David,
<<Ted, so your interest is just "as a consumer" - BULL!>>
And your proof is ...?
<<Yes, they made bad R & D investments. $22,000,000 on medical R & D between 1995 -1997 was overly optimistic, to say the least. I would guess that each of these had merit in and of itself, but Georgiev didn't have the business sense to understand that each would take many years before any product would result, and thus many millions. Each 10Q, however, clearly stated that each research area was years from a product.>>
Yes, PMTI has done R&D in several areas, but there is good reason to believe that during 1995-97, the lion's share of the money went into hair removal.
Consider that during the first three quarters of 1995, medical R&D averaged, at most, $500,000 per quarter. Only in the final quarter did it suddenly jump to its present levels, typically over $2 million. That was the same quarter in which PMTI announced its entry into laser hair removal. R&D has generally remained at this higher level ever since. Since the former lines of research are rarely mentioned anymore, there is good reason to believe that the higher level of spending has been due to hair removal. Therefore, I estimate that over 1995-97, hair removal accounted for over 70 percent medical R&D.
Since F95Q4, I estimate hair removal accounted for at least 80 percent of R&D. What has PMTI got to show for the money? The money-losing Epilaser, which by the way, is no longer profiled on Coherent's web site, and the LightSheer, which they claim will be profitable. As I pointed ou in message 662, Candela brought many more products to market, for a fraction of the R&D spending, and more in line with its revenues.
<<Profits for Q4 will depend to some extent on how the companies that were spun off do. They could still have some liabilities, plus they could still stand to gain from improvement in these companies. Notice that they retained certain rights to invest, and they have shares in at least one company.>>
That is a pipe dream. Those companies were dogs when PMTI bought them, and will be lucky to survive.
<<While you have always maintained that laser products do not provide long term results, PMTI claims that some of the hair removal is permanent. You mention people just using tweezers as if it were just a couple of hairs being removed. Remember that PMTI's products remove hair from larger areas.>>
I never compared laser to tweezing in that manner. I have always compared it to waxing, which is far more cost-effective.
<<You used to harp about skin discoloration from the laser heat. While I still think in most cases it's more like a tan>>
A tan! Tell that to the women who found themselves stuck with a slowly fading discoloration for up to 6 months! I spoke with a woman who experienced several months of this, and she made it very clear that the effect was NOT AT ALL pleasing like a tan. This is a very serious drawback for a cosmetic procedure. To put it in perspective, some electrolysis patients freak out when they experience even a few hours of redness and swelling!
<<their new product (and a product that only PMTI has FDA approval to market) uses a cooling element.>>
You refer to the LightSheer's water-cooled ChillTip handpiece, but that is nothing new. The Epilaser's EpiWand is also water-cooled. The cooling improves treatment comfort, but it cannot prevent the discoloration, because that is a reaction to the light, not the heat.
From PMTI/COHR's LightSheer hand-out at 1998 AAD meeting in Orlando:
"The most common side-effect, seen in about one patient in six, is
transient hyper or hypo-pigmentation, which clears in 1 - 6 months"
The Epilaser's frequency of hypo/hyper-pigmenation lasting 1 - 6 months, was 1 in 3 patients, so LightSheer seems to be a substantial improvement, but 1 in 6 are still not good odds for the consumer.
<<But their future isn't just in hair removal. Don't forget they also have tattoo removal,>>
The tattoo market became saturated long ago. They sell very few RD-1200's today, and this will only decrease.
<<treatment for spider veins,>>
Which Coherent barely mentions in the fine print of the LightSheer promotional material. Could it be that they do not want to cut into their VersaPulse sales? I suspect so! Moreover, I recently spoke with a leading vein specialist, who happens to be working with Coherent to try to develop an effective laser treatment for leg veins. He told me that that he liked the VersaPulse for facial veins, but made it clear that for now, sclerotherapy remained the primary treatment for legs. So forget about selling many LightSheers for vein work!
<<and other cosmetic applications.>>
which are ...? and will come to market by ...?
<<They are developing a tonsilectomy laser. I think they're still working on a product with government funding for measuring the depth of a burn based on amount of damage to capillaries, etc. This can save valuable time in getting the proper treatment for burn victims.>>
All very noble efforts, which have gone nowhere for years.
<<I guess it's fair for you to only cut them down based on hair treatment, first because that's all you know anything about, and second because they over estimated the demand for the product and caused overestimations by stockholders.>>
I'm glad you see it that way.
<<But PMTI is in a growing medical sector. Lasers will be used to perform more surgical procedures as time goes by.>>
Sounds great!
<<Teaming up with Columbia Hospitals ( while the timing couldn't have been worse due to their own legal problems) could still result in a very profitable venture.>>
One year ago, the CTI centers, including Columbia, were promoted as the primary core business. Selling lasers, was to have been very secondary. Read the latest 10Q. Can you find even a single instance of the words, "CTI", "Columbia", "CliniSpa" or "center(s)"? (Time-saving Hint: load it into your word-processor, and use its find feature.)
See message #610 for an in-depth look at what what CTI chief Tom O'Brien promised, and what he actually delivered!
<<The new PMTI president is watching this venture. It's quite possible, given Georgiev's poor management skills, that the deal is not profitable to PMTI AS CURRENTLY WRITTEN. Watch for a renegotiation of this contract.>>
I suspect they would like to negotiate a graceful exit from the Columbia deal. Peace with honor!
<<My interest? I invested a long time ago - like 2 years ago, and more for Nexar than PMTI itself.>>
You have my sincere sympathy!
<<Now back to your interest. You say that you've done all this research and hours of posts against the company, but your interest is "as a consumer". That's bull! There are other forums to protect consumers.>>
Search for my name on the internet, especially USENET via DejaNews, and you will find my numerous posts sharing information with consumers from all walks of life, regarding lasers and other hair removal methods. These go back to Jan'97. I did not begin to post to investment boards until Mar'97. I also help many consumers who contact me directly by phone or e-mail. Not long ago, I helped a consumer recover over $5,000 that had been spent on laser hair removal treatments that did not live up to expectations.
<<Those on this forum are stock investors - shorts and longs and lookers. You know that. People don't come to Silicon Investor looking for hair removal products. So come clean. What is your real interest?>>
As part owners of laser hair removal businesses, you have a right and a need to know the facts about the efficacy of the treatment results. Clearly, I do not believe that the efficacy justifies the expense. The take home message is simple: you will not profit from products that do not offer value for the money!
Ted Molczan
molczan@sympatico.ca
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