Piper Jaffray (Minneapolis) med-tech analyst Raj Denhoy leaned heavily on metaphor in comments made during the opening session of his firm's 17th annual healthcare conference. Denhoy described the med-tech opportunity as "still lots of unplowed acreage," that acreage consisting of "hundreds of millions of people suffering medical states that can benefit from some sort of med-tech fix."

Operating margins in the sector ranged around 30%, a figure he called "virtually unheard of in the broader industry."

He cited also "the sickness of big pharma companies the last couple of years," suggesting that this is good medicine for med-tech's cause, but warning: "Of course, the monsters are never truly dead. They will come back eventually [and that's] something to look out for."

And he offered another set of warnings from the regulatory side, saying 2005 will likely bring "increased scrutiny" of clinical trials and marketing practices, further pushed by a more selective consumer.

Reimbursement also should continue to "draw some attention," he said, coming from "pushback" by government reimbursing agencies and other payers.

He cited cardiovascular, diagnostics and ophthalmology as arenas continuing to feature technologies that "just keep coming" and offering solid near-term gains.

"Med-tech is solid in 2005 and beyond," Denhoy concluded. "There's a lot of unplowed land. Earnings growth looks sustainable."

Don Long, Managing Editor