Chromatics Color Sciences International. Inc; CCSI Message Board

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Biotech / Medical : Chromatics Color Sciences International. Inc; CCSI

CCSI 29.77

+3.7%

Nov 5 3:59 PM EST

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To: JanyBlueEyes who wrote (5429)	6/24/1999 8:19:00 AM
From: Bill Wexler	Read Replies (1) of 5736

CCSI gross overvaluation revealed. CCSI stock promoters have made much of Chromatic's recent distribution deal with Datex-Ohmeda, excitedly pointing out the 60-40 split (lowering to 50-50 split after two years) of the gross revenues from the sale of Chromatics' generic colorimeter device. Not surprisingly, CCSI failed to disclose any dollar amounts in its most recent 8-K. CCSI's distribution arrangement is in fact a horrendously bad deal for the company, and it smacks of desperation on the part of CCSI management to convince any legitimate distributor to take on its product. The reason for this is simple, the real market size for bilirubinometers in the U.S. amounts to no more than a few million dollars and a distributor would no doubt ask for a significant percentage of gross before committing any resources towards a tiny niche market. Ohmeda Medical was acquired recently by the Finnish Instrumentarium corporation for $490 million. At the time of the acquisition, Ohmeda had sales of approximately $412 million for FY 97. The current market capitalization for instrumentarium is roughly $900 million, with trailing twelve month sales of about $700,000,000 - so both companies are valued at approximately 1.2x sales. It would stand to reason from the fraudulent misrepresentations made by CCSI management and its bevy of paid promoters about the "massive" market for bilirubin tests, that Instrumentarium shareholders would be overjoyed at the thought of lopping off 50% of CCSI revenue stream. On the contrary, the CCSI deal did not even generate a passing glance. On a fully-diluted basis, Chromatics market capitalization currently stands at a whopping $200 million. Chromatics has not delivered a single penny in earnings over the course of its 15 year existence.

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