If SYK or others think they could scale the business to $200-250m 1.5-2.5yrs faster than NVDQ - and do so profitably, stands to reason they'd at least consider it vs when the stock was $16-20. Products/ technology and clinical relevance really not the ? based on feedback from those who use them - distribution/sales execution+competence/ability to realize/maintain the 1st mover advantage.....more the question. The warning about slower 1H15 was out there months ago - just turned out to be more of a shortfall than anticipated.
Too much doomsday speculation here. The shoe already dropped on FY15 guidance ($65m - very doable) and we already know Lifecell SPY placements went off a cliff in 4Q and that NVDQ is training sales-force very recently to go to market with SPY combined with tissue-replacement products (which LT will be big). There's every reason to think 2H15 is incredibly robust - as China and Japan intl deals both receive reg approvals in 2Q15.
Recent behavior is def frustrating/disturbing. Not a huge student of technicals, but after yrs above the 200-day MA - that bubble finally burst in Spring 2014 for the 1st time and the stock broke from $17 down to $10.50. Since that break in April '14 NVDQ has struggled to pop its head above the 200-day MA (only once for a few weeks in Dec '14 into the New Year). Even with the SPY/Lifecell win and addl rev as well as the Lifenet DermACELL JV seeling tissue into SPY mkts, seems to be a real 'show me/skeptical attitude' now about the story. Just have to be patient I guess about seeing what the mkt believes 45-55% y/y top-line is worth.
This is a big win for the co. Nobody expected them to resolve this issue so quickly and on very reasonable terms. They will now add about $14m maybe $15m in sales to the P&L next yr. After all the hand-wringing and naysaying...the co looks likes its on a glide path to do somewhere between $80-85m in sales in 2015. Current Street estimate for 2015? A: $70-71m.
Anncmnt after close - did not garner much attention. But Arun is doing a nice job expanding the co's reach these past 2 weeks w/ formal distribution deals in India and now Japan. This will begin to matter in a material way 2H15, 2016-2017.
Whatever this is - its pretty determined selling w/out much regard to price - and it seems to amplify in the post 3pm window (shorts?). Not fun to see it continue into a strong tape. Short thesis at $10.50? - it used to be valuation which I couldn't really argue with - now that has been excised as point of vulnerability as we near 5.-5.5x EV/'15 sales - and by all accounts - the co is likely to deliver on 40% sales growth in 2015. I may be biased - but seems like lunacy at $10.50 to be short into earnings/analyst day when very high prob mgmt. simply reiterates guidance and optimism for 2015.
William Blair claims Serena has 30 sites. Plan is to purchase one or more for all 30 centers over time (they already had 2 units). Commitment is said to be in form of "capital sales." Hopefully this will be a catalyst for the 2 larger natl players with 100+ sites each.
Agreed that it seems a bit thin on the kind of info the co has to know we all are curious about. I thought Healogics was the big kahuna nationally in terms of # of wound care centers that we have been waiting on - but like also to believe that Luna shipments are not going to be dominated by beta-test units and heavily-discounted OEM deals. There's no significance to this coming on the last day of the quarter, right?
Agree with Buzzybob. They needed reg approval - not a dist partner - they made that choice already. Huge fan of Arun and what they are trying to build - but the bottom line: y/y rev trends down for 2-3 quarters in a row, run-rate has fallen below CEO's promised 40%+ y/y target, analysts have had to tweak ests lower. Thus, no surprise - a 15-20x NTM revenue co now becomes a 9-10x NTM story again. If they want to load the bandwagon again with new buyers - they have to prove they can put up +40-50% y/y #s through Luna/PP direct sales and intl sales.
If you believe (as I do - and the mgmt of the co do) that the installed based by 2018 could be 4k+ devices - involved in an annual procedure count in the mid-six figures (Luna and Pinpoint usage are skewing higher already vs SPY), at 65-70%+ GM%, there is every reason to be patient, and not sweat the near-term results or stock gyrations too much - other than to feel they are directionally on the right path as far as education/utilization/ placements. My guess is the Lifecell JV once folded in, will add $15-18m overnight to the annual P&L. And people need to keep in mind - Asian sales in Japan and China - through partners - have not even begun yet (regulatory approvals coming).
Have you ever been in conversation with a child, where the retort or reply to every exchange is: "But why?" or "I know you are but what am I?" The 'don't feed the monkeys at the zoo' maxim was coined for guys like this. Pointless and only spawns more drivel. The stock price will excommunicate him soon enough. Then when its hit $8.50-9.00 he can reenter w/ new alias and start parroting the same b.s.all over again w/ no accountability for having gotten it wrong.
Agree with these comments. Aside from just profit taking, look at the 1Q14 13F filings: 8-9m shares in new instl/hedge fund shareholders there who bought in 1Q14 or at least appear to have done so. Marsico, Waddell, New Century, Visium, Janus etc etc - 1Q14 began at $16.30 p/s and ended b/w $22-23, so by definition you have a lot of newbies who bought right into the buzz saw of the post-Sages/post 1Q14 selloff - combined with those who bought the $16 deal last yr also underwater. And then as Endo points out, the 1st Q call raised a lot of ?s about the Lifecell JV, slower Firefly placements, the initial sales ramp for Luna/Pinpoint (which by all accounts is going great YTD). 2Q results are the next big datapoint which seems like a long wait - but I for one am not convinced the fundamental story has changed at all, just mkt sentiment about what it should be worth today. If they manage to buy Lifecell out of the last 12 mos of that JV for a reasonable price - then consolidate another $18-19m in revenue from than JV on the P&L, and control SPY distribution, that would be a nice positive as well.
Agreed, looking forward to results from that study as well as 9 other studies underway - esp in endometriosis. For now, seems like we are stuck in a period of consolidating gains of last few mos, digesting the after effects of recent equity sold at $16.75, and straddling the 50-day MA - w/ no correlation with broad mkt or convincing volumes. But here's to a strong '14 and hopefully some color on taking back the other 50% of the Lifecell JV - which expires in 18 mos.
So, are you suggesting we don't know if the co's tissue sampling contains a bias in it? Sounds like you are arguing that if the tissue sampling itself was not randomized, and proved as such, the FDA will not accept it? Is the fact that irinotecan has been used for yrs and yrs not a factor in worrying somewhat less about the cardiotox issue you raise re: Iclusig? It is not exactly an unknown agent - just as paclitaxel was not. I am not wearing rose-colored glasses here, merely trying to handicap odds like everyone else - fully aware how unpredictable this area can be, however, the sample collection issue should be something the co could/should disclose if asked.
Think you already know the answer to this question. Abraxane posted +1.8 mos of PFS improvement over control - in a 1L trial in PC (less sick) - AND this was in combination with Gemzar. Abraxane is considered a 'shoe-in' for approval and to be standard of care in front line treatment for PC now. So for 398 anything that's +1.5 mos in monotherapy and +3.0 mos in combo - or better - in a sicker population....well....you can do the math. None of that is to say there isn't still risk.
Claiming that this administration's "policies" (Obamacare, regulatory overreach/fines, publicly vilifying the private sector, advocating wealth redistribution instead of growth overall, and now a 2.5% tax on NVDQ's device sales) have led to the recovery is like the rooster who cockadoodles in the morning and then takes credit for making the sun rise. Yes, the debt problem is b/c of the GOP protecting tax cheats! So simple. If you don't like political stuff creeping in, than don't perpetuate it with a political rant.
If we are talking about the next 18 mos, yes, seems silly. On a much long-term basis - 5-7+ yrs from now, no, $100, or a $15B+ valuation is not 'silly' I agree, when you consider that MM-121 could be a Herceptin-like product and 398 could be the beginning of a nano-liposomal delivery platform similar to Abraxane. Then there's MM-111, MM-151, MM-302 etc. For now, I will welcome $10+. :-) But yes, ONXX comparison is fair, as is heck, CLVS - a $1.6B mkt cap co just on P-1/2 results for a NSCLC drug.
Agreed. This talk of $100+ is silly. That said, if the MM-398 trial reads out in April/May as +2.0 mos progression free survival (PFS) vs the control arm - it will be double digits ($10+) before you can sneeze. Why? Go back and look at CELG's purchase of Abraxis Bio for $2.9B 2 yrs ago - at that time Abraxane was approved for metastatic breast cancer only. CELG added $5B in mkt cap when Abraxane showed +1.8 mos in 1st line pancreatic in Jan 2013. This is 2nd line (sicker patients), if it works, the assumption will be it can work in 1st line setting as well. Risk? Yes, but its an easy leap to double digits if they have an approvable product for PC.