What is SA is thinking about today? BioGlue's Future, that's what.
Today, MDCO announced it has acquired Tenaxis. Tenaxis has a product called ArterX. If you go to the Tenaxis Medical website, you will see it is dispersed using a syringe similar to the one BioGlue uses. Remember that BioGlue is now off patent, at least I think so.
Here's the deal. The only cost center that CRY seems to have that makes any money is the BioGlue cost center. BioGlue has gross margins of something like 85%. So for every dollar lost, or not gotten, CRY loses about 55 cents of net income ($0.85 less taxes of around $0.30). So for every dollar lost, it seems that CRY's after tax income takes a $0.55 hit. The real question is whether ArterX will now "gnaw away" at CRY's US BioGlue sales. I have know way of knowing, but I think CRY's financial statements 18 months from now will tell us a lot about this story. So some added uncertainty for the near future it would seem. Also, it seems to me that BioGlue is CRY's life blood, and they may start to have some pretty direct competition on the street with the good old BioGlue product. Of course SA will say BioGlue is far better than ArterX...that he is not worried...lota lota lota. Maybe, maybe not, but in 18 to 24 months we won't need SA to tell us, the financial statements will likely speak for themselves.
What do you think SA is thinking about today? BioGlue's future profitability and cash flow, that's what.
Just my own thinking, nothing more. Do your own due diligence.