More on the other side of the story.
Stephen,
I read the very informative janybird post at Message 3447686 before writing my previous post. It has lots of useful info. I was trying to use that info to project future revenues. As you said it doesn't matter what you or I project for future revenues, but what a potential partner projects. However, I think that I can get fairly close to what a partner would estimate from documents that janybird's post points to. If you don't want to believe my estimates, or work it out yourself, that's okay with me, but there's no reason we can't make a very good guess at it. That's what Wall Street does all the time.
Also, as Webster Groves pointed out I think HP would be the ideal partner. The reason is that HP is the dominant force at the bedside right now doing all sorts of monitoring. However, they have historically no role in blood monitoring. (This is changing with the i-STAT deal.) Once blood is taken out of the patient it's historically in the hands of Abbott, Becton Dickinson, Boehringer Mannheim etc. If someone like Abbott has a bilirubin test that's making a lot of money for them already, they have little incentive to go with CCSI's technology and share the profit. Since HP isn't in that market yet, they would be a logical partner.
HP has done similar things in the past. Check out i-STAT, HP owns 14% of this company (See i-stat.com ) and distributes their blood analyzer internationally. But if you look at the history of i-STAT they were in business for over 10 years developing the technology, the manufacturing process, and building a US sales, marketing, and distribution network before HP invested. But, I'd have to agree with Don Carlson that HP wouldn't be caught dead investing in CCSI. Well, maybe if they got 60% of the company for $6 million, but no way near the current market capitalization.
The reason that CCSI isn't worth it's current price is simply this: They don't have any marketing and distribution network, any special manufacturing experience, or any brand name. All they have is some intellectual property (which aren't very strong) and pre market approval from the FDA on a certain device to measure bilirubin non-invasively. All I'm saying is that is worth about $10 million. They may be able to build that into much, much more, but right now you can go buy companies like that for $10 million, so why spend $100 million on it.
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Jim |
