To David S. and the thread...let me take a whack at trying to pull today's news together, and remember, I have a sense of humor...
First, you have to ask yourself, since the FDA approval for the one application in late July, what has CCSI been doing? Have they been putting together a sales force to knock on hospital doors to sell their biliruben application? Have they been conducting surveys to see how many babies in North Africa may benefit from the biliruben application? Has the CEO been on a Florida beach, getting a sun tan, relishing the FDA approval certificate as the pinnacle of her career, as she sips on a salty margarita? Has the CEO and her 24 employees, been hunched around a table eating subway sandwiches, trying to figure out how they can inflate CCSI stock so they can retire to Des Moines?
Second, you have to ask yourself, what have large multinational companies been doing, especially since the FDA's endorsement of the one application of CCSI technology? Have they been plotting to figure out how to copy the technology? Have their patent lawyers been busy filing lawsuits challenging CCSI's patents? Or do they simply not care?
Let me give you my speculation...and it's just that, so don't accuse me of having broken into CCSI headquarters...this is based on my conversations with fellow stockholders, hard research, and use of a little brain matter...also, Janybird's research page...
I think that...
1. The FDA approval of the one biliruben application is great. I think it reasonable to assume that other large multi-national companies have already quantified the market size, have constructed their revenue models, and want rights to the technology.
2. Those same large multi-national companies are also quite aware that the CCSI technology can be used in other medical applications, as well as other fields, such as cosmetics, dental, etc. That they have also already quantified the market size for these other applications, have constructed their revenue models, and want rights to the technology in these other fields.
3. I think that CCSI knows #1 and #2 above, and that's why Fred Frank is involved. His past history indicates he only gets paid when a deal is done, and they are only BIG deals.
4. Darby has previously indicated that she was looking to enter into some type of marketing alliance within six (6) months of the last FDA approval which I believe was on July 31, 1997. That would mean the six (6) months will be up January 31st. I believe it's reasonable to assume that she already has expressions of interest, if not actual written proposals, and that Frank is assisting her in evaluating that interest. Obviously, they're not going to issue a press release every time they get a new proposal, nor would it make good negotiating sense to discuss what proposals are on the table.
5. CCSI already has significant institutional ownership. It's also true, however, that there are relatively few shares of CCSI stock outstanding. There has never been a suggestion of issuing additional shares to dilute the stock. I believe that existing institutional ownership and potential institutional ownership would like to see a greater number of undiluted shares to increase liquidity of their investment. I believe that is the primary factor in announcing the stock split. To suggest that CCSI is doing this to try and generate retail interest in their stock is absurd.
6. I believe it likely that CCSI will see increased institutional ownership, but that may be influenced by the following factors: upon CCSI reaching a higher market cap (because some funds can only invest if a company has a minimum market cap); upon completion of due diligence by new potential institutional ownership; and upon execution of a marketing alliance which will provide the numbers on which a revenue model can be generated.
7. I believe it reasonable to assume that there has already been analyst interest in CCSI, but it is reasonable to conclude that no initiation of coverage will be started until the they are made aware of a revenue model based upon the marketing alliance.
8. Given the interest that I am assuming in CCSI's technology, I would not be surprised to see CCSI adopt some type of anti-takeover provision, inasmuch as I understand the CEO has a larger vision for CCSI, and not to sell out at this stage.
9. The fact that CCSI is well positioned in the medical field, as reflected by the appointment today of Dr. Holzman, the chief of the division of the newborn medicine at Mt. Sinai Hospital in New York, and Dr. Maisels, an internationally recognized expert. I'm hard pressed to imagine how you could get other individuals with higher credentials.
10. I found it of interest that Ed Vimond is being added to CCSI's board, and that he formerly held management positions at Johnson and Johnson and Warner-Lambert, and that the CEO in the news release noted that he would be very useful in the next phase of the company's development. Interestingly that was the only real comment by the CEO in the news release...I believe she was telegraphing a CLEAR MESSAGE.
In summary, here's what I think we're looking at...
I believe that CCSI for the past few months, has been very busy evaluating possible marketing alliances with large multi-national companies who are interested in all aspects of CCSI's technology, and not just the one FDA approved biliruben application. I think it likely to conclude that a final agreement will be evidenced very shortly, e.g. in January or early February of 1998. I think that the stock split was to open the door to further institutional involvement, and that we will see significant increased institutional interest in the short term, and especially after the revenue numbers from the marketing alliance are announced. That it would be reasonable to conclude that you will also see analyst interest at that time. The only question is how big will the marketing alliance be...since I believe Frank is looking for one company to exploit all of the possibilities of CCSI's technology, I believe it will be very substantial, and not limited to projected revenues from the one FDA approved application. In short, if I'm not making this clear, I predict that a marketing alliance with a very big multi-national partner, such as Johnson & Johnson or a Warner Lambert, will provide sufficient revenues to justify a significantly higher stock price.
I also believe I'm right, and have placed my bets. I see no downside risk unless CCSI has received none or little interest in its technology, and from my research, and the potential market revenues that can be generated, I find that possibility extremely remote, and one risk I'm delighted to accept.
Concluding, the news that came out today is just one part of a puzzle that will be concluded within 60 days.
Again as a disclaimer, the above are my thoughts and predictions, and verified with my dog. It is not my practice to hype, exaggerate or start rumors, but that doesn't mean I'm not occasionally wrong. The good news is that this is BOTH a short and long term opportunity, and I look forward to the opportunity to do battle, I mean trade, with the market makers in this stock.
Just be patient and relax...this one is going to be a winner...in my opinion, of course! |
