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Biotech / Medical : BSD Medical (Long Term Investment Oriented)

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From: pleonastic	4/29/2013 11:10:43 AM
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The following is from a discussion on the IV MB between 7As and boraymon (AKA pleonastic) -- regarding the new Terumo marketing agreement (covering roughly half of the entire world; 100 countries). Terumo is a $5 billion/yr company that is expanding its Interventional Oncology sales – which market the MTX-180 addresses with an acknowledged (by leading IO doctors) breakthrough product. Regarding this agreement, BSD Medical says the market addressed is about $1 billion (in keeping with the entire world market of about $2.3 billion). 7As quotes CEO Wolcott: "The distribution partner is required to give us annual forecast. The first three months that they give us are binding. There is no upfront payment, but we have a very clear path forward with regards to what the sales line will be so we can do very careful planning. There will be a cash outlay to fill that pipeline, but it's a very attractive number with regard to sales and the profitability of those sales......100 countries is a very wide ranging territory and this company has a lot of direct sales horsepower to really deliver on this agreement. So, that will be a little cash paying in the beginning, but it will be a very profitable agreement for us." 7As: >It is pretty clear from this that the capital raise done on Apr 9th was to fill this pipeline.< Pleo: >>Yes, and I believe the immediately announced BSDM stock offering was probably a pre-arranged action as BSD M’s part of some terms of the Terumo contract. Each party evidently has commitments re the “kick-off”: The binding first-three-months forecast from Terumo and the commitment of BSD M. to raise additional capital to insure the necessary financial strength, above other business needs. << Wolcott: "Revenues from our agreement with Terumo Europe NV should commence by the end of the third quarter of our fiscal year 2013..." [that is, by May 30th] 7As: >P.S. Wouldn't one think that in order to market to 100 countries, Terumo would need at least ONE MicroThermX in each country to demonstrate it? < Pleo: >>I think so – eventually. But, Terumo might well not try to introduce the MTX-180 into all those countries at the same time. The various countries might not all be at the same stage re expanding Interventional Oncology practice.<< Highlights re the subject marketing agreement (bsdmedical.com): “BSD Medical Announces Exclusive Multi-Million Dollar Distribution Agreement with Terumo Europe NV for MicroThermX® Microwave Cancer Ablation System • Terumo Europe NV is a wholly owned subsidiary of global medical device leader Terumo Corporation, which has nearly $5 billion in annual sales and operations in over 160 countries • Exclusive agreement for distribution in 100 countries; potential market size in excess of $1 billion in annual sales “ Roughly, this leaves the N. and S. American countries to be addressed either directly by BSD M or covered by agreements similar to the Terumo agreement. These “Americas” markets are somewhat larger than those covered by the Terumo Agreement. Sharpen your thinking! Even ignoring the other products (the existing hyperthermia products and other products yet to be announced), something like a “100-bagger” is in the offing! – over some only-guessable time frame. Microwave hyperthermia and ablation are creating a new era in cancer therapy!

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