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Novadaq Technologies Inc. Message Board

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  • farfignugen21 farfignugen21 Jan 24, 2013 7:08 PM Flag

    ISRG sold 88 NVDQ Firefly units in Q4

    OEM and consummable terms of ISRG deal are avail from analyst reports and from the co. They are 2+ yrs into a 10-yr agreement with ISRG. Dont believe terms are renegotiable, but not 100% on that. Deal is certainly profitable but not hugely so on OEM side and $200-250 on kits. But the benefit of the tech being validated by ISRG, widely distributed and gaining familiarity with surgeons/hospitals is incalculable, plus ISRG will eventually have to re-up given how integral Firefly is becoming to DaVinci.

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    • farfignugen
      As I know you are well aware, the real income for NVDQ will hopefully come from the sale of razor blades and not the sale of the razors. There is probably a significant gross profit margin associated with the sale of those $250 kits.
      regards endo and thanks for the input

    • andersongordon Jan 25, 2013 8:21 AM Flag

      Thanks farfignugen21.

    • farfignugen21. my thanks to you also for the good info.

      I have been holding ISRG for 7 years and started a much smaller position in NVDQ about 6 weeks ago (cost basis $8.90/share). My interest was triggered by what ISRG is doing with Firefly, and after studying NVDQ for a while I pulled the trigger on a starter position. So far I am more than encouraged by how the ISRG/NVDQ joint venture appears to be panning out. The recent Corporate Presentation on the NVDQ website is certainly encouraging as well. I believe the future looks bright for this company.

      As for the ISRG joint venture: while it's fair to say that the sales to ISRG are not "hugely profitable", they allow NVDQ to leverage the ever-growing ISRG sales/marketing organization. They are providing increasing volume to NVDQ manufacturing and so I surmise help to achieve economies of scale for NVDQ. Also, ISRG is bearing (or sharing?) the cost of conducting a clinical trial and filing the 510k with the FDA for the Biliary indication on Firefly, which can only help NVDQ. And as you said, Firefly's ever-increasing penetration of Robotic procedures provides invaluable exposure and credibility for the technology in all surgical platforms, which hopefully will provide a very profitable "multiplier effect".

      Cheers, and good luck to all NVDQ longs,

      Sentiment: Buy

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