Bill, I've been a long time follower of this company and would like to offer a few thoughts:
1) <<GE does billions in volume so a 100 million judgement is not going to be a big deal for the press.>>
What should be a big deal for the press is that: A) This is one of the largest awards ever handed out for patent infringement in U.S. history and more importantly, B) ALL MRI machines that GE has sold are now illegal because they have been proven to infringe upon two of Fonar's patents.
In order to resolve this dilemma, GE will either have to pay huge bucks to Fonar to license the machines they've already sold plus any they want to sell in the future (IF Fonar even allows them to do so) or face more huge lawsuits from customers. What if Fonar choses NOT to license this technology to GE, what does GE do then? This is truly a nightmare for GE and Fonar holds ALL the cards at this point. This is such a newsworthy event not just because of the decision handed down but also because of future ramifications. GE could very well be driven out of the MRI business altogether.
2) <<Health care is not spending alot on fixed assets these days so FONR may not have any place to go. Now that you have your MRI scanner, why do you need another one at $800,000?>>
The scanners these clinics, hospitals own are getting old. But the biggest complaint about the older models is from the patients themselves. Many refuse to have an MRI simply because they are afraid of them. The older models involve scanning a patient inside a claustrophobic tube and are extremely loud, uncomfortable and the scans take a long time to complete. The new open scanners by comparison are quiet, comfortable and the patients can stretch out because they are no longer in a tube. Add to this the quicker turnaround because the new scanners are faster. The Quad improves even more on this because of its' four-bed feature. The idea being that there is always a patient in place and prepped so that there is no 'down time'. Images are also clearer with the new machines. Surgery is also possible using open scanners. There is good incentive for hospitals to update their machines.
3) In regards to insurance companies. Costs per scan using the new machines, especially the Quad series will be much lower than the old, clunky machines. The company estimates that for the first time, breast exams will be affordable using MRI. Using the 4-bed feature, the cost per scan can be cut to $80-$120. At this price, HMO's will be facing incredible protest from doctors and patients should they decide not to pay. MRI is far superior in detection of breast cancer than traditional xray mamography.
4) In regard to Fonar being a long wait. Don't count on it. The key for Fonar is getting listed on the NASDAQ National and getting out of the small cap listings. This may open the floodgates. At any rate, the stock is grossly undervalued at this point and will continue to be undervalued until wallstreet realizes the full implications of this decision and the bright future of Fonar, IMHO.
David Giacometti |
