Hi James,
Bear Stearns has a fairly good report (18 pages). Get that report, it helps some.
Some tidbits: There are 10.2 million shares plus 1.2 million options that are exerciseable when the company turns profitable. (11.4 million shares total). In 1997, they guess that CH will lose around 0.40 on sales of around 3.5 million. 1998, earn 0.21 on sales of 18 million.
1999. earn 0.90 on sales of 50 million. From a graph, ( in the year 2000) it looks like they guess that the company will have sales of 100 million. (The profit should be progressively higher since margins are higher on the sales of the disposible electrodes used for alternans measurements.) Potential market in the US of around 500 million, and worldwide of 1 billion/year.
CH is also working on cardiac electrical imaging (CEI). With approval hoped for by 1999. sales are expected to be reflected by that time. With 25 to 50 % penetration, the market is guessed at 860 million/year.
The CH-2000 is for measuring for alternans waves that are an believed to be an excellent predictor of electrical instability (at least several phase 3 studies for use indication will be released in a few months, maybe 2 months). (The already have approval for the instrument, but can't claim anything definite about alternans). These pending studies will be important and if poor, the stock will have some trouble. (Let's hope it's not another lidak).
CEI is for detecting infarction and cornary artery disease. It's a way off.
They seem to have some good staff including management. I asked a cardiologist about this technology, and he has not heard of it. I asked an old family practice doc., and he was familiar with it. Go figure. When I talked with Hennessey (CFO) about a cardiologist not knowing, he was not surprised. Outside the research centers doing the work, few are aware of this. If you check the medical literature, you will find relatively little about this subject. It does date back to the 1950s. There are several recent small pilot studies that seem to show that alternans is a good predictor of electrical instability, especially durinn an elevated heart rate (bicycle, treadmill). These seem to back up the 1994 NEJM article. |
