In the Feb 10, 2016 10-Q filing (exhibit 10.6), , this allows omission of certain specific details associated with the Intuitive Surgical agreement mainly about development cost rates, royalty payments and continuation criteria. Nothing really suspicious here.
There were a couple of new items revealed during the talk.
Break even is likely to occur late in 2017.
The Stryker fluorescence device is less capable than Pinpoint in that fluorescent images cannot be overlaid with visible light images. In this, it is more like Firefly and the surgeon must manually flip between the two views. This is a major disadvantage when doing high precision surgery such as lap. cholecystectomy, where being able to see leaks and visualize the placement bile and cystic ducts is critical.
While Arun said that this limitation may not be quite so bad for Firefly due to its better imaging, he allowed that Piinpoint is the next generation machine in comparison, but he indicated that questions about the future of Firefly should be directed to Intuitive.
Maybe because up till now, they have been operating as a monopoly in the robotic world, and when they brought out the XI, they still had a cheap, medium term contract with Novadaq still in effect and no impetus make it any better than economics dictated. With competition on the horizon they may have decided now was time to sew up an operational advantage.
On June 21, Novadaq's Roger Deck presented at JMP in a fireside chat format. He highlighted two technical advantages that Novadaq enjoys over the competition.
First, he expounded some of the advantages of Demacell over market leader Alloderm. A soon-to-be published Georgetown study on breast reconstruction will show a decreased time requirement for drainage tube placement. Also, Dermacell needs less handling during implant. The surgeon opens the package and directly places the implant. Whereas, Alloderm requires rinsing before implantation and there is a concern that if not done adequately the implant may not perform properly.
With regards to Pinpoint, the functionality of new 5mm endoscope (previously said to be necessary for 40% of procedures) may not be easily replicated by others (Stryker). At 5mm, due to the smaller cross-sectionand the resulting lower light levels (both on transmission and reception) and Pinpoints's better imaging capability, the superiority of Pinpoint's images against the competition will be "dramatic". (A head-to-head comparison of devices seems to favor Pinpoint, yet again.)
TransEnterix seemed to be the closest threat, but I was also thinking about Medtronic/Covidien and Google/J&J (oh, I forgot- and Titan). At least one competitor will emerge in the OR within three or four years, we'll see just how viable their machines are.
At 35% growth rate and all other things being equal, that translates to about 1.25 years from the end of 2015. Given a traditional weak Q1, I would estimate that they estimate break even at Q2 or Q3 2017. Your mileage may vary.
PS- There is currently an installed base of 1700+ Firefly systems. Even a modest upgrade charge ($20,000, at the current contract rate) on 25% of these systems would net $8.5M. And I would be surprised if a new contract didn't at least double the current rate. Last I heard Firefly only contributed about 5% to Novadaq's revenue, 10% would make it significant.
Starting tomorrow (Bloom Burton at 10:30 ET) Novadaq is presenting in a series of three conferences in May. Deutsche Bank is on the 5th, and UBS, on the 24th. Given the small amount of new information revealed recently in the last two and the earnings conference call, I'm at a loss as to why they need to attend so many.
I couldn't find a study numbered NCT0156033, typo? Pillar II (great results) has been published, press release Oct. 2, 2014. I guess the company has the option to share or not share the data at clinicaltrials. What is IM?