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A popular Wendy's commercial in the 80s made famous the question: "Where's the beef?" Good one. And here's an even better one: "Where's the alpha?" You might want to whip this one out the next time you meet with your portfolio manager.
Alpha is the over-and-above-the-expected return. It is the "value added." Therefore, it makes sense that a positive alpha means an investment has outperformed its market-predicted return, while a negative alpha would mean just the opposite. The expected return is calculated by a formula that takes into account the investment's level of unavoidable risk (aka beta).
Ever stepped into an elevator and after the doors close you become aware of an almost-suffocating scent coming from the woman next to you who must have bathed in perfume? Well, as you know, once the doors close you can't escape the smell until the ride is over. This is similar to beta, which is risk that can't be reduced or diversified away. A measure of "systematic" or market related risk, beta is used as a measure relative to a certain index -- such as the S&P 500.
So, for example, let¿s say your portfolio is managed to compete against the S&P 500. If you generate a better return than the index while not taking on added risk (standard deviation of returns) then you get alpha. Low beta means the market-related risk is low and vice versa for high beta.
Another example, let's say a mutual fund or stock has a beta of 1.5 relative to the S&
P500 ¿ that means it is 1.5 times as risky. So, over time, if the S&P 500 goes up 1%, your portfolio should be up 1.5%
plus (one can hope) some percentage of alpha. If the S&P 500 is down 1%, your portfolio should be down 1.5%.
Alpha
and beta are based off of linear regression of a set of data. Warning: this may cause a high school fifth-period flashback,
but it will be over before you know it:
The equation for a line is Y = a + bX.
a = alpha (the Y intercept - the added
value)
b = Beta (the coefficient you multiply X by)
X = S&P 500 (in this case)
Y = your portfolio
Home / Markets / Industries / Health Care
Monday, May 05, 2008
Cardica's C-Port(R) Flex A(R) Anastomosis System Facilitates Groundbreaking Port Only Robotic Beating Heart Bypass Surgery
Comtex
REDWOOD CITY, Calif., May 5, 2008 /PRNewswire-FirstCall via COMTEX News Network/ ----Cardica, Inc. (Nasdaq: CRDC) today announced that Husam H. Balkhy, M.D., chairman of the department of cardiothoracic surgery at The Wisconsin Heart Hospital in Milwaukee Wis., is one of the first cardiovascular surgeons in the United States to have performed several revolutionary closed-chest coronary artery bypass graft (CABG) procedures on a beating heart with the aid of the da Vinci(R) Surgical System. Applying his extensive experience with the C-Port(R) Flex A(R) Anastomosis System to robotic chest surgery, Dr. Balkhy has completed eight closed-chest beating heart CABG procedures on patients, all of whom were discharged an average of two days following surgery and were able to return to normal daily activities within two weeks.
During the procedure, Dr. Balkhy guides the da Vinci Surgical System to perform precise movements through fingertip-size incisions in the chest area, using a high definition camera and scope to facilitate visualization inside the chest. The off-pump, or "beating heart," bypass surgery is performed robotically without cutting the sternum and without the use of a traditional heart-lung machine.
"With the availability of the C-Port Flex A system and the recent introduction in the United States of Intuitive Surgical's EndoWrist(R) Stabilizer, we are seeing a convergence of technology that I expect will change the future of coronary bypass procedures and provide significant benefit to patients," said Dr. Balkhy.
"Multiple studies have shown that beating heart coronary bypass surgery has several benefits over traditional arrested heart coronary bypass surgery, in which the heart-lung machine is used. We have incorporated the beating heart approach in our practice for many years. I believe the newfound ability to 'spare the sternum' and perform bypass surgery using an all-port approach on the beating heart, with innovations such as the C-Port Flex A system and the da Vinci Surgical System, will further shorten recovery times and improve patient outcomes. As more surgeons become proficient performing this surgery, I believe that coronary bypass surgery may ultimately become a procedure requiring a relatively short hospital stay, a quicker return to activity and excellent outcomes for the majority of patients."
The C-Port Flex A system automates the attachment of the bypass graft to the coronary artery, eliminating the need to sew the graft using traditional suture and thread. "Just as a sewing machine can improve the reproducibility and speed of clothing production, I believe that this automated stapling device offers similar benefits by improving the reproducibility and speed of attaching the graft vessel during CABG surgery," added Dr. Balkhy, who has used the C-Port Flex A system more often than any other cardiovascular surgeon in the United States.
"These landmark procedures represent a significant advance for the field of cardiothoracic surgery. While the theory of beating heart robotic cardiac bypass surgery has been around for many years, the availability of the C-Port Flex A system is helping to enable robotic surgery on a beating heart to become a reality in cardiac surgery," said Bernard A. Hausen, M.D., Ph.D., president and chief executive officer of Cardica. "The C-Port Flex A device improves quality, reliability and consistency of bypass graft connections and can connect grafts at the back of the heart where it would be difficult or impossible to hand sew."
New Alternatives to Traditional Coronary Artery Bypass Surgery
In the majority of CABG procedures in the United States, the patient's sternum is split so the chest can be opened, and the heart is stopped temporarily while surgeons hand sew vessels together to bypass the blockages while a mechanical pump keeps the blood circulating through the body. Patients who receive on-pump CABG procedures stay in the hospital an average of five to seven days, and it can take up to two to three months for the patient to return to normal activity.
During a traditional "beating heart" bypass procedure, the patient's sternum is split, but the patient's heart continues to beat while a surgeon stabilizes the area of the heart to be bypassed. Eliminating the use of the heart-lung machine has been shown to reduce complications such as stroke, increased need for blood transfusions, and kidney and lung complications.
By using the robot together with the C-Port Flex A system, the beating heart procedure can be performed on a closed chest. Patients undergoing closed-chest CABG procedures may be discharged in 24 to 48 hours following surgery, and often return to normal activity levels within one to two weeks.
About Cardica
Cardica is a leading provider of automated anastomosis systems for coronary artery bypass graft (CABG) surgery. By replacing hand-sewn sutures with easy-to-use automated systems, Cardica's products provide cardiovascular surgeons with rapid, reliable and consistently reproducible anastomoses, or connections of blood vessels, often considered the most critical aspect of the CABG procedure. Cardica's C-Port(R) Distal Anastomosis Systems are marketed in Europe and the United States. The PAS-Port(R) Proximal Anastomosis System is marketed in Europe and Japan, and Cardica has submitted a 510(k) premarket notification for clearance to market the PAS-Port system in the United States. Cardica also is developing additional devices with Cook Medical to facilitate vascular closure and other surgical procedures.
Forward-Looking Statements
This press release contains forward-looking statements, including, without limitation, statements related to the potential improved patient outcomes and expanded accessibility of closed-chest CABG procedures from future use of C-Port Flex-A systems and the potential of C-Port Flex-A systems in the field of cardiothoracic surgery. The words "believe," "may," "will," "expect" and similar expressions are intended to identify forward-looking statements. These forward-looking statements are based upon Cardica's current expectations. Forward-looking statements involve risks and uncertainties. Cardica's actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties, which include, without limitation, risks associated with the long-term patency of graft vessels connected using the C-Port Flex-A system, market acceptance of Cardica's C-Port Flex-A system, manufacturing of the C-Port Flex-A system and its suppliers, and Cardica's sales, marketing and distribution strategy and capabilities. These and other risk factors are discussed under "Risk Factors" in Cardica's Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 2007. Cardica expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein. You are encouraged to read the Company's reports filed with the U.S. Securities and Exchange Commission, available at http://www.sec.gov.
SOURCE Cardica, Inc.
Copyright (C) 2008 PR Newswire. All rights reserved
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