At the time of the transaction, BioFire had existing sales of $70 million...and was bought for $450 million I believe. Call it 6.5X sales. So you're asking someone to pay for NSPH's FUTURE sales...say $50 million for round numbers.....at the same multiple would give you a comparable buyout price of $325 million. Divided by 75K outstanding shares, you get a very generous price of $4.33/share....basically double the present price.
Candidates for forking over this type of cash?
And our numbers that we ran based on a tuck in being consummated by early 2014 prove the going it alone scenario inferior. The numbers that Nanosphere has provided are roughly $20 million in revenues in 2014 and nearly double that or for simplicity $40 million in 2015. However based on our analysis the tuck in outshines those numbers by a country mile (as NSPH's will require at least one more significant cash raise). Why the tuck in outshines. Namely because given a majors ability to gain almost immediate hospital credibility the placements truly finally ramps. They also get the going live time cut in half with the hospital. So you finally start to see the razor/razor blade model in action with consumables really starting to mean something. Our projections are $35 million in 2014 for NSPH and $75 million plus in 2015 with break even or close to it as being part of a major player. Those sort of numbers are so much better than the going it alone strategy I have to ask myself why our board is not out there seeking the deal? In my opinion it boils down to the hopes and dreams of one investor here that has been shown favor like no one else. Her name is Ann Lurie and her firm is Lurie Investments.
I will tell you I have disagreed with this management and our board of directors since last August of 2013. Our opinion was after the guidance reset it was up to management at NSPH to prove us wrong (about the need to seek a tuck in) they have not to date. The BioFire transaction with BioMerieux said to us if you want to be a bench molecular diagnostic company in the future gain scale and do it quickly to have entry into the hospital market. And for both BioFire and Nanosphere that option meant a tie up with a major diagnostic company or Maldi player. To BioFire's credit they were proactive. If our company doesn't see the ramp in placements given the gram negative approval first part of January I say all investors here have a real case against going after your management and board of directors. And I have facts and backing of an expert on this call.
Nanosphere's technology platform and assets make it a great acquisition candidate at this point in time. Especially given the hopeful mid year enteric assay FDA approval plus the entire blood infection already approved. But I want to let all board posters know I don't have immaculate perception although sometimes I'm sure most board members think by my posts I believe I do. But to my credit three of the last five health care investments we bought were tuck ins.
Being right never gets old.... lol Not that fundamentals aren't important but unlike balance sheets charts cannot be cooked. They don't lie.
What do you think about next week's "Investor Day". Is it an attempt to right this ship. Will they tell us once and for all what this company is all about and what they envision for our future?
"What is just driving me/us crazy ..."?
Are you referring to your multiple personalities or the voices in your head when you refer to yourself in the pleural?
Sentiment: Strong Sell
Can someone please explain all these small volume trades? Everyday I see tons of 100 share volumes ... Is this a tactic someone using to drive the price down? If so, doesn't the trade fees add up substantially to make any sense in this strategy?
a real viable entity......there's a flow......sales force doubled, revenue doubling, added assays, lower prices for consumerables, .........they're even more relaxed and confidant in the presentation......but it's going to be a while say seven qtrs (09/15), when they'll begin to attract attention for reaching the 75 break even in early 17. A long the way I'm sure there will be many trading op's........Remember rule # 1. play with house money asap.
thanks for the update. I would think that they would save any major update for their investor day. The main thing I would want an update on is how they are progressing at getting hospitals to convert to full use. Any update their?