,000 procedures were performed with the system worldwide.

“We’re continuing to expect a growth of 65% on this procedure this year, which would get us to exceed 50,000 procedures worldwide,” he said.

Even with these great numbers, there is still a lot more growth potential for that market, with nearly 235,000 people diagnosed in the U.S. alone with prostate cancer. “With just this one procedure alone, we could generate over half a billion dollars in revenue in the United States. Worldwide, we certainly think we could double that.”

Hysterectomy is another area of growing business for the company, and Gong pegged it as an opportunity “that could exceed over $1 billion in the United States alone.”