Here is the good bad and ugly scoop on TMED again a case of just how much sales will this Knight-Needle bring into the future,what is the real potential of their Cardio divison subsidiary.
Regards weather god bad and ugly in all my travels I have known no place
as obressive than NYC or Philadelphia in a Heatwave as a sulphurous dripping wet heavy humidity almost always is attendant---
Trimedyne Inc.
Dow Jones Newswires -- July 28, 1999
DJ Trimedyne Up 27%; FDA OK Thurs. Sparked Interest - Exec
NEW YORK (Dow Jones)--Shares of Trimedyne Inc. (TMED) gained as much as 40% to a new
52-week high Thursday, capping a series of recent gains that have more than doubled the company's
stock price in the past week.
After closing at 1 3/8 a week ago, Trimedyne rose as high as 3 3/4, past the previous ceiling of 3 set
Friday. It recently changed hands at 3 11/32, up 21/32, or 24.4%, on volume of 1.5 million shares,
compared with a daily average of 117,400.
Chief Financial Officer Shane Traveller attributed the recent gains to news of the Food and Drug
Administration's approval last Thursday of the Irvine, Calif., company's OmniTip laser needle, which
might have piqued the interest of some investors.
"That's what started it," Traveller said. "There's nothing else that would be pushing the stock at this
point. It was undervalued to begin with and it woke people up to that fact."
The Omnitip laser, also known as the Knight Needle, allows doctors to suction or irrigate during laser
surgical procedures. Although the product received a broad FDA approval, Traveller said, it will be
used primarily to treat herniated spinal disks.
Trimedyne hasn't projected U.S. sales of Knight Needles, which cost about $500 each and have
been in use in England, he said.
Although Traveller credited the FDA announcement with spurring initial interest, he said the sustained
gains reflect investors' realization that the stock was undervalued.
With 10.9 million shares outstanding, the company's market capitalization was about $15 million on
the eve of the FDA announcement. Traveller estimated Trimedyne's liquidation value at $30 million to
$40 million - about $10 million in working capital and a patent portfolio worth about $30 million.
He downplayed the impact of a glowing research note on Trimedyne Wednesday by Donner Corp.
International, a small Santa Ana, Calif, investment bank that focuses on biotech issues.
The approval of the Knight Needle was a much needed shot of good news for Trimedyne, which
hasn't launched any new products this year and has been plagued by slumping sales.
The company, which originally made lasers for invasive cardiovascular surgery, has had to shift its
focus to other areas, including cosmetic surgery, urology and gynecology, as changing techniques
sapped demand for its original cardiovascular products.
Revenue slipped 25% to $7 million in fiscal year 1998 ended September. Sales in the first half of
fiscal 1999 totaled about $3.6 million.
Chief Financial Officer Traveller acknowledged the sales slowdown and said Trimedyne's
third-quarter results, which it will report Friday, "aren't going to surprise anyone."
There's no analyst coverage, according to First Call Corp.
The third quarter is historically a slow one, Traveller said, but sales should pick up in the fourth
quarter as new products, including its OmniPulse Jr. 30-watt holmium laser, are introduced. Total
fiscal 1999 sales should end near last year's levels, he added.
"If we keep sales stable from last year to this year, that's a healthy sign that the slippage has stopped,"
he said.
Trimedyne has also had to handle the publicity surrounding a Securities & Exchange Commission
insider trading probe. In June, the SEC filed civil actions against individuals previously tied to the
company, including the company's former controller. The charges stem from activities that occurred
three years ago, Traveller said. The company cooperated fully with the SEC and is not involved in the
suits, he added. Traveller said individuals, who were privy to an FDA approval of a Trimedyne
product, allegedly bought shares ahead of the public announcement and them dumped them after
Trimedyne shares soared to an intraday high of 16 1/4 from 3 7/16 two days earlier.
- Marcelo Prince; 201-938-5394
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