As a reference point, ISRG's margins run from 25% to 28% but they don't have to size and manufacture their products based on patient criteria. Our margins will be lower because our costs to produce each scaffold will be higher.
This isn't like a drug company that can run at 40-50% Gross to Net because they can achieve economies of scale on the production end. Mass production of the NSS just isn't feasible.
$9 Million isn't even close to what they will need for full commercialization; I 'm figuring that the warrants will get them from the end of the Safety Study to around the kick-off of the Pivotal Study. We burn around $3 to $4 Million a Quarter now with NSS being the only product in the pipeline.
I'm assuming a doubling of shares for purposes of outyear estimates because my thinking is that we will see more than one dilution prior to full commercialization, or else we will land a partner who will alleviate those costs in return for the lion's share of the net. NVIV is running on very low overhead right now, as they should be, but companies like this live and die by their R&D and that will be expensive.
First of all you NEVER price in "hype" - you simply cannot associate that with value. Secondly, 10% of the Chronic Market is huge. Remember that many people won't be candidates for this procedure because of age, general condition of health or other factors all of which tend to decline the longer they have been injured.
I went with the doubling of shares because the company is going to need a huge infusion of capital to get through the Pivotal Studies and ramp up to full commercialization. And a partnership will be worse, probably resulting in a revenue stream of only 30 to 40% of Net Sales (although they would "front" a lot of the costs of commercialization).
All told I think my estimates are reasonable.
First of all we'll be lucky to capture 30% of the Acute SCI Market. At this point we are only going to be an option for complete injuries and even among those there are many individuals who will simply not be good candidates. At best (based on a $100K per unit price) we're looking at $400 Million in gross sales. Once COP/COGS/SG&A get pulled out you're looking at maybe $20K per unit that can be allocated to Earnings on a non-GAAP basis. That works out to about $80 Million.
The company will need to raise capital sometime prior to 2016. That's either going to happen through a partnership or a Secondary. Either way that will dilute earnings significantly - my estimate is that either will cut earnings in half. Projecting a share count of 190,000,000 gives a non-GAAP EPS of about $0.42 per Share. Multiply that by a P/E of 30 and you're at $12.63 per Share for Acute SCI.
My calculations are that we will capture about 10% of the Chronic market or roughly 30K patients total - which could get us somewhere from the high teens to mid-twenties in terms of Share Price but I wouldn't try to count those chickens at all until 2018 at the earliest. And ex-US Sales are problematic, and I wouldn't even start to think about that yet.
Now, I tend to be pretty conservative with these things but your numbers are just far too high. That's the problem with "Bar Math" - too many distractions. Friends shouldn't let friends calculate drunk.
Monday 12/22: Jingle Bells, Jingle Bells, Jingle all the way; you really want to keep an eye on $13.75 today....
We're showing very low Volume this morning on Bullish Money Flow and low Volume days can be tricky. If Volume swoops in based on price movement we could go into Breakout mode. I'm showing the recommended Stop for New Short Positions well over $14.00 so there's room to run.
Ho Ho Ho!!!!
It's not "my logic". Companies have often responded to false statements of fact reported in the press and in social media. And it's not an issue where we're talking about matters of opinion, but only in the case of misrepresentation of fact. They are under no obligation to do so unless there is a reasonable concern for stakeholder interests and that's a matter for their legal representation to determine.
Well, even without the report this weekend it's been pretty clear that Jordan has been making progress but the company has stuck to their guns on protecting his privacy. They are under no obligation to respond to media reports in general.
If the report of improvement in Jordan's condition were not true an entirely different set of responsibilities would come into play and in my opinion the company would risk legal issues by not denying the story. My take on this is that "no news is good news". If the report is true, but the progress is within expected parameters then they are still bound by patient confidentiality and are within the guidelines expressed in Perrin's statement concerning patient updates. If the report is not true then they could be accused of a breach of fiduciary responsibility if they don't respond since there is an issue of fact involved. They have a fine line to walk here.
Investors have a "right to know" very little really, particularly when it comes to a situation where issues of confidentiality are concerned. In this case our "right to know" is bounded pretty closely by the patient's rights to confidentiality concerning his treatment for a severe medical condition.
Far fewer than he used to. There's a pretty good article on Seeking Alpha that discusses that "The Back Story Behind InVivo Therapeutics Sell Off". Since Frank is no longer an Officer or Beneficial Owner there's no real way to accurately track how many shares he still has, but assuming he is still selling at or near the rate he was previously he should be done sometime in Q1.
Mac you can't possibly mean that the acceptable standard for discussion and debate on these boards be any higher than "My Dad can beat up your Dad", do you? That's positively un-American....
awesome, it's my experience that the vast majority of people only hear what they want to hear, and in fact will go far, far out of their way to find information that confirms their preconceptions or alternately to avoid information that disputes them. That's Confirmation Bias and it's probably lost more folks their hard-earned money than any other single error in investing.
I think in this case that there is a fair body of circumstantial evidence that the articles in question are legitimate. You can agree or disagree as you like and it won't effect me either way. There is a possibility (in my opinion a very slim possibility) that those of you who are arguing that there is malfeasance afoot could be right.
Mostly what we've seen here yesterday and today has been an exploration of the issues surrounding this topic, and that's good. There have been some insults and name-calling and behavior more suited to a kindergarten playground than a stock message board, and that's regrettable but seemingly unavoidable.
One thing is certain here: the Markets will open tomorrow, time will pass and all the stuff we've been talking about all weekend will be settled one way or the other.
The reason they are "stingy" with their updates is out of a concern for Patient Confidentiality, one of the FDA's big hot buttons (and if I were guessing the single biggest issue they had with previous management, but that's just a guess). What brings this into question is that IF this article is false and they say nothing there's a case to be made that they have breached legal obligations to shareholders in a situation where they are already hip-deep in legal issues.
So my take is if they do not PR this it will indicate that the article is substantially accurate. If they confirm it they will have closed the loop with Jordan Fallis and the FDA. If they deny it they aren't breaching Patient Confidentiality since saying that an event claimed by a third party has not happened is not the same as disclosing that it has.
Yes it is one of the selection criteria. The study requires that the injury be AIS A traumatic spinal cord injury and specifically excludes incomplete injury.
That's a very valid point. Personally I think that some people have been wrapped around the axle so many times by this stock that they're just plain gun-shy.
There have been other cases in which companies responded to misrepresentations of fact (if that's what this is, which I doubt). There was a forged "tweet" against Sarepta Therapeutics concerning a data release in their P2 DMD Trial that they responded to. Apple's done it a time or two over issues of falsified data concerning their Chinese manufacturing subcontractor. There have been others.
The issue arises when you are talking about a representation of "fact" as opposed to an expression of opinion. Failing to respond to a misrepresentation of fact can be interpreted as an abrogation of fiduciary responsibility; ignoring expressed negative opinions generally isn't (which is why people like Adam Feurstein can stay in business since opinion is 90% of what they deal in).
This is an interesting situation because the company has a potential obligation to the shareholders (if the report is false) but also has an obligation to the confidentiality of the Study Patient (if it is true). If they go by the letter of those related obligations it will quite literally be a case of "no news is good news".
The Scaffold creates a lattice of sorts for natural healing to occur, KC, as well as reducing secondary injury due to encystment and scarring. Since it's not an active device you can't point to it as a cause, but simply as a factor (together with the patient's age and overall physical condition) in the process. What you are really looking at here is the overall progression of recovery compared to individuals with similar injuries who have not received the Scaffold implant.
Determining that will not happen with Jordan. You can't take a single patient receiving a treatment and say "Look, this one thing made him better!" This is a very positive sign, of course, and scans or ultrasounds that show the intended effect will support it, but they won't "prove" it.