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Conceptus, Inc. Message Board

  • andydee andydee Feb 20, 2008 11:42 AM Flag

    Conference Call Impressions

    OK, I'll be the first with a reaction to yesterday's CC...I will expect Guam, "smalls", gynodoc, etc. to chime in with reactions as well...

    1) The most striking aspect of the call was the "in your face" aspect of the PMA filings for the use of Essure with the ablation procedures.

    They already had label OK for the JNJ procedure, and just filed for the Bost Sci procedure, and will follow with a PMA with Novasure - HOLX's "ace-in-the-hole", the #1 such procedure in women's health care with 300K procedures/Yr in the US(?)...

    In response to a question about how he would characterize the cautions promulgated by others w/respect to the use of Essure with Novasure, because of the protruding element in the uterine cavity, Mark said he would use only one word..."Myth"

    Mark mentioned clinical trials...the first I'd heard about them...Anyone else have some info on them?

    2)There seemed to be a general consensus, among the management of CPTS and the analysts on the call, that Adiana truly won't be arriving on the scene before 2009...despite the allusions to that possibility during the last HOLX CC.

    3)I believe the approach to the Direct-To-Consumer program is sensible.

    It's focused - not national - starting in the areas where they have a critical mass of GYNs doing the Essure procedure in the office...

    They appear to have the ability to test the effectiveness of various media approaches...

    I thought the GYNs response..."It's your job, CPTS, to get the patients to call us...", was predictable. Docs are not in the marketing business - and we are all aware of the instances of other purveyors of medical eqpt and drugs implementing "pull-through" campaigns.

    4) The European "adventure" - might not be much of an "adventure", after all.

    Apparently they have managed to hold onto the management team that was in place before the buyout. Probably some contractual agreement - but if they are careful they can keep the ship moving in the right direction while they work to replace staff, if necessary.

    5)Cash. $94M as of 12/31, and $70M AFTER paying for the European Distributor...enough to fund a more aggressive DTC approach if it looks as though sales are appreciating rapidly.

    6)Finally, a forecasted profit - not much, but it is a good sign.

    And a price increase...Who knew?

    7)The 80/20 discussion...One of the analysts asked..."Do you see this eventually falling into the 80/20 category?" (Background...I think it was Pascal who first noticed that in populations that follow a "normal distribution", (virtually all "naturally occurring" populations do...)that 20 percent of the "actors" generate 80% of the "events"...) Mark replied with the example of Laser Eye surgery - at first marketed to all physicians, but after time becoming a specialty of a smaller group...an example of the 80/20...

    Instances of Essure office placements were up 126% Q4'07 vs Q4 '06 - an indication that we are oving to the 80/20 model...

    Ultimately that means that sales and marketing expenses will be limited...we won't have to talk every GP and GYN into setting up their office to do the procedure...

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    • the one scary part was that they have all of their cash in a student loan auction rate CDO. they will have to take some kind of write down i guess. And they are frozen right now as there are no bids for the paper. It probably means they cant get to a lot of their cash right now which is why the DTC is going so slow. They are screwed and could get very burned. Look at CBST they had the same problem.

      • 1 Reply to sfbizman2002
      • " the one scary part was that they have all of their cash in a student loan auction rate CDO. they will have to take some kind of write down i guess. And they are frozen right now as there are no bids for the paper. It probably means they cant get to a lot of their cash right now which is why the DTC is going so slow."

        First, where do you get your info? How do you know there are no bids for the Student-loan backed issues? The Port Authority auction rate securities, offered by GS which went off last week at 20%, went off yesterday at 8% - much better.

        Second, Greg said they have "no serious liquidity issues" - and I believe him. Besides the size of the DTC program is nowhere near significant, at this point...$5M now?

        Finally, what is constraining the size of the DTC isn't liquidity - it's utility. If they spend money now they know they won't see returns for 6 to 9 months - the "planning period" for the procedure. No sense going out with bigger bucks until you know if your money is well spent, and you know whether to emphasize print, radio or TV as the primary driver of interest in Essure..

        "They are screwed and could get very burned. Look at CBST they had the same problem."

        I don't know that, and you don't either. You might wish it so, if you are short - but when asked, Greg said it was too soon to judge the impact...and there is so much flux in the markets right now that no one can say how it will come out...