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Biotech / Medical : Palomar Medical Technologies, Inc.
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To: Bob Davis who wrote (700)4/11/1999 2:05:00 AM
From: Tudor  Read Replies (2) of 708
 
Bob,
I have visited your site in the past and have been impressed with your work.

I did not know if you were aware, but Palomar had an investor meeting last week where they are trying to communicate their story to the investment community. A couple of interesting products in the pipeline that make this story interesting.

First, they are developing an ND yag laser. This type of hair removal laser has better results with dark skin than the ruby and the diode.

Second, they are developing a low cost laser ($20k) which will compete with Candela's Alexandrite.

Third, they are developing a fat removal laser which is suppose to disolve the fat cells.

Each of these is 1+ years out but could make this story interesting. By my calculations based on the recently filed S3, they will have about $.67/share in net cash (net of all debt) after the Coherent deal closes.

At its current price, it seems like a compelling story, although not yet a layup. After the Star sale, they will lose some $ until some of these other products hit the market. The diode laser (which is going to COHR) has higher revenues as well as higher margins.

My take is that PMTI should be viewed as an R&D company and should be valued based on prospects of its products in the pipeline. I would argue that 2-3X cash would be fair giving it a target price of as high as $2.

My guess is that investors are nervous about the possibility of delisting and the price will rise as the reverse split takes place and the Star sale goes through and the cash is shown on the balance sheet and more people find out about their current products under development.

Noleman
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