Here's my takeaway from Arun's comments at the Merrill Lynch conference tonight~
Based on the Pillar results (zero leaks), Arun decided to maximize Novadaq's first mover advantage by spending for additional trials to seal the deal for SPY technology. Apparently SPY surgeons have been offering suggestions to improve the product, and Arun will be spending to transform these suggestions into new R and D, to boster the patents/ intellectual property of the company. Endometriosis also seems to be a brand new opportunity for the company, as Arun mentioned it several times.
One big, very BIG new rinkle was Endometriosis. It is a new line item on the one week old revised May Investors presentation and was used in his Merrill Lynch Conference. 500k new Pinpoint applications per year. He mentioned they were looking to develop this agressively in the next year. A totally underserved market that prevents women from pregnancy and surgeons had no good or reliable way to distinguish from normal health tissue is now possible! This will prove to be the ISRG's Prostetectomy for Novadaq. It alone is big enough and valuable enough for hospitals and surgeons to invest in and adopt this technology in the way they provide health services for their communities. Watch for future references to this one.
Since a number of us are following the company very closely, much of what Arun said at last night's BofA conference was already known to us. However, as you heard, at the end he was asked why the need for so much additional cash, when the company was rapidly moving toward Break even cash flow. He added solid meat to the bone of that issue as you indicated in your posting. I also got the impression from some of his comments, that Pinpoint and Luna feedback he is getting is very positive. All in all, an extremely positive presentation.