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I am replying to myself,and I hope that I don't sound like a broken record,but I have been speaking to people familiar with the FDA process at public companies,who have filed many 510ks and have been throught this process many times.My slant is the following.CCSI filed their responses on 5/27 and the reviewers have had 7 weeks to review the application.There have been no further questions,so the feeling is that we are in the final stages of approval.Many people ask me what will happen when we get approval and I believe that there are excellent examples of some issues that have recieved approval recently,and some that havent gotten it yet, but are flying.PLSIA was $6 3/4 the day before approval and their stock was up 138%in4 days,AVIR announced 2 days ago a flu nasal spray for children that will be filed in 1998 and hopes to be approved in 1999 and the stock was up 86% in 2 days and approval is 2 years away,but it deals with children and was on all the news broadcasts last night,and on CNBC yesterday and 3 times today.CLSR is awaiting approval on a new suture and stock has risen over 50% in recent weeks.The point is that when we get approval this stock is going to get a lot of interest from people who have done their due dilligence,but can't or won't buy it until it is approved.My comments are certainly biased as I have so much riding on this stock,but the potential is multiples from here,so one has to make that bet when an idea like this comes along.I have a fairly good idea where a lot of this stock is,and I can assure you that many of these positions will be added to between 25%-50%,because I will control the orders.Words are cheap,good performance is dear,but just give me the chance upon approval.Let me give you a hypothetical situation,and call me an idiot,but think about it for a minute.Approval comes some day.A non-invasive device for infants.HOw many people would that appeal to?EVERY NEW MOTHER AND FATHER,we will see it on the news,in the papers, in financial periodicals,then some smart reporter(s)look further and say,look at what else this device can do,it can give you exact skin color for cosmetics,match caps accurately for dentists,match paints,etc.The earnings models are going to be a joke.The expectation is always greater than the realization.I look at the market which I can define, the infant market.Hospital market could be $250mm,Home Care could be $400mm,peditrician market could be $20mm+,so when you add all these up you come to the realization that I am smoking pot,but my friends those are the numbers.Now lets say we get 10% of those markets over a 12 month time period.We could be looking at earnings of $1.50 conservatively in the US alone,no EC,Japan,South America,no cosmetic,no dental.Give it a 25x-30x multiple and we have a $37-$45 stock with 10% of market,no licensing,distribution or royalties.These are recurring numbers and should grow.Sorry to be so long winded. |
