Thanks. I like the comment......for the Xi version.....
Hard not to deduce from that comment that they submitted a version different from the original Firefly.
Endo - The only mentions in the CC were that FDA clearance is still in process for the da Vinci Xi version of Firefly:
"Turning to new products, we’ve received FDA clearance for our Xi Vessel Sealer and are working through the clearance process with Xi Stapler and Xi Firefly in United States and other countries. These advanced technologies are an important step in filling in the Xi offering. Our Xi architecture simplifies implementation and improves performance for our advanced instruments, and we look forward to their introduction around the world. We have submitted our 510-K application for our single-site wristed needle drivers, and are working through the clearance process. Pilot product performance for the wristed needle driver for single-site is compelling. We expect it will add significant capability and efficiencies for single-site surgeons."
And also... "We are currently in the process of obtaining US FDA and international regulatory clearances for the Xi versions of our Stapler and Firefly products"
So we still have no idea when US FDA approval will come - best case is this quarter based on 90-day FDA cycle. Also, will the Xi version of Firefly include the newer Spy/Pinpoint capabilities? If so does this imply a re-negotiated deal with NVDQ?
You usually listen to the ISRG conference calls. Any mention of FDA approval for our equipment in the DaVinci?
Very astute Bharat. The adoption curve I have been calibrating with each new piece of information is very similar to the one I used for ISRG. There are differences but the value for Novadaq's suite of instruments is very compelling. Internationally and in wound care I think the adoption curve will be stronger than ISRG's though the US hospital adoption may be weaker primarily because of all the hysteresis caused by Obamacare. The maximum acceleration "knee" should manifest itself in Q2 or Q3 of 2015. That's where the analysts are the most behind the curve and upgrades will abound.
This is my current estimate for what it's worth.
Thanks for the note. I am impressed that you can estimate that the jump from 40% to double. I believe your confidence comes from having seen this phenomena or this stage of growth before with isrg. It will be interesting to see if nvdq scales any differently. nvdq is somewhat different since it has a multi-product play given that diagnostics/luna is now a viable product.
In the past few days the stock has meandered and declined for the first 5 hours. Then the volume picks up substantially and 10-20k shares every 10 minutes are purchased driving the price from a 1-3% loss to a small nominal gain. It looks to me like some institution or individuals are acquiring shares, perhaps as much as 500k in anticipation of the upcoming end to silence at the conference call. I expect a $.05 per share loss this quarter but underlying progress is being made in setting up the breakout expected in 2015. The marketing division is being assembled, and organized to support explosive growth. The papers and studies will either be in place or be released come early 2015. These studies will clearly and powerfully show both the clinical as well as economic benefits of NVDQ's new technology platform. I say platform because there are many new and exciting weld on technologies as well as applications that will enhance the argument for hospitals as well as clinics to include NVDQ systems in their health management and treatment.
Arun has stated repeatedly "40% revenue growth". Starting in 2015 expect this to increase to double that for a few years.
P.S. Forecaste: NVDQ goes positive recurring earnings in 1st quarter of 2015.
From my model:
Revenue for the 2nd quarter, $13.5 Million
Net income (excluding one time and stock expenses) $-2.5 Million
Earnings per Share (-$0.05@)
The should break even in the 4th Quarter!
Revenues of $19.0 Million
Net income (excluding one time and stock expenses) $-0.01 Million
Earnings per Share (-$0.00@)
The revenue drivers are well stated by Endo above. The expenses are the ongoing push for clinical and economic justification in existing and new application as well as the burgeoning sales and marketing hiring.
Breaking off from LIfecell should be immediately accretive to earnings. Their world wide opportunity is also unfolding nicely. The rollout of the nuclear medicine application in 2015 can't hurt either.
Patience is a virtue.
On occasion I have referred to the old Wall Street addage that money flows from the impatient to the patient. That philosophy has worked well for me over the past two plus years on this investment. However, patience is no guarantee an investment will be successful. Been there, done that.
So it is important to regularly question whether the actions of Novadaq warrant our continued patience. I, for one, listen to all of the presentations and all of the quarterly CC's, and all of the Investor Day presentations. When you see the continued upgrading of their equipment you have to ask yourself a couple of straight forward questions. Can a reputable hospital that performs a great nany complicated surgeries not have at least one of these machines in their surgery suites? Will surgeons who either see or become aware of the benefits of this equipment not apply increasing pressure on hospital administrators to obtain it? Are the surgery applications for this equipment expanding? Is the equipment cost effective enough to meet the requirements of a hospital administrator? If you follow this company closely, the answer to all of the above questions is an increasingly stronger and stronger yes.
Then add to the above the simple but critical fact that there is absolutely no current competitive equipment on the marketplace today or any time soon. My conclusion and the conclusion of many of the regulars here is that continued patience is overwhelmning justified,
" Asian sales in Japan and China - through partners - have not even begun yet (regulatory approvals coming)."
I'm not aware yet of any guidance or specifics regarding SPY sales/prospects in Japan or mainland China....can you fill me in with any references?
If you believe (as I do - and the mgmt of the co do) that the installed based by 2018 could be 4k+ devices - involved in an annual procedure count in the mid-six figures (Luna and Pinpoint usage are skewing higher already vs SPY), at 65-70%+ GM%, there is every reason to be patient, and not sweat the near-term results or stock gyrations too much - other than to feel they are directionally on the right path as far as education/utilization/ placements. My guess is the Lifecell JV once folded in, will add $15-18m overnight to the annual P&L. And people need to keep in mind - Asian sales in Japan and China - through partners - have not even begun yet (regulatory approvals coming).
Yes, given Canadian accounting practices, we could show a profit for the quarter. However, that is likely to be somewhat discounted. However, depending on the level of revenues, an operating profit is not out of the question. That would be incredibly good for us. I have to admit I never could fully understand why it needs to take 9 months to a year for a salesman at the company to become productive. I've been assuming that a majority of the salesforce hired come with some experience in marketing in the medical industry.
Glad to hear you are still in the game. I sold some shares last week, but bought back yesterday. Overall, this stock has weathered this market beat down than most of my others. Plus, it has great potential. Patience has paid off before, and it will again. GLTA longs.
Sentiment: Strong Buy