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Tickers in this Article: CRY, RTIX
Cryolife Inc. (NYSE: CRY) is a stock that has managed to come full circle, even if it has taken five years to do it. Its shares currently sit north of $12, toward the higher-end of its 52-week range.

The Past
Cryolife is, and has been, somewhat of a story stock with a sketchy past. The company actually cryogenically preserves human tissue that it uses for implants into other humans, while its BioGlue is a bovine-based (cow) serum that can be used for on-site wound closure. It acts in conjunction with the body's own clotting mechanism.

Its tissue operations are for cardiac, orthopedic and vascular systems. It briefly traded north of $40 per share in 2001, but then its problems started after a "bioproduct implant" with contamination from human tissues resulted in the death of a patient. In fact, at one point back in 2002 to 2003 it was facing an actual viability risk.

The company recently posted a profit, and this profit may be the key turn for the company. If this continues, it should be able to draw older investors back and it should also be able to bring in newer investors.

Its main BioGlue revenue and its tissue processing revenue recently grew at 15% and 39% respectively on a year-over-year basis. It also put up a gross margin of 61% in Q1, up from 55% the year before. Cryolife ended with $10.3 million cash at the end of last quarter, and $1.7 million was received from the Department of Defense as advanced funding for the development of a "protein hydrogel technology" for wound care on the battlefield.

The best part of the financials is that the company gave full 2007 guidance of $92 to $96 million in revenue for product and tissue sales, broken up as $47.5 to $50.5 million in tissue processing and $43.5 million to $44.5 from BioGlue. It is always hard to trust companies that have had previous implosions, but management knows that in today's regulatory age the company cannot issue rogue guidance and then play the "oops" card.

Other Partnerships & Products
Cryolife entered a partnership with Regeneration Technologies, Inc. (Nasdaq: RTIX) last year that effectively swaps Cryolife's orthopedic tissue for Regeneration Tech's heart valves. Investors in Cryolife may have gotten the better part of the deal.

Synergraft is another potentially big deal that is on track for European approval later this year. Essentially, what this will do in the cardiac and vascular systems is strip valves and veins completely of everything except their collagen matrix. So that, when implanted, this biomaterial will repopulate itself with the recipients own cells free of foreign properties, eliminating the rejection of the tissue implant by the recipient. This would virtually eliminate the need for patients to take medication required after organ and tissue implants to avoid rejection. The company was really moving forward with Synergraft, before it was hit with all of the product liability lawsuits, which basically stopped all of its new product development.

Another innovation, Biodisc, is potentially huge with major upside to the top line and bottom line. It is used to restore proper disc separation for persons with herniated disc problems. Early trials and submissions are already in, so this one is still a ways off.

Biofoam is in development stage with the military and this is what the Department of Defense is providing advances and grants for currently. It uses BioGlue to stop bleeding associated with battlefield wounds, and this is small enough that it could become part of the basic pack gear for soldiers. If the concept takes hold, the company will also benifit from positive media coverage because of Biofoam's ability to save lives.

There is also an added chemotherapy targeting technology, but that is farther off and it is best not speculate on issues that are not in the relatively near-future. Regardless of the large potential-dollar aspect, investors are focusing on what they know the company has and what is very close to coming to market.

What's Ahead?
Because of the current cash position and the recent stock run, it's possible you could see a cash-raise by the sale of fresh stock. That would normally be a caution, but this, in fact, would act as a re-introductory agent that makes Wall Street firms interested in the stock again.

Its market cap is merely $310 million, and that is after it made a sizeable recovery from its 52-week low of $4.39 and highs of $13.25. While Cryolife is still a risky investment, it just may prove to be a risk worth taking.

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