By: izzmeister $$$
03 Oct 2002, 01:42 AM EDT Msg. 20483 of 20511
This is my take on recent price action and what we can expect for the next 1-2 years.
The company has made a strategic decision to base its near and intermediate future on the treatment of CHF. Indeed a friend of mine who attended the last major cardiology meeting in Atlanta and visited the VASO booth commented to me that the entire focus of the company has been geared toward the treatment of CHF. Furthermore, as I recall, Mickey confirmed this in one of the recent conference calls by at least implying that as regards the treatment of CAD they would not go up against the interventional cardiologists and angioplasty.
Obviously, given this decision, the PEECH trial becomes crucial and represents a make or break event for the company. Mickey basically said it all in the press release on the symposium wherein he states:
"The PEECH trial is of great importance to the Company, and should confirm the benefits of EECP for heart failure patients that have been observed to date in smaller studies and lead to more widespread acceptance and adoption of the therapy in clinical practice,".
Additionally, I believe the company has stated that they will not seek medicare approval until the PEECH trial is completed.
Now let us consider the PEECH trial. Let us assume that they will complete patient enrollment in 6 months. Since treatments take 7 weeks, the treatment phase of the trial will not be completed for approximately 8 months. I believe there is a 6 month followup period afterwhich patients are reevaluated to determine the durarability of response. Now we are up to 14 months. When the data collecting phase of the trial is over, the data must be evaluated, this will probably take a few months. Now, let us assume that the results of the PEECH trial are successful beyond Mickey's wildest dreams and that the data shows that EECP is the hands down best treatment presently available for CHF. The company will probably write up the trial for publication in a major journal. Writing the article will take months. After submission of the article it will take months before it is accepted for publication. And even after it is accepted it will take months before it actually appears in print. As I stated in a prior post, most major journals forbid the authors from pre-publicizing the results of their research prior to the actual publication in the journal. Thus under the best of circumstances we should not expect to hear any substantive news about the results of the PEECH trial for at least 2 years. ( Though they may be able to transmit positive findings to the FDA and Medicare.)
Naturally if the PEECH trial results are ambiguous or if enrollment continues at what I percieve to be an agonizingly slow pace the above scenario would have to be modified accordingly.
During that 2 year interim, in the absence of any significant catalyst, revenues and profits will be hard pressed. This will result in and in fact is resulting in downward pressure on the stock price.
Just my 2 cents.
(Voluntary Disclosure: Position- Long; ST Rating- Hold; LT Rating- Buy)
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