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[IP] Big Things Could Be Ahead for MiniMed

Wednesday November 1, 6:00 am Eastern Time
Big Things Could Be Ahead for MiniMed
By Philip Fine, fund manager

The management team of Philip Fine, Christopher Ely, and David Smith has 
guided Loomis Sayles Aggressive Growth (Nasdaq: LSAIX - news) to the mid-cap 
growth category's top percentile during the trailing three years through 
October 30, 2000. This success has come as a result of owning fast-growing 
technology and health-care picks with experienced management teams that have 
niche positions in their industries. Today, Fine discusses one such stock, 
MiniMed (Nasdaq: MNMD - news).

Why Fine Likes MiniMed
``MiniMed is a great example of the kind of franchise company that we find 
attractive. As growth investors, we look for companies whose products or 
services have leading shares in large and growing markets; that have strong 
proprietary technology; a robust business model that leverages that 
intellectual property; and an experienced management team with a financial 
stake in the success of the company.

''A leader in the design and manufacture of external infusion pumps and 
disposables for the delivery of insulin, the company has revolutionized the 
management of Type I diabetes. This is obviously a huge market, with 
approximately 1 million Type I diabetics in the United States alone.

``MiniMed has more than an 85% share of the core pump market. In addition, it 
is rolling out an implantable pump (similar to a pacemaker) and has received 
FDA approval for a glucose sensor or monitoring device that would provide a 
feedback loop to the delivery mechanism. Together, the new pump and sensor 
would approximate an artificial pancreas.

``MiniMed has a strong intellectual-property position, with more than 100 
issued U.S. and foreign patents. The company has shown consistent top-line 
growth of 40% or more during the past five years, based on a strong recurring 
component, with gross margins in the mid- to high- 60% range. Revenues in the 
September quarter were a touch light, and the stock has pulled back a bit, 
providing new investors with an attractive entry point.

''Finally, and perhaps most important, the company boasts a seasoned 
management team. CEO Al Mann has founded and sold six companies and owns 
almost 30% of the stock.``

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