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Novadaq Technologies Inc. Message Board

andersongordon 54 posts  |  Last Activity: Jul 22, 2014 10:27 AM Member since: Jul 11, 2011
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  • Reply to

    How good are our products?

    by e11ndofwar May 8, 2014 12:10 PM
    andersongordon@ymail.com andersongordon May 9, 2014 9:30 AM Flag

    You are correct on this Endo. The deal is done and the negotiations complete. The fact that Arun kept saying over and over in the CC, PINPOINT and LUNA are what I am focusing on...They are our future...etc. They may have gotten a better deal for XI and PINPOINT, but since PINPOINT 2 was not yet out and not yet FDA approved, I suspect the XI will have the second generation technology and not the new CSF (color segmented fluorescence). Arun hinted at what is in the works when responding to RBC question...'We are spending a lot on R&D and where I see our technology in the future is...the physician will type in the kind of surgery (application) he is doing and the machine will highlight with colors the areas (organs etc) of interest and marginalize all non-relavant parts". KOOL--FAR OUT--GROOVY (I'm dating myself here).

    GSA

  • Reply to

    stock momentum vs.company momentum

    by e11ndofwar May 7, 2014 8:04 PM
    andersongordon@ymail.com andersongordon May 7, 2014 9:48 PM Flag

    Ditto!
    GSA

  • Reply to

    Analysis of Q1 2014 NVDQ Results

    by andersongordon May 7, 2014 7:33 AM
    andersongordon@ymail.com andersongordon May 7, 2014 8:21 AM Flag

    You are correct. I read it wrong and went back and redid my analysis. They placed 61 (Q1 14) up from 42 (Q4 13) a 45% sequential increase. This is good news but not enough to move the needle on my price to the $20 range of Senario 2). With this corrected analysis I estimate around $17 for a fair price. I was too quick on the trigger Endo. Thanks for catching my error...I too was on to it an was recalculating when you response came up. Check my boards. Keep me on my toes.

    Yours
    GSA

  • andersongordon@ymail.com by andersongordon May 7, 2014 7:33 AM Flag

    Here are my estimates. April 29, 2014

    1) 10-20% Very disappointing earnings, and ISRG correlation is very strong and continues.
    ($10.1 Million revenue, $(-0.09) EPS, 39% YOY revenue growth)
    Price drops to $14-16 range
    2) 20-80% A mixture of the theoretical adoption curve and the impact of exogenous forces.
    ($11.5 Million revenue, $(-0.07) EPS, 58% YOY revenue growth)
    Price rebounds to $16-$20 range
    3) 80%-100% My theoretical model for adoption, all the exogenous influences are minor
    ($12.8 Million revenue, $(-0.04) EPS, 76% YOY revenue growth).
    Price returns to previous high and grows ~50% on an annual basis $20-$24 plus

    The Results are in:
    Revenue $10.3, $(-.08) EPS, 41% YOY revenue growth.
    Price should be just above $16 range---Closed yesterday at $16.50 (Fairly priced-based on numbers)

    When you dig below the numbers, what we see is more of the PINPOINT/LUNA systems were "sales" to hospitals and less were "rented/trial" placements. This would indicate that the hospitals see real returns and are willing to purchase "Capital Equipment" that has high cash flow and earnings potential for them. Consumables (kits) revenue was "flat" caused by the increase of machine purchases and the savings that come from the lower kit price for owners vs renters. That is a good thing and will wash out once most of the systems are converted. The real important metrics to watch are procedures 6600 "driven by a sequential 23% increase over Q4 2013 and the placement of 175 new systems of which 139 were PINPOINT and LUNA. This is 139 versus 42 for Q4 and vs my models estimate of 76. This is a blowout number and bodes very well for the future. It moves me from Scenario 2) towards even into Scenario 3)... I feel a price of ~$20 is warranted by these results.

    We shall see.

    GSA

  • andersongordon@ymail.com andersongordon May 2, 2014 9:12 AM Flag

    I would guess that GS already has amassed at least 1.5-2 million shares...before the announcement. There should be a lot of short covering today but not GS purchases. My estimate is they will only be buying in the market less than 100k-200k today.

    With excellent cash flow even in the "bad" results of Q1, they will authorize another $1 Billion as soon as they have already purchased the last of this current Accelerated Share Repurchase. They don't want to drive up the price any more than they have until they are finished with the ASR.

    GSA

  • Dr Hausen:
    "As we build a solid customer base and begin to see revenue growth we plan to add three to four sales representatives per quarter. For manufacturing with the product performing low to daily, we will work to increase our weekly production capacity to 250 devices and thousand cartridges per week by the end of 2014 and drive our cartridge gross margins to more than 75%."

    Moving to Japan, our partner Century Medical continues to work with the Ministry of Health to enable potential market clearance of the XCHANGE 30 in the significant market. Century anticipates market clearance within this calendar year. Our product development we are working to expand the MicroCutter product line so that this device can be used in additional surgical procedures moving forward.

    We were developing XCHANGE30 with a short shaft handle, which we believe will be ideal for procedures in more confined spaces. We expect to introduce the short shaft handle in the third quarter of calendar year 2014. We’re also working on the development of XCHANGE 45, which is designed with an eight-millimeter shaft. Similar to the XCHANGE 30 this new product was also articulated up to approximately 80 degrees in either direction.

    We see both the reduced size and increased articulation to be clearly differentiating features when compared to existing products. In addition, XCHANGE 45 works with a larger green cartridge necessarily to staple bigger tissue like that of the rectum or stomach. Pending PDA clearance from XCHANGE 45 will expand the total available market for the MicroCutter line.

    Today we have working prototypes of the XCHANGE 45 and plan to begin animal studies by the end of this summer. Once we complete animal studies we believe we can begin using the product in humans by the end of the calendar year 2014."

    As said in one of my favorite movies...."That will do Pig...That will do."

    GSA

  • In summary, this was the best Cardica CC I have listened to...period.
    Dr Hausen:
    "we continue to hear from surgeons that this device is facilitating existing procedures and aiding new procedures in a manner not feasible with conventional surgical staplers."

    "In most hospitals this process takes approximately 30 to 90 days. Foreign FDA clearance of the white cartridge along with the change in the tube of the cartridge Cardica immediately started working with surgeon advocate and hospital system to initiate this process.

    As of March 31, five VACs have approved the XCHANGE30 for product evaluation and following successful clinical application some of these have already resulted in purchases of the MicroCutter. Importantly, we have initiated the process in numerous additional hospitals during the last month and we expect to initiate more in the future.

    Taking the step back, we believe there is a very large market opportunity for the MicroCutter. There are approximately 2.5 million surgical procedures in the United States annually focusing on our current indications for youth, appendicitis accounts for 320,000 procedures each year. A variety of other gastrointestinal procedures where the use of the MicroCutter could be considered beneficial, account for at least another 150,000 to 300,000 procedures.

    In addition, there is a large number of additional pediatric surgeries annually. Cardica intends to work with pediatric surgeons as they see the size advantage of the microcutter for the small patients."

    "Turning to operations, currently we’ve two MicroCutter sales representatives in addition to our Vice President and the Sales and the marketing calling on U.S physicians daily. In addition, during the current quarter we plan to train our three cardiac surgical representatives on the MicroCutter to expand our reach into their current sales regions."

    See Part 2 continuation

    GSA

  • Reply to

    April message from president

    by nisku98 Apr 30, 2014 8:30 PM
    andersongordon@ymail.com andersongordon May 1, 2014 11:08 AM Flag

    Something? Good....is it good or bad?

    GSA

  • andersongordon@ymail.com andersongordon Apr 30, 2014 7:43 AM Flag

    This is the best response to this inquiry Bio. I see the only solution to an unmet need in the Pediatric surgery field linked to this new ~25% cross sectional (5mm vs 12mm---Pi*R Squared) minimally invasive surgery enabler. A hospital system like Philadelphia's CHOP (Childrens Hospital of Philadelphia) is major and preforms thousands of surgeries per year that would benefit from the new Cardica products. A multiyear GPO of $30 million is not unimaginable. Given a substantial pricing incentive (30% above cost?) could be structured over 5 years----all hypothetical----that would mean ~$300 per kit of tool and staples. 20,000 kits at $300@ would amount to the $30 million 5 year GPO.

    Even if this type of agreement does not currently exist, it would be a great tactical approach to pursue. If a CHOP signed an agreement, the next major network agreement would have a precedent to mimic and would lend credibility to Cardica as a long term going concern and supplier of best in class medical technology needed in the hospitals arsenal for surgery.

    GSA

  • That was an interesting rumor. Even if Cardica was negotiating a long term contract of such magnitude would be a real boon to CRDC. Has anyone looked into the rumor, had any reason to suspect it was just hype or any comment on such a deal?

    GSA

  • Reply to

    what worries me

    by e11ndofwar Apr 29, 2014 12:53 PM
    andersongordon@ymail.com andersongordon Apr 29, 2014 4:19 PM Flag

    Giraff, I wondered who and why anyone would give a thumbs down to a strategic and tactical analysis. I expect differences of opinions and I know sometimes I become blinded by my own biases but....Thanks for the apology...would love to hear your thoughts as to what will happen...other opinions sharpen my thinking.

    GSA

  • Reply to

    testing

    by e11ndofwar Apr 28, 2014 7:02 PM
    andersongordon@ymail.com andersongordon Apr 29, 2014 4:13 PM Flag

    I factored out the stock price impact on earnings. The numbers I listed are for non-stock, non-one time events like disposition of assets or costs associated with the purchase of the new Swiss company. Speaking of which I would love to have a handle on what they intend to do with the Doppler technology. One possibility would be a stand alone product to be sold in addition to Luna and Pinpoint. Another possibility is to incorporate it into Luna and Pinpoint as a low cost non-invasive first look at profusion to help guide whether the deeper fluorescent technology should or should not be used. A third is to do both. It would be nice to hear Arun comment on it but I suspect this will be kept under wraps until it is launched.

    GSA

  • Reply to

    testing

    by e11ndofwar Apr 28, 2014 7:02 PM
    andersongordon@ymail.com andersongordon Apr 29, 2014 3:19 PM Flag

    Same feeling here. Waitfor take a look at my three scenarios and result under Endo's article. The first scenario covers the exogenous (outside NVDQs control) forces driving the demand for NVDQ. Until they can show they are able to overcome these dilatory forces the price will drop as buyers will have no reason to step in.

    It is painful watching a powerful new technology have its teeth kicked in for nothing it did.

    I too have a 5-10 year investment horizon for Novadaq and thought its parabolic move to $24 was out of line, but a 40% hair cut is ....disheartening.

    GSA

  • Reply to

    what worries me

    by e11ndofwar Apr 29, 2014 12:53 PM
    andersongordon@ymail.com andersongordon Apr 29, 2014 1:30 PM Flag

    Endo, this is a very obtuse earnings quarter. If, and this is the biggest issue I see for this quarter, if Obamacare had "frozen" hospital capital spending then Novadaq will be hurt and hurt bad. If the ratio of "sales" to "rents" diminishes or even stays the same, the 1st quarter will be hurt. The two are linked. The real marketing impact is not "scheduled" to hit until the end of the second, and into the 3rd quarter. Arun has stated first that "six months or more" will be required to train and bring up to speed his new hired marketing members. Later and most recent I heard "nine months"...used in his discussions. I didn't hear any "horrible" drop off from GE's medical division, but that may not be an effective canary in the coal mine. ISRG also has its issues that have removed it from being an effective canary: Introduction of a whole new surgical machine and new instruments and abilities muddying the purchasing decisions of hospitals, the endless drip, drip, drip of the news media and law suite, the ACA, and in general deeper penetration into the adoption curve natural growth deceleration.

    I too am puzzled. Here are my estimates.

    1) 10-20% Very disappointing earnings, and ISRG correlation is very strong and continues.
    ($10.1 Million revenue, $(-0.09) EPS, 39% YOY revenue growth)
    Price drops to $14-16 range
    2) 20-80% A mixture of the theoretical adoption curve and the impact of exogenous forces.
    ($11.5 Million revenue, $(-0.07) EPS, 58% YOY revenue growth)
    Price rebounds to $16-$20 range
    3) 80%-100% My theoretical model for adoption, all the exogenous influences are minor
    ($12.8 Million revenue, $(-0.04) EPS, 76% YOY revenue growth).
    Price returns to previous high and grows ~50% on an annual basis $20-$24 plus

    These may be high, but they are the best I can muster...unbiased?

    GSA

NVDQ
16.76-0.14(-0.83%)Jul 25 4:00 PMEDT

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