Looking forward to the conf. call,
Skimmed thru the annual report, ( On NVDQ website)
Guidance in the Letter to Shareholders for Rev has been consistent $84m- $86m. So I hope this is conservative and I am putting my projection bet on Q1 overall Rev at $19.8.
Bal Sheet. I found interesting is that the AR YOY grew 61% / Allow for Doubtful accounts remained steady.
And If I am interpreting the Credit risk note correctly, 1 customer is a big client with a steady AR Value approx. $5 million each of the past 2 years, hopefully in disposables. Lots of items to ponder and plot as this Story of NVDQ unfolds.
Comedy thought on Letter to share holders paragraph 4 "does NVDQ really want China to reverse engineer and be a competitor?, just saying concentrate on the existing market; no worry about currency fluctuation and note in the fs stays IM.
Later expenses and RSU's and DSU's.
Good Luck to all Still Holding.
You are absolutely right . Over the past year we have had a number of strong upward movements only to come crashing back to the $9 to $10 pps levels. Over the past 10 business days the stock has increased on strong daily volume. The overall market has upticked over that period as well. We have moved from under $9 to nearly $12, which is a very strong move. Is it company specific or are we just rising with the tide?? Is it a coincidence that just prior to this move up, short interest declined by 650,000 shares during the first two weeks of April?? Short interest is now at its lowest level in over a year. I guess we'll know soon enough.
We both know that volume and price result from the emotional out put of the many hysterical old hens of the market.
Short term they are all but meaningless.
new industry report/outlook featuring Novadaq and competitors.
search: "Near Infrared Imaging Market by Product Type , Application, End User and Geography - Global Forecast to 2020"
Andersongordon, that was a nice pickup on the wording of their press release on the Needham presentation. I double checked some of the more recent press releases dealing with announcing their attendance at these investor conferences. None contained any language related to updating business performance.
Cash flow deserve some attention, going to focus to see if the BS improves although many will look only at the rev growth, but I agree some attention on the BS is warranted. It will be interesting to see what they report and have to say.
Their admin and sales costs were stunningly large!
Remember all the years of promises of being cash flow positive next year?
Can't help but feel we need an adult CEO to run the business end of this.
That's really significant Gordon!!
Enormous damage is presently done dissecting out innocent lymph nodes and sending them off to the pathologist!
In 1980 Dr Skinner cut an "S"shaped incision from my crotch to my diaphragm and dissected out all the lymph nodes along my spine..They were all clean, the traumatic surgery turned out to be unnecessary and my quality of life was seriously damaged in the process. My story isn't unusual.
Management this morning has announced it will update its business performance at the upcoming Needham Healthcare Conference. They announced $20 million revenue before the earnings for Q4 2015. An outperformance above the ~$18.4 expected. Will they do the same for Q1 2016?
Current estimates are for $17.46 M average, $16.5 M low, $18.0 M high. My model has them at $18.83 M.
If they beat last quarters $20.02 M the company stock should be off to the races.
We shall see.
Appreciate the posts and insight provided by all of your posts, Your posts add a new perspective to contemplate,
You make some interesting points to open for discussion. key factor 1
Who would be the main competition in this space?
Opinion from some of the conference calls management did not seem to concern with competition from what I heard. From an outside view agree or Management towing the line?
Again appreciate the insight and posts an hope to discuss the many facets that will determine the future of a potentially promising company.
Of better promise are Lymphatic surgeries. There are ~400k US surgeries per year. They are the result of cancers in the patient that the body funnels the cancer cells to as it fights them. The way the body does this is it picks one “Sentinel Node” to be the designated sacrificial lymph node. There is a “paired” node that can act as back up and usually all other nodes are cancer cell free! Currently the surgeon must cut out a biopsy of the “best guess” node and have it sent to a lab for analysis. This is not a good solution as time on the operating table is bad both for the patient, doctor, staff and hospital financials. Usually multiple nodes are removed to increase the chances the Sentinel node is gotten, but this has dilatory effects on the patient. They have less defenses to fight off new infections, or cancers and they have increased chances of secondary physiological maladies (see Elephantitus). Bottom line…there is no current acceptable way to find the Sentinel node and the risk of over harvesting nodes or missing it is a trade-off to be avoided. Novadaq does this with very very high confidence, both positive for the Sentinel node and negative for all others. It is real time, no lab time involved and low cost. The patients love it, they get to live and without a weakened immune response system or hideous Elephantitus. The doctors like the certainty of knowing they got the cancer and the lymph node depository and the hospital likes not to have repeat surgeries for missed cancers.
The FILM (Sentinel Lymph Node) study is currently going on and is expected to have preliminary results in Q4 2016 with submission and acceptance for FDA clearance near the end of H1 2017.
400k US cases, no other satisfactory treatment, quality of life if not life-saving results and financially a money saver for both hospitals and insurance companies.
“THE KILLER APPLICATION”
2) the company has to have an application that is both unmet by any other medical method and ubiquitous across the US and foreign markets
NVDQ tried Cardiac applications first but that field had a few competing medical techniques. Later they bought back the open surgery breast reconstruction application from LifeCell but they needed to develop a marketing staff and network with the hospitals and that takes time especially if their technology is not a make or break application. The recent “Nipple Sparing” initiative is strengthening their position but will it be strong enough to make “all” hospitals need it? Maybe, we will see especially if they receive “Standard of Care” status this could serve as the “killer application”. The total US volumes per year are ~100k, weaker than the ~150k US annual Prostatectomies but still substantial.
Continued in Part III-b
The Novadaq Story has the potential to follow the same pattern as Intuitive Surgical if it can satisfy the two key factors. The market for NVDQ is ~$2+ Billion US and probably ~$3 Billion International. ISRG’s market is about $1.5 Billion US and $1.5 Billion International. Gross margins for both are in the 65%-75% range (“semi-monopolistic”—see factor 1). As Novadaq has ~56 million shares and Intuitive Surgical has about 37 million shares the “terminal” price per share should be similar. ~$600 per share assuming a P/E of 20.
The two key factors:
1) the company has to have sole access to its valuable technology without hindrances of competitors or legal challenges
Novadaq, while it doesn’t have patent rights to Indocyanine Green, has developed hardware and software that take the special “fluorescent” ability of this chemical and transforms it into very helpful indications that enable surgeons and doctors to make decisions REAL TIME in the operating room or clinic that are both predictive of outcomes and also confirmatory (multiple uses offer superior value to one and done applications) of treatment. In addition NVDQ is developing molecules that attach to other cell types (specific cancers, bile, ?) to further distinguish them from the generic Indocyanine Green use. They have developed the first of these molecules and will be submitting it for FDA approval in H2 2017. Their first mover advantage and their “Eco-System” approach using all of their machines and applications from beginning diagnosis to treatment success also raises the barrier to entry of competitors. It is my current opinion that the strength of their “semi-monopolistic” position in this new approach to health care is as strong as ISRG’s is. I see them with a 5-10 year lead over potential competitors and hence should be able to capture the margin premium for 5 years if they do nothing and 10+ years if they continue to innovate.
Go to Part III for the "Killer Application"
Never compose anything of length within YH's posting window, otherwise you can lose a post from time to time if YH's posting nanny doesn't like what you've written (e.g. quoting a source, including a link, or trying to repost an edit of a message that you have previously erased from the board). Compose in a text editor and copy and paste so you can rework the text in case of rejection.
I really like how the rejected post just disappears with no complaint or warning from the system as to which sin you might have committed, it just disappears.
When all else fails, post elsewhere.