Ahead Of The Bell: American Medical Systems

NEW YORK (AP) — An analyst upgraded shares of medical device maker American Medical Systems Holdings Inc. Tuesday, saying he is less concerned about competition in the field of treatments for male urinary incontinence.

Analyst Jonathan Block of SunTrust Robinson Humphrey raised his rating on the Minneapolis company's stock to "Buy" from "Neutral," and set a price target of $22 per share. The shares closed at $15.86 Monday, and the target price implies growth of about 39 percent.

American Medical Systems shares last traded at $22 in 2006.

Block said he once expected sales of American Medical Systems' AdVance device would be hurt by the launch of a newer product, Coloplast Group's Virtue. But Block said Virtue appears to have a higher rate of side effects than AdVance, and Coloplast has struggled to roll out the device. The company now appears to the planning to step up commercial efforts in mid-2010 instead of late 2009, he said.

"While we continue to expect some trialing, with a slow rollout and safety possibly an issue, we question the level of success Virtue will have in the market," he said.