Company takes its market to heart.

Cardiac Science Inc. wants to take the top spot among makers of external heart attack fighting defibrillators within the next year or two.

It's no small ambition. The Irvine-based company will have to pass a big rival, Royal Philips Electronics NV, which makes the top-selling Heartstream defibrillator.

"We're right on their heels," Ray Cohen, Cardiac Science's chief executive, said during last week's Roth Capital Partners LLC's investor conference in Dana Point.

As of 2003, Cardiac Science held 28 percent of the automated external defibrillator market, trailing Philips at more than 30 percent. Physio-Control, a unit of Minneapolis-based Medtronic Inc., is the third-ranked company in the market.

Cardiac Science makes defibrillation devices that deliver tiny shocks to people with heart disease. The company's products include its core Powerheart portable defibrillator and Survivalink, a defibrillator aimed at public schools.

The company just signed a contract with the New York City Board of Education to put defibrillation machines in 1,200 public schools, Cohen said.

This year, Cardiac Science plans to introduce two new defibrillation devices aimed at the consumer market. Philips already offers a model to heart patients by prescription.

At the conference, Cohen estimated the global external defibrillation market at around $200 million, 85 percent of which is in the United States. He has said he expects the external defibrillation sector to reach $650 million by 2006.

Cardiac Science's potential is big because global markets are some five years behind the U.S. in terms of adopting public access to defibrillators, Cohen said.

Cardiac Science projects it will reach $95 million to $100 million in 2004 sales and hopes to turn its first profit this year. For 2003, analysts expect the company to generate $64 million in sales. Fourth-quarter and year-end results are due March 2.

As of last week, Cardiac Science's market value was nearly $400 million.

"We believe that Cardiac Science's strong technology platform continues to provide the company with a strong competitive advantage in the marketplace," wrote Jason Kroll, Roth's medical device analyst, in an October research report.

Kroll said his projections "rely heavily on the continued acceptance of Cardiac Science's existing products and the timely commercialization of new products. In addition, unforeseen product and price competition, along with product malfunctions, could hamper future sales growth."

VITA REED

Orange County Business Journal