Spectranetics Corp (f/k/a SPNC)

[Leonitus]

1. SPNC has serious disclosure related issues including

SPNC did not disclose 12 recent patient death allegations by medical professionals “against” SPNC devices
FDA alleges SPNC deliberately withheld adverse event reports from the FDA
Unacceptable surgeon injuries – SPNC laser device emits accidental radiation and causes “burns to the gown, glove and finger of physician”
2. PNC did not disclose the largest recall in SPNC history in November 2016

3. Stellarex pivotal clinical data is “worst-in-class” for both primary efficacy and primary safety measures

4. Further analysis of primary efficacy measure shows competitors’ clinical data outclassing Stellarex by a factor of 16X and 9X, Stellarex really is “worst-in-class”

5. SPNC data-mined non-performance related demographic “differentiators” and successfully sold a flawed narrative to the street, our experts claim differentiators are trivial and highly unlikely to impress the FDA or cause hospitals to choose Stellarex

6. Medtronic, the DCB market leader, recently dropped its estimate of the worldwide DCB market by 23%, while SPNC’s industry forecasts became even more aggressive

7. Stellarex sales have failed in Europe, the only market it is approved in, supporting our view that projections of U.S. sales, if Stellarex is approved, are wildly inflated

8. A closer look at clinical data suggests “fortuitous flattening” or “manufactured data” was the difference between success and failure of the Stellarex Pivotal Trial

9. SPNC discloses its promotion of the AngioScore product included assumptions that were “materially inaccurate” and that these material inaccuracies may occur again – specifically mentioning Stellarex

10. Recent commentary by sell-side analysts highlights “” and “flat to down performance”

11. SPNC likely requires $100M+ in new capital but is already highly levered with over $300M in debt – a dilutive equity raise would crush the stock; daily liquidity is just $9M

12. Short term price target: $8 (70% downside)

Our research included interviews and in-depth analysis of various issues included in this report by 6 experts in fields relevant to the content in this report. We advise all readers of this report to read the biographies provided in Exhibit 5 to this report.

Please see SkyTides entire report here. https://geoinvesting.com/skytides-research-spectranetics-corporations-stellarex-price-target-8/

[I-Man]

Amazing to see this near $30.00 still today.... I remember when this started OTC and I purchased initial shares at 15 cents back in 1996 when I lived in Colo Sprgs....

[I-Man]

SPNC reminds me of REFG today and where SPNC was in 1996 when I first invested in them around 15 cents then...

[I-Man]

Just think, I first bought SPNC at 15 cents in 1996... it was an OTC stock then.

[Terrence89]

very good post, MWM

[Terrence89]

It is impressive technology nontheless

[Terrence89]

does this company have new technology in developement?

TIA

Steve

[Penny Roger$]

~ Wednesday! $SPNC ~ Earnings posted, pending or coming soon! In Charts and Links Below!

~ $SPNC ~ Earnings expected on Wednesday *
Want more like this? Search Keyword: MACMONEY >>> http://tinyurl.com/MACMONEY <<<
One or more of many earnings sites has alerted this security has or will be posting earnings on or around the day of this message.








http://stockcharts.com/h-sc/ui?s=SPNC&p=D&b=3&g=0&id=p88783918276&a=237480049




http://stockcharts.com/h-sc/ui?s=SPNC&p=W&b=3&g=0&id=p54550695994



~ Google Finance: http://www.google.com/finance?q=SPNC
~ Google Fin Options: hhttp://www.google.com/finance/option_chain?q=SPNC#
~ Yahoo! Finance ~ Stats: http://finance.yahoo.com/q/ks?s=SPNC+Key+Statistics
~ Yahoo! Finance ~ Profile: http://finance.yahoo.com/q/pr?s=SPNC
Finviz: http://finviz.com/quote.ashx?t=SPNC
~ BusyStock: http://busystock.com/i.php?s=SPNC&v=2


<<<<<< http://www.earningswhispers.com/stocks.asp?symbol=SPNC >>>>>>



http://investorshub.advfn.com/boards/post_prvt.aspx?user=251916

*If the earnings date is in error please ignore error. I do my best.

[surf1944]

7:17AM On The Wires (WIRES) :

Spectranetics (SPNC) announces the first patient enrollment in the EXCITE ISR clinical trial. The EXCITE ISR clinical trial will enroll up to 353 patients at up to 30 sites in the U.S. The primary efficacy endpoint of the trial is freedom from TLR, which will be evaluated through six months following the procedure. These results will be included in a 510k filing with the FDA.

[GuruTrader]

Spectranetics shares rise on analyst upgrade
Spectranetics shares rise as analyst upgrades to 'Buy', says FDA investigation could end soon

On 10:57 am EDT, Monday October 26, 2009
Buzz up! Print.Companies:The Spectranetics Corporation
NEW YORK (AP) -- Shares of Spectranetics Corp. rose Monday after a Stifel Nicolaus analyst upgraded the medical device maker to "Buy" from "Hold," saying he believes an ongoing investigation into the company's business practices could close soon, boosting the stock.

Related Quotes
Symbol Price Change
SPNC 6.34 +0.27


{"s" : "spnc","k" : "c10,l10,p20,t10","o" : "","j" : ""} The stock added 29 cents, or 4.8 percent, to $6.36 in morning trading. Shares have traded between $1.91 and $6.89 over the last 52 weeks.

Analyst Thomas Kouchoukos said he recently met with Spectranetics management. "We came away more optimistic with respect to the company's efforts to resolve the ongoing FDA investigation, and note that management appears increasingly confident that it can resolve this issue prior to the end of this year," he said.

In September 2008, the FDA and U.S. Immigration and Customs Enforcement jointly served the company a search warrant. It sought information concerning the promotion, use, testing, marketing and sales of a certain product and payments made to medical personnel. The warrant also sought details of catheter guidewires and balloon catheters made by foreign parties, two post-market studies and compensation packages for certain personnel whom the company didn't identify.

Spectranetics stock has already rebounded from a sharp drop last year and will likely see more of a boost when the investigation is resolved, Kouchoukos added.

"Although it remains difficult to predict the timing of this event, recent conversations with management leave us increasingly confident that this matter can be resolved by year-end," he said.

After the investigation is resolved, he said, investors will likely focus on improvements in the company's business, which includes vascular intervention products and disposable medical products.

Spectranetics is headquartered in Colorado Springs, Colo.

[I-Man]

Another medical device manufacturer worth looking into, as they have reminded me of SPNC back in late 90's...

Here is recent PR from them::



American Med Tech, Inc. Merger or Acquisition?
10:19p ET February 24, 2009 (PR NewsWire)

American Med Tech, Inc. (Pink Sheets: RBRM) today announced that their CEO, Executive VP and International Marketing Manager have returned from a mysterious "fact finding" visit to an as yet unnamed suitor.

"We discussed first and foremost adapting certain of our diabetic personal hygiene product line that utilizes proprietary silver to enable them to put these products on the shelves of thousands of retail pharmacies all across the USA," said David Phillips, Ph.D. CEO.

Additionally, Dr. Phillips reports: "We also discussed several other things that I am not at liberty to reveal right now."

Finally, Dr. Phillips told reporters today: "It would have to be important for this many key managers to travel together."

Inquiries can be made at www.americanmedtech.com. E mail inquiries can be sent to [e-mail]. Phone is 304-725-2202.

[I-Man]

Yeah I was one of the investors killed by WCG fraud and I even lived in Colo Springs, CO and knew about SPNC long ago when it was penny stock and owned a lot of it initially..

But corp greed & fraud has hurt so much investor confidence in the USA and the world is watching us, and until the SEC and govt regulators show integrity and do their damn jobs they are highly paid for, nobody is going to invest again without trust and integrity back at every level of corp operations and the US government parastatals..

[MWM]

WCG seems to have a had a very similiar story last year...

October 24, 2007
WellCare Shares Punished For FBI Raid (WCG)
Shares of WellCare Health Plans, Inc. (NYSE:WCG) were trading down over an FBI raid at the company's Tampa, Florida headquarters. Unfortunately there aren't any details as to what it was about. Obviously it's not anything favorable, that much you can count on. The company is a manged care services company that works for government sponsored healthcare programs, such as Medicaid and Medicare; and offers family health plans.

It also offers:

Temporary Assistance to Needy Families (TANF) programs,
Supplemental Security Income (SSI) programs,
State Children's Health Insurance programs (S-CHIP),
Family Health Plus programs (FHP).
At the end of last year it had roughly 2.258 million members through a network of 50,000 physicians, 600 hospitals, and approximately 15,000 other ancillary providers and skilled nursing facilities. Unfortunately there is just not any information available

Shares had fallen 5.5% to $115.50 before the stock halt, and the 52-week trading range is $55.56 to $128.42. With a P/E north of 25 and with it much closer to highs, if the news is as bad as other insurance and hospital system raids of the last few years it could be a really bad day for holders. This has(had) just under a $5 Billion market cap.

It has been quite some time since we've seen FBI and insurance companies have the FBI conduct raids on headquarters, and this is a reminder of one of the risk aspects of these businesses. We'd expect a comment out of the company soon.

Jon C. Ogg
October 24, 2007

[MWM]

08:29 SPNC Spectranetics: News less ominous than speculation, good buying opportunity; lowers tgt to $8 - Jefferies (4.73 ) -Update-

Jefferies is lowering their tgt on SPNC to $8 from $12 noting that yesterday SPNC was announced that it was served with a search warrant on Thursday. Firm believes the stock's decline yesterday was overdone given the nature of the investigation, creating a buying opportunity. Firm says that although SPNC faces multiple challenges, it has a promising growth outlook in the peripheral arterial disease market as well as an overlooked opportunity in cardiology with its lead removal practice.

[MWM]

Spectranetics Announces Federal Investigation
Sep 4, 2008 9:17:00 PM
Copyright Business Wire 2008


Email Story Discuss on ZenoBank

View Additional ProfilesCOLORADO SPRINGS, Colo.--(BUSINESS WIRE)--

Spectranetics Corporation (Nasdaq:SPNC) was jointly served by the Food and Drug Administration (FDA) and U.S. Immigration and Customs Enforcement (ICE) this morning with a search warrant issued by the United States District Court, District of Colorado.

The search warrant requested information and correspondence relating to: (i) the promotion, use, testing, marketing and sales regarding certain of the company's products for the treatment of in-stent restenosis, payments made to medical personnel and an identified institution for this application, (ii) the promotion, use, testing, experimentation, delivery, marketing and sales of catheter guidewires and balloon catheters manufactured by certain third parties outside of the United States, (iii) two post-market studies completed during the period from 2002 to 2005 and payments to medical personnel in connection with those studies and (iv) compensation packages for certain of the company's personnel.

Spectranetics is cooperating fully with the appropriate authorities regarding this matter. Spectranetics currently expects that business operations will continue in the ordinary course.

The Company confirmed that NASDAQ halted trading of Spectranetics Corporation common stock pending this announcement. Trading will resume tomorrow.

About Spectranetics

Founded in 1984, Spectranetics manufactures and sells the only excimer laser approved in the United States, Europe and Japan for use in minimally invasive cardiovascular procedures. This technology treats complex cardiovascular conditions by photo-ablating multiple lesion types into tiny particles that are easily absorbed into the blood stream. The Company's disposable catheters use high-energy "cool" ultraviolet light to vaporize arterial blockages in the legs and heart, as well as scar tissue encapsulating pacing and defibrillation leads. For more information visit www.spectranetics.com.

[MWM]

SPNC Update

http://www.kktv.com/news/headlines/27863669.html

Feds Raid Local Business Save Email Print

Posted: 1:05 PM Sep 4, 2008
Last Updated: 1:05 PM Sep 4, 2008
Reporter: KKTV
Email Address: [e-mail]

The Colorado Springs Police Department and ICE officials raided a local business Thursday morning.

Federal officials swarmed Spectranetics and are raiding the contents of the business. All employees have been asked to leave the building and were not allowed to take any electronics with them, including laptops, blackberries or any other electronic.

The exact reason for the raid is unknown at this time.

Stay with KKTV and KKTV.com for the latest.

[MWM]

Healthy outlook at laser company
Spectranetics’ CEO expects revenue, sales to keep rising
August 29, 2008 - 6:49PM
By WAYNE HEILMAN
THE GAZETTE

When John Schulte took over as chief executive of Spectranetics Corp. in 2003, he had no shortage of challenges awaiting him - flat sales, dwindling cash and a company that had narrowly averted a battle with dissident shareholders.

Since then, the Colorado Springs-based medical-laser manufacturer has more than tripled sales, accumulated $25 million in cash and is starting to make money after investing heavily in research and developing and expanding its sales staff and manufacturing operations. The company now employs 300 in Colorado Springs at its new headquarters in the InterQuest business park across from the Air Force Academy.

Schulte turned down Spectranetics the first time the company offered him the chief executive job in 1996, saying the company was in "rough shape," and he instead agreed to become a director. Seven years later, Spectranetics had spent six months seeking a replacement for Joseph Largey, who had been ousted after siding with dissident shareholders. Directors again asked Schulte to take the job, which he accepted.

A veteran of more than 20 years in the health care industry in Boston and southern California, Schulte had spent 1½ years as chief executive of Consensus Pharmaceuticals Inc. and three years as chief executive of Somnus Medical Technologies Inc. before it was acquired by a European company. He had also held senior executive posts at Genzyme Corp., Target Therapeutics Inc. and CR Bard Inc.

Under Schulte, the company's stock price jumped more than fourfold to a 15-year high of $16 late last year before dropping in February to less than $9 a share when it failed to meet stock analysts' profit forecast. Spectranetics shares, which trade on the Nasdaq Stock Market under the symbol SPNC, fluctuated between $8.50 and $9.50 during most of August, down from the $13-$15 it traded for during August 2007.

Question: Why did you take the job?

Answer: I thought they had made enough progress by 2003 that I was willing to move my family here for this job, but the company still had a lot issues. Our sales were flat and we weren't making money, we had negative attention because of the threatened proxy fight and we had just reached a settlement on a patent dispute that required us to pay nearly half of our remaining cash.

Q: What was your strategy to revive Spectranetics?

A: We made the decision to retrench and focus on research and development and expanding our market. At that time, our laser was only used to clear coronary artery blockages and to help remove pacemaker leads. We shrank our business in Europe because it was losing money and we downsized the sales force to invest in research and clinical trials. We eventually got approval to use our laser to treat peripheral artery disease (blockages in leg arteries) and that is what has driven much of our growth. After that, we tripled our sales force, an investment of more than $10 million a year, to drive higher revenue from that market.

Q: Are those investments starting to pay off ?

A: Our sales have grown at a compound rate of 35 percent a year for the past three years. Fortune magazine has ranked us as one of the fastest-growing public companies for two consecutive years. We have built a solid foundation with the investments in research and development, the expanded sales force and our new facility.

Profitability will accelerate once we reach $30 million a quarter in sales, which should happen in the fourth quarter of this year or the first quarter of next year. For us, revenue growth has been the most important, but profitability will become more important in 2009. Now our lead-removal business is growing more than 50 percent per quarter and our coronary artery business is growing again after three or four years of shrinking.

Q: What investments are you making now?

A: We have clinical trials under way to use our laser to clear stents that develop blockages and to clear clots in patients who have had heart attacks before a stent is put in.

We also have a very talented management team that we have recruited in the past three years - everyone but myself and our chief financial officer. Our move into our new facility will be complete by the middle of next year and we are starting to look at building or leasing more space here.

Q: Where do you see Spectranetics heading in the next five years?

A: We will reach $100 million in revenue this year and our next milestone is $300 million in revenue, which I would like to do within five years. At that point we would probably employ about 1,000 people, including 600 here in Colorado Springs. We are adding 50-100 jobs a year.

Q: Spectranetics completed its first major acquisition in many years in June. Are other acquisitions planned and do you believe Spectranetics is an acquisition target?

A: We have talked about other product lines we would like to add.

There could be a larger combination, but during the next 12 months we want to absorb what we have. We want to control our own destiny. That is why we raised $50 million in 2005 - so we could make acquisitions, expand our manufacturing and be in control if another company made an overture to us.

Our interest is in growing the business. Our management team is capable of running a much larger business.

Q: Are you disappointed by the company's stock price?

A: It is a tough time for smaller public companies, especially in the medicaldevice area, where we have been punished more than others. It is a little frustrating. The company is four times larger than when I got here, we have $25 million in cash and revenue is growing at a record rate, yet our market capitalization is less than it was a year ago. With continued good performance, the stock price has to go up.

Once profitability accelerates, that is when the real market value of the company is unleashed. Most of the board bought stock when the price went down, so we are putting our money where our mouth is. I remain very optimistic - we have an exciting technology that has the ability to save and improve patients' lives. Our founder's vision is finally being realized.

This is what he dreamed could happen and it is finally happening.

[MWM]

Spectranetics Announces First Laser Lead Extraction Procedures in Japan
Fast Track Approval Received

Last update: 6:00 a.m. EDT Aug. 27, 2008
COLORADO SPRINGS, Colo., Aug 27, 2008 (BUSINESS WIRE) -- Spectranetics Corporation (SPNC:The Spectranetics Corp
News, chart, profile, more
Last: 4.73-4.27-47.44%

1:05pm 09/04/2008

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SPNC 4.73, -4.27, -47.4%) today announced the first use in Japan of its Spectranetics Laser Sheath (SLS(R) II) technology for removal of cardiac leads. The SLS II approval by the Ministry of Health, Labor and Welfare is one of just three medical device technologies chosen annually under a fast track review in Japan. This technology has been used in the United States and Europe for over a decade in over 45,000 successful procedures and is an important tool to manage lead-related issues that may arise in the roughly 4 million pacing and defibrillation leads implanted annually in patients worldwide.
Two procedures were recently performed at Tokyo Women's Medical University by Dr. Morio Shoda, Chief of Clinical Cardiac Electrophysiology and Associate Professor of Cardiology, and Dr. Satoshi Saito, Assistant Professor of Cardiovascular Surgery, under the proctorship of Dr. Roger Carrillo, the Director of Surgical Electrophysiology at the University of Miami. Both cases involved leads that were infected, and all leads were successfully removed from the heart and encapsulating scar tissue using the SLS II Laser sheath without complication.
Dr. Shoda commented, "I am very pleased to begin using the SLS II Laser Sheath to remove leads from Japanese patients for whom this form of management is needed. Now in Japan we can safely address the needs of many patients with implantable pacemakers and defibrillators without subjecting them to more invasive surgical procedures."
Dr. Roger Carrillo added, "In my years of experience with lead extraction procedures, the laser sheath is an indispensable tool that has helped me remove leads in a very safe, effective and efficient manner in hundreds of patients. In this first case in Japan, the laser sheath was successful in extracting a chronic lead where all other techniques had previously failed."
"Japan is an important market for Spectranetics and the recent fast track approval for our SLS II Laser Sheath is a key first step towards commercialization in Japan, supported by our distribution partner, DVx Japan. We will launch this technology commercially following reimbursement approval for the SLS II, which is currently under review by Japan's Ministry of Health, Labor and Welfare," stated John Schulte, Spectranetics' chief executive officer.
As an escalating number of patients receive implanted cardiac devices, concerns surrounding lead management options have risen. Infection continues to be a primary cause for concern with leads, although lead malfunction and patient lifespan are increasingly causing physicians to consider lead removal versus lead abandonment, the current standard-of-care practice.
The SLS II uses "cool" ultraviolet light to safely, effectively and efficiently ablate scar tissue that holds problematic leads in place. A circle of fibers that emit pulses of energy travels over the cardiac lead to dissolve scar tissue that binds the lead to the body. Once the scar tissue is dissolved, the lead can be safely removed. Spectranetics is also in the process of seeking approval of the Lead Locking Device (LLD) technology in Japan, which can be used to assist removal with the SLS II by transmitting traction on the lead from within its hollow inner structure.
About Spectranetics
Founded in 1984, Spectranetics manufactures and sells the only excimer laser approved in the United States, Europe and Japan for use in minimally invasive cardiovascular procedures. This technology treats complex cardiovascular conditions by photo-ablating multiple lesion types into tiny particles that are easily absorbed into the blood stream. The Company's disposable catheters use high-energy "cool" ultraviolet light to vaporize arterial blockages in the legs and heart, as well as scar tissue encapsulating pacing and defibrillation leads. For more information visit www.spectranetics.com.

[MWM]

Crash

[buhg1b]

Spectranetics, Medtronic settle intellectual property suit
Spectranetics says Medtronic licenses disputed patent, companies reach settlement
April 28, 2008: 08:41 AM EST

NEW YORK (Associated Press) - Spectranetics Corp. said Monday it has settled its intellectual property dispute with Medtronic, with Medtronic licensing the patent at issue.

Terms of the settlement agreement were not disclosed.

Spectranetics' disposable catheters use high-energy ultraviolet light to vaporize artery blockages in the legs and heart, as well as scar tissue surrounding pacing and defibrillation leads. Top of page

http://money.cnn.com/news/newsfeeds/articles/apwire/066878e52cf556c96ea915b699dd8224.htm

[buhg1b]

Yes, I also listen in on calls from time to time and certainly read the filings and such. You are right, there is much information tucked away, especially in the notes section of many annual reports.

[Democritus_of_Abdera]

No, I'm not a professional analyst and I have never participated live in a conference call... But, I find them very interesting to listen to. After a short learning curve, you can decern a lot from the tone of the call, especially during the question and answer session... I also recommend reading 10-K's etc (especially the "Risks" section)... An opportunity to read a current prospectus is very enlightening... I am amazed at what a company will divulge in these reports, probably to counter potential lawsuits.

[buhg1b]

Thanks for the input, much appreciated. Were you on the call live?

[Democritus_of_Abdera]

Buhg1b, I was not as impressed with the CC as the market...

1) There was some clarification of the contemplated business deal(s)... but it was not explicit enough to satisfy me.... I’m worried that they might purchase technology related to a drug-eluting balloon that will need to go through the FDA’s PMA process... a process which I think SPNC is ill prepared for. I have reproduced the key question and answer regarding this issue below.

2) I was troubled by the John Schulte’s statement that physicians are looking for better data regarding the benefits of artherectomy before he expects artherectomy to garner a bigger share of the endovascular repair space (see relevant Q&A quote below). This is a confirmation of what EVVV stated in their CC last quarter (#msg-27082350). Thus, SPNC is fighting for market share, a fight which they are winning only because the competition is weak. ... Note that John expects a 15-20% growth rate for all technologies in the PAD market with artherectomy maintaining its 20% share of the total. So, even market share gains can be substantial, I would just like the opportunity to be more open ended.

3) The revenue increase was good, but SPNC spends everything it earns... The income from the increased revenue is not flowing to stockholders at this time. To their credit, SPNC doesn’t employ toxic financing.

4) I continue to be optimistic about the use of the laser for debulking in-stent restenosis. But, I also think that competing stent technologies with pro-healing coatings might become a problem if SPNC doesn’t move into this field rapidly... I’d like to see more progress on this front.

5) The relatively slow enrollment for the PATENT and SALVAGE trials concerns me... John Schulte had a good excuse... i.e. getting protocols through hospital IRBs can be byzantine.... but, I continue to believe that the pace of trial enrollment is a proxy for physician enthusiasm for the product. Slow enrollments are a red flag.

Q&A question regarding impending business deal

<Q – Ashim Anand>: Thank you for taking my call. Most of my questions were answered. If you can comment on two things? You mentioned something about the business development; if you can give more details and if that would be dilutive? And other, inventory has been down, which is more surprising to you guys? Or this is a welcome downturn in inventory levels?

<A – John Schulte>: Sure. Well let me answer the first and Guy’ll answer the second. With regard to the business development activity, as I mentioned, we’d like to do a deal this quarter. Our focus is on the VI side in products that are complementary to our technology sold to the same physicians, either for use in the same procedure or in procedures where the laser may not make as much sense. These will be either distribution deals or bolt-on acquisitions using only existing cash resources. We would never do a stock deal at these prices so we want to do it out of existing funds. And one that we think will help increase the leverage of our Vascular Intervention sales force.

Q&A question related to artherectomy share of Endovascular market


<Q – David DeGiralamo>: My question is how much of that growth, let’s call it 15 to 30, how much of your growth relative to endovascular procedure growth will be due to atherectomy market growth versus how much you might be able to gain in market share?

<A – John Schulte>: That’s a hard one to pinpoint. My guess is probably more market share gain than atherectomy growth within the market. I think until there’s better data available on the benefits of atherectomy, that’s one thing that physicians are looking for. So they’re – now it’s based on things where they look at certain lesions that just don’t work very well with balloons and stents and those are below the knee lesions, for example. If they’re longer than three centimeters, most physicians realize that ballooning it doesn’t provide very good results. You don’t want to put in multiple stents; there haven’t been good results there and so tissue removal makes sense. And that’s anecdotal stuff. We’ve got good LACI data showing great limb salvage rates and those kind of things in really difficult long lesions below the knee and so I think that’s an area where below-the-knee lesions, long lesions are growing. And therefore, that’s an area where we’re focusing. A second area is the treatment of instent restenosis....

[buhg1b]

Spectranetics, Q1 2008 Earnings Call Transcript

John Schulte

Thanks Don. And good morning to everyone joining us for today's earnings call. As usual I am going to open up the call with some comments on our financial performance. And then focus on the key accomplishments in the first quarter. I will highlight some of our goals for the second quarter so you can measure our performance for the next call. The, Guy will review our financial operating performance in more detail for this past quarter. And then we will open up the call to your questions.

I have to say I am very pleased with both our top and bottom line performance in the first quarter of 2008. Our total revenue was 23.8 million this quarter, up 37% from the prior year quarter. Importantly, we saw strong revenue growth in every product line across our business. Total disposable product revenue grew 39% over the prior year.

Our vascular intervention business grew 36%. And our lead management revenue increased 48%. This strong performance on both sides of our business validates our decision to separate our sales force into two groups. One focused on vascular intervention, and the other on lead management.

I believe we now have the second largest sales force in the U.S. concentrated on peripheral vascular intervention and we have by far the largest team addressing lead management.

Equipment revenue was up 56% from the prior year and as expected, down 22% from a very strong fourth quarter. Importantly, we placed 24 new lasers last quarter, bringing our worldwide install base to 767 systems with 607 of these in the United States. I believe we are now about half way to our potential of approximately 1,500 laser systems worldwide. So while we have experienced a lot of growth in laser systems over the past three years, we still have plenty of room to grow.

In addition to strong growth in the United States, we also continue to see very nice growth internationally. Revenue outside the U.S. grew 35% and represented 11% of our total revenue. I am optimistic about the growth prospects outside the U.S. And expect a strong growth internationally will continue throughout the year.

On the bottom line, while we experience the pre-tax loss of $685,000, we expected a loss and in fact came in ahead of our plan. As usual, the year is front loaded with certain extensions such as the global sale meeting, so were pleased with a loss which was smaller than expected.

Although some of the savings in relation to our expectations was timing related and will likely be spent later in the year, we do expect to return a profitability in the second quarter. I am particularly pleased with our strong top line performance given our strategic decision during the fourth quarter to split our sales force into two separate groups, which was accomplished and executed seamlessly in January this year.

Following our fourth quarter call, many investors and analysts expressed concern that we were diverting resources away from atherectomy and toward lead management and it was perceived that we had lost confidence in the growth potential of our atherectomy business. In fact, quite the opposite is true.

To illustrate prior to the split, we head 90 full line sales people which included 14 managers and we estimate that they spent approximately 70% of their time on vascular intervention sales. That affectively implies a 63 people sale organization supporting the vascular intervention business.

In addition, we have 14 sales professionals dedicated to the lead management business. Plus an implied 27 sales professionals within the full line sales team, which gave us a total of 41 professionals selling lead management products prior to the split. So in summary we had effectively 63 individuals selling vascular intervention, and 41 individuals selling lead management products prior to the split.

As of March 31st, we had a total sales organization of 111 professionals. That's and add of seven. This included 76 supporting vascular intervention which was made up of quota carry reps and 12 sales managers. We also have 35 professionals supporting lead management of which 16 are quota carrying and 15 clinical support specialist and four sales managers.

This team managed to grow our disposable products revenue significantly on both a year over year and sequential basis during the same quarter that the sales force split was implemented. My hats off to the sales leadership team who did and excellent job executing the split of the sales organization. I am extremely proud of their accomplishment.

The most important initiative to the vascular intervention sales force is a successful expansion of the TURBO Booster. While the initial experience with a broad base of users demonstrated significant looming gains over our standard 2.3 and 2.5 millimeter laser catheters, some physicians felt that the technique was a bit cumbersome. They felt that the saline flush was more complicated than the standard setup and that in challenging lesions it was difficult to keep the laser catheter properly positioned on the TURBO Booster guiding sheet requiring repositioning with lengthen procedure time.

We were able to simplify the saline flush technique greatly shortening procedure time setup. We also determined that are what called the splitage issue was caused by the hyrdofilling coating on the laser catheter. We found there was a simple fix. We simply shortened the coating on the laser catheters so that the TURBO Booster was always locked down on an uncoated portion of the catheter. This solved the slippage issue.

Once these changes were implemented, case times drop significantly and user satisfaction increased as indicated by our strongest sales month of the quarter in March. We also made nice progress on the two clinical trials focused on the treatment of instent restenosis or ISR.

We have now enrolled 15 patients in Payton the ISR trial in Germany, which will evaluate the TURBO Booster plus PTA. There are now five hospitals enrolling in that trial. The salvage trial which is being done in the United States is also getting started very nicely. We have five patients enrolled in salvage and have four sites capable of enrolling. We expect to add six new sites in the second quarter.

Salvage is an ISR trial combining laser atherectomy with the TURBO Booster followed by a gore of viabon coverage stint. This is a 100 patient physician sponsored IDE trial jointly sponsored by Spectranetics and W.L. Gore. We certainly feel that scientifically based clinical trials evaluating the safety and ethicacy of laser atherectomy with the TURBO Booster will be very important to establish the clinical benefits of this treatment strategy.

This quarter we also initiated our first coronary trial in many years. The Tammy trial is a 200 patient randomized in five hospitals in Poland. The principle investigator in Tammy is Darius Dudek a world renowned intervention cardiologist in the treatment of acute myocardial infarction, or AMI.

Tammy will treat AMI patients with large thrombus burtons. One group will receive laser plus direct tinting and the other will get balloon androplasty instinting. The in point will be a combination of SP resolution. Which is resolution of EKG abnormalities and the amount of distal embolization as measured by myocardial blush scores. Tammy will focus on the most complex AMI patients and represent a very nice new opportunity in the coronary market.

As we currently have very little business in this segment at the present time. We enrolled our first two patients in the first quarter. We are excited about the prospects of the Tammy trial and our excitement was fueled by a recent publication of and article of International Journal of Cardiology entitled "XMER laser in acute myocardial infarction single center experience on 66 patients."

This paper describes the laser experience of a hospital in Italy. The authors noted significant improvement in timmy flow, excellent ST resolution, a very low rate of distal embolization as measured by very high blush scores. A low complication rate and event free survival of 95% at six months follow-up.

The clinical in points documented in this paper are consistent with the clinicals of the Tammy trial. I am very excited about the progress we have mad in advancing our strategic initiatives in growing our vascular intervention business and building business in the future with these new trials.

We also made very good progress toward achieving our goals to accelerate the goal of lead management. In addition to completing the sales force split, we held two very successful master summits focusing on lead management. More than 40 physicians attended these live case training sessions with leading physicians as operators and moderators.

The goals of these master summits is to demonstrate best practices for removing pace maker and defibrillator leads as well as open up a dialogue regarding which types of leads should be removed in which types of patients.

This quarter we are also co-sponsoring a symposium at the heard rhythm society meeting entitled "Lead Extraction 2008: A critical review and implementation of heart rhythm guidelines." This symposium was developed under the offices of the Cleveland clinic and will feature a world class faculty. You can log into the heart rhythm society website for details of this very important symposium.

One goal of our lead management team is to demonstrate that the complication rate of lead extraction in centers using our lead extraction and system is very low in a broad variety of situations, including infection, malfunctions, and system upgrades. This month a paper published in the heart rhythm society medical journal based on the experience of the Bringham and Women's Hospital in Boston described their single center experience.

This consisted of 498 patients with 975 leads removed over seven years all using our clear system consisting of our laser sheet and lead locking device. The major complication rate was .4%. That's two major complications in 500 patients with no death and a success rate of 97.5% complete lead removal was achieved.

This landmark paper certainly demonstrated the safety and efficacy of removing pacing and defibrillator leads with our laser extraction system. This paper certainly supports the hypothesis of our lead management story.

In closing, I am very pleased with the progress we have made this quarter. We grew our top line and all of our products lines. We successfully completed the sales force split giving us significant market power and advanced our key clinical initiatives.

Our goals for the rest of this half are to accelerate enrollment in our three clinical trials, including Payton, Salvage and Tammy. We'd like to complete as least one business development deal that will either be a distribution arrangement or a bolt on acquisition using our existing cash resources and continue to execute as two separate sales organizations to grow the top line in both our vascular intervention and lead management businesses. I am very confident that we are well positioned to achieve our key goals for 2008 and beyond.

Now I will turn the call over to Guy who is going to provide some more color in our financial performance in the first quarter and will provide our financial guidance for 2008, and then we will open up the call.

Guy Childs

Thank you John. I am very pleased to report revenue of $23.8 million, up 37% compared with the 17.4 million during the year ago quarter. In flack compared with the fourth quarter of 2007 as expected.

Disposable product revenue was the most meaningful contributor to the growth and was up 39% on the strength of both vascular intervention and lead management sales, which grew 36% and 48% respectively.

On a sequential basis vascular intervention sales up $13.7 million were up $1 million or 8%. In lead management sales up of $6.4 million were down approximately $500,000 as expected and consisted with historical seasonality in this business. Within vascular intervention sales, our arethectomy business which includes laser arthectomy devices and the TURBO Booster products combined with our quick cross support catheters both contributed to the growth during the quarter.

Laser revenue was 1.7 million and an increase 56% compared with a year ago quarter and was down 22% from a very strong fourth quarter 2007. We are also pleased with laser placements of 24 during the quarter, which were in line with our expectation in compared with 34 placements in the year ago quarter.

On a geographic basis, U.S. revenue was $21.3 million, which represents 89% of worldwide revenue, an increase 38% on a year over year basis in 1% as compared to the fourth quarter of 2007.

Revenue outside the U.S. this quarter totaled $2.6 million which was up 35% compared to last year and down 10% on a sequential basis primarily on laser sales which was anticipated.

Gross margin for the fourth quarter was 72%, which was down from 73% in the year ago quarter and flack on a sequential basis. Operating expenses in the quarter were 18.5 million up 40% from the prior year quarter, due primarily to an expanded field organization, which now totals 111 employees as of March 31st, 2008 up from 79 a year ago, and 104 as of the end of 2007.

Within the 111, we have a total of 76 dedicated to our vascular intervention business and 35 to lead management business. We continue to expect in the year with the field sales organization of the range of 115 to 120 employees.

Of that total, approximately two-thirds will be supporting our vascular intervention business and one-third our lead management business. We also intend on expanding our sale organization outside of the U.S. primarily in Europe by 8 to 10 professionals in 2008 of which four were hired during the first quarter of 2008.

Pre-tax loss for fourth quarter - pre-tax loss for the first quarter of 2008 was $685,000 compared with pre-tax income of $165,000 for the first quarter of 2007 and pre-tax income of $628,000 in the fourth quarter of 2007.

I will close with some commentary on our annual financial guidance for 2008, which is unchanged form the guidelines provided on our fourth quarter call. We expect revenue for 2008 to be within the range of 104 million to 110 million. Representing 25 to 33% growth compared to 2007.

Gross margin is expected to be with in the range of 72 to 74%, research development and other technology costs are expected to be approximately 14 to 15% of revenue and SG&A costs are expect to be in the range of 55 to 58% of revenue.

Gross margin and operating expense cost may fall outside the ranges provided above at any given quarter due to factors that include, but are not limited to, timing and move related costs associated with the move of our manufacturing operations to an expanded facility, product development costs, clinical trial enrollment rates, and expansion of field sales organization.
...
continued

http://seekingalpha.com/article/73687-spectranetics-q1-2008-earnings-call-transcript?source=yahoo&page=-1

[buhg1b]

Wednesday, April 9, 2008
Medtronic settles Spectranetics suit
Minneapolis / St. Paul Business Journal - by Carissa Wyant Staff Writer

Medtronic Inc. has settled a lawsuit with Spectranetics Corp. over a technology used by Medtronic that Spectranetics claimed to have patented, media reports said.

Bloomberg News said that an attorney for Fridley-based Medtronic (NYSE: MDT) wrote a letter to a U.S. District judge in Austin, Texas, saying that a settlement was reached Monday in a case involving technology used for sucking deposits out of blood vessels, the heart and lungs.

The letter provided no further details of the settlement.

Colorado Springs, Colo.-based Spectranetics had alleged that Medtronic's Export XT 6F model aspiration catheter infringed on a patent it held for catheter devices that remove intravascular, pulmonary and cardiac obstructions.

[e-mail] | [phone]

[buhg1b]

22-Apr-08 Pacific Growth Equities Initiated Neutral

# Coverage initiated on Spectranetics by Pacific Growth EquitiesBriefing.com(Tue, Apr 22)

[buhg1b]

Spectranetics First Quarter Revenue up 37% to $23.8 Million, Driven by Strong Vascular Intervention and Lead Management Performance
Wednesday April 23, 6:00 am ET
Affirms 2008 Financial Guidance

COLORADO SPRINGS, Colo.--(BUSINESS WIRE)--Spectranetics Corporation (Nasdaq:SPNC - News) today reported financial results for the quarter ended March 31, 2008.

Revenue for the first quarter of 2008 was $23.8 million, up 37% compared with revenue of $17.4 million for the first quarter of 2007. Disposable product revenue rose 39% to $20.1 million, laser revenue increased 56% to $1.7 million, and service and other revenue increased 11% to $2.1 million, all compared with the first quarter of 2007. The increase in disposable product revenue was comprised of a 36% increase in vascular intervention product sales (including atherectomy products and support catheters) and a 48% increase in lead management revenue, compared with the prior-year first quarter.

The worldwide installed base of lasers increased to 767 as of March 31, 2008 (607 in the United States), which included net laser placements of 24 units in the first quarter of 2008, compared with 34 net placements in the first quarter of 2007.

Gross margin for the quarter was 72% of revenue, compared with 73% in the first quarter of the prior year. Operating expenses in the quarter were $18.5 million, up 40% from the prior-year first quarter due primarily to costs associated with the expansion of our United States field sales organization, which includes 111 employees at March 31, 2008, combined with increased product development and clinical study costs.

The pre-tax loss for the first quarter of 2008 was $685,000, compared with pre-tax income of $165,000 for the first quarter of 2007. Given the Company’s significant historical net operating losses that are available to offset future taxable income, any income tax expense or benefit is a non-cash item. As a result, management believes that pre-tax income or loss is the most appropriate measure of its operating performance.

For the first quarter of 2008 Spectranetics reported a net loss of $405,000, or $0.01 per share, compared with a net loss of $65,000, or $0.00 per share, in the first quarter of 2007.

Cash, cash equivalents and current and non-current investment securities totaled $53.4 million as of March 31, 2008, compared with $54.4 million as of December 31, 2007.

“We achieved significant sales growth both in our vascular intervention and lead management product groups, reflecting the strength of our technology and the continuing opportunities in these markets,” said John G. Schulte, President and Chief Executive Officer. “This strong performance also validates our decision to separate the sales force into two groups focused on vascular intervention products and lead management products. The split of the sales team, which we initiated in January, allows our sales representatives to more effectively build their business by concentrating on one set of products and call points.

“Our financial results to date are on track with our expectations, and we look forward to continued growth and improving profitability. As such, we are affirming the annual financial guidance we provided in February,” said Schulte.

2008 Financial Guidance

Spectranetics affirms the financial guidance for 2008 provided earlier this year, which is repeated herein for reference.

The Company expects revenue for 2008 to be within the range of $104 million to $110 million, representing 25% to 33% growth compared with 2007.

Gross margin for 2008 is expected to be within the range of 72% to 74%. Research, development and other technology costs are expected to be approximately 14% to 15% of revenue and selling, general and administrative costs are expected to be within the range of 55% to 58% of revenue. Gross margin and operating expense costs may fall outside of the ranges provided above in any given quarter due to factors that include, but are not limited to, timing of move-related costs associated with the move of our manufacturing operations to an expanded facility, product development costs, clinical trial enrollment rates and expansion of the field sales organization.

Pre-tax income for 2008 is expected to be within the range of $1.0 million to $5.0 million. The Company believes that pre-tax income is the most relevant measure of its operating performance given that income taxes are a non-cash expense due to historical net operating losses available to offset future taxable income. For that reason and the fact that significant fluctuations in the effective income tax rate are expected from quarter to quarter, the Company is not providing guidance on net income.

In assessing the Company’s financial guidance, Spectranetics’ management considered many factors and assumptions including, but not limited to, current and projected sales trend data; status, timing and progression of the Company’s product development projects; current and projected spending levels to support sales, marketing, development and administrative activities; anticipated timing and costs associated with the relocation and consolidation of its headquarters and manufacturing operation, and other risk factors discussed in Spectranetics’ publicly filed documents.

Conference Call

Management will host an investment-community conference call today beginning at 8:00 a.m. Mountain time, 10:00 a.m. Eastern time, to discuss these results. Individuals interested in listening to the conference call should dial [phone] for domestic callers, or [phone] for international callers. The live conference call will also be available via the Internet on the investor relations section of www.spectranetics.com.

A telephone replay will be available for 48 hours following the conclusion of the call by dialing [phone] for domestic callers, or [phone] for international callers and entering reservation code 43850304. The web site replay will be available for 14 days following the completion of the call.

About Spectranetics

Founded in 1984, Spectranetics manufactures and sells the only excimer laser approved in the United States, Europe and Japan for use in minimally invasive cardiovascular procedures. This technology treats complex cardiovascular conditions by photo-ablating multiple lesion types into tiny particles that are easily absorbed into the blood stream. The Company’s disposable catheters use high-energy “cool” ultraviolet light to vaporize arterial blockages in the legs and heart, as well as scar tissue encapsulating pacing and defibrillation leads. For more information visit www.spectranetics.com.

Safe Harbor Statement

This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such statements are based on current assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially. These risks and uncertainties may include market acceptance of excimer laser atherectomy technology, increasing price and product competition, increased pressure on expense levels resulting from expanded sales, marketing, product development and clinical activities, uncertain success of the Company’s strategic direction, dependence on new product development, intellectual property claims of third parties, availability of inventory from suppliers, the receipt of FDA approval to market new products or applications and the timeliness of any approvals, market acceptance of new products or applications, product defects, ability to manufacture sufficient volumes to fulfill customer demand, availability of vendor-sourced components at reasonable prices, unexpected delays or costs associated with the Company’s relocation and consolidation of its headquarters and manufacturing operations, and price volatility due to the initiation or cessation of coverage, or changes in ratings, by securities analysts. For a further list and description of such risks and uncertainties that could cause the actual results, performance or achievements of the Company to be materially different from any anticipated results, performance or achievements, please see the Company's previously filed SEC reports. Spectranetics disclaims any intention or obligation to update or revise any financial projections or forward-looking statements, whether as a result of new information, future events or otherwise.

cont'd...

http://biz.yahoo.com/bw/080423/20080423005332.html?.v=1

[Democritus_of_Abdera]

SPNC had two events this past week....

On Monday 3/17 there was a Citigroup Conference Call with SPNC Management (archived at 800-642-1687 (ID# 39021549) until March 24).

On Wednesday 3/19 there was a presentation to the Citi Investment Research Small and Mid-Cap conference which will be archived until April 2. see: http://www.veracast.com/webcasts/citigroup/smallmidcap08/23304185.cfm

As I see it, the main questions that SPNC needs to address are:

1. Is SPNC going to deploy its $30M+ cash on its balance sheet for a strategic purpose? If so, when and on what?

2. Is SPNC diffusing its effort or pursuing prudent diversification with its new initiatives?

3. Will TurboBooster live up to its promise with respect to revenue generation?

4. Is SPNC expanding its competitive advantage in the markets it serves?

5. Does SPNC have the resources and expertise to run clinical trials for all of the initiatives under consideration?

My take after reviewing the above two presentations is:

1. SPNC is hoping to make two deals in FY2008. They want to enhance their “Intervention Toolbox”. Apparently, they are looking at stent, sheath, balloon, and guidewire technologies, with a particular interest in drug coated balloons. They envision that their laser technology could be used to debulk in-stent restenosis and that followup with a drug-coated balloon would enhance the value of the debulking.

2. Diffusion of effort is a serious risk given SPNC's multiple new initiatives and aggressive growth strategy. They are actively involved in expanding their atherectomy footprint into large vessels using TurboBooster technology, expanding their lead removal business through lead management initiatives, introducing their laser technology for in-stent restenosis debulking, and, possibly, combining the use of their laser with thromobolytics to remove clots. All the while they are moving their manufacturing facilities and greatly expanding their sales force. If they decide to enter into direct competition with the likes of WL Gore, JNJ, or BSC through a strategic purchase, then I am inclined to withhold new investments into the company stock until I see how they handle the acquisition.

3. They have greatly simplified and refined the TurboBooster implementation through removing part of the slippery coating from the tip of the catheter and through simplification of the flushing technique. Hence, I think that the TurboBooster will live up to their expectations.

4. The move towards debulking of in-stent restenosis is a substantial enhancement of SPNC’s competitive advantage over both FoxHollow (EVVV) and CSI.

5. I think that SPNC has the expertise and resources for clinical trials needed to meet 510(k) criteria. But, if they expand into trials that combine a thrombolytic agent to their catheter flush or that use a followup drug-coated balloon, they may find that PMA approval is beyond their resources or expertise.

In summary, I'm remaining on the sidelines until I learn more about their acquisition strategy.

[Democritus_of_Abdera]

Declining Atherectomy Share of PAD Market...

I was disturbed by the revelation in last week’s EV3 conference call that “the market for atherectomy is not growing as fast as the PAD market, it’s growing slower”. Admittedly, total atherectomy procedures are increasing, but a decline in the market share might be a leading indicator for upcoming pressure on SPNC’s revenue growth.

It was argued that physicians are questioning the maintenance of longterm arterial patency after debulking. I think that this argument has merit. It was raised in a recent review by Jason Rogers and John Laird (Circulation 116:2072, 2007) in their overview of technologies for lower extremity revascularization. They pointed out that primary patencies one year after eximer laser atherectomy (33%) are disappointing. Whereas, nitinol stenting patency rates were characterized as good. These authors are consultants for all of the major players in the revascularization market and probably have a good understanding of the major issues.

As background, the exchange in the EV3 conference call was as follows:

<Q – Jason Mills>: A question on the peripheral vascular market, specifically atherectomy market, clearly there was an impact in the quarter from the inventory issue and you’ve given us some good details with respect to how much that is directionally, but if we look at the market overall just with respect to what you’re reporting, what Spectranetics reported and then what we know CSI reported from their S-1. It looks like sequentially it was down around 15, $20 million in sales through those three companies in a quarter sequentially we expect fourth quarter to be better than the third. So I’m wondering can all that be explained away by the inventory issue or do we have sort of a deceleration in PAD market growth as it relates to atherectomy? And if so is that acute and sort of what drivers do you expect to see in the market that would get us back to relatively decent growth in the atherectomy market?

<A – James Corbett>: .... Secondly, if you look at the Spectranetics’ report and you look at the S-1 filed by CSI, if you look at – and we look at our analysis and fortunately for us we get to see all that data and we’re the only ones. What I can say is the market is for atherectomy is not growing as fast as the PAD market, it’s growing slower. And our research is very crystal clear about it. It’s all about the clinical data. They want long-term patency data and they want high-quality clinical trials and no company has actually run any yet. ....

<Q – Jason Mills>: Yes, that’s hopeful. So if we put some numbers to that, Jim, are we looking at a procedural growth in the PAD market? You mentioned you wanted to go referral marketing, perhaps this would be a question that you could do that within? Are we looking at a procedural market that’s still growing sort of 15 to 20% with the inventory issue and perhaps the lack of clinical data we have in atherectomy market that we should think about in terms of sort of 10% growth, something less than that 15 to 20% growth, am I hearing you right on that?

<A – James Corbett>: You really are. The PAD market broadly is in the mid-teens or up and the atherectomy market is less than that. Yes, you are hearing me correct. ....

[Democritus_of_Abdera]

SPNC Strategy: Maximize Debt-Free Growth

After listening to the Feb 20,2008 CC, I have come to the conclusion that SPNC is singularly focused upon maximizing debt-free growth. This focus drives net operating cash flow and earnings to zero. The zero’d earnings are likely to persist for some time largely due to the cash flow needed to support clinical trials.

Highlighting this imputed strategy is the following statement from the CFO’s (Guy Childs’) prepared remarks: “For the full year we were essentially break even based on cash flow from operating activities accomplishing our objective of becoming self-sustaining on an operating basis.”

Frankly, I am excited by SPNC’s technology, its market, and the relative weakness of its direct competitors. But, I am no hurry to invest in this stock this quarter, largely because the guidance given in the CC is that “pre-tax income for 2008 is expected to be within the range of 1 million to $5 million ... [with the] a pre-tax net loss in the first quarter of approximately $1.5 to $1.8 million based on the committed costs noted previously in the call and the fact that expect first quarter revenue to be flat to slightly down as a result of lower laser revenue mentioned previously and typical seasonality in the first quarter of the year.”

This stand-back attitude might change if the price drops to absurdly low levels, the direction it seems to be headed. In the interim I am happy to reap the rewards of SPNC’s growth in disposable catheter sales through my investment in SRDX which recieves a royalty for its catheter coating technology (see #msg-25521042).

[Democritus_of_Abdera]

CSII as competitive threat to SPNC ...

In SPNC’s Q3 2007 Earnings Call (Oct 31, 2007), the following exchange occurred in the question and answer session:

<Q – Amit Bhalla>: .... Can you kind of talk a little bit about what kind of impact you’re seeing from competitive atherectomy players in the market, if at all? ....

<A – John Schulte>: .... As you know there is a new atherectomy competitor, CSI, which received approval in the third quarter. It’s a rotational atherectomy technology that’s focused primarily on the lower leg, and it’s limited in artery diameters from about 1.5 or 2 millimeters up to 3.5 millimeters. As you are well aware in this field, physicians are anxious to try all types of new technology, whether it be atherectomy or stenting and whatever, so certainly a trialing will take place and everyone kind of knows who the top volume physicians are for treating below the knee disease, so certainly they will get some trialing. We believe that any impact that we might have, we think will be temporary for a number of reasons. Any technology to gain long-term traction has to demonstrate that it performs well in terms of four parameters: Outcome, safety, ease of use and cost. We think that our atherectomy technology has by far the best clinical data as it relates to both LACI and the recently published Cello data. We think we have a very strong safety profile with, I think, the acknowledged lowest disembolization rate of virtually any atherectomy technology. In fact. even lower than balloons and stents. In terms of ease of use, the only technology that can do thrombus through calcium and the ability to treat arteries ranging from as low as 1.5 millimeters up to 7 millimeters in diameter and in some cases with a new TURBO-Booster with a single catheter. So we think there’s a high cost effectiveness advantage in our favor as well. So that being said, I also believe that the more atherectomy companies that there are in the market, the better it is for all of us. We estimate that atherectomy represents only about 20% of all endovascular procedures in the leg. And my guess is that if we can demonstrate solid clinical benefits atherectomy could represent as much as 50% of all endovascular procedures. So the more companies that are preaching the benefits of tissue removal, the better it is for all of our companies, and we feel confident that we can share the advantages of our atherectomy technology over other atherectomy technology. ...

I agree with John’s assessment that the impact of CSII will be temporary, but for a different reason. I think that CSII is entering the field too late to be a competitive threat to SPNC on the basis of price and convenience, the only advantages that I believe that CSII’s Diamondback technology might have over SPNC’s TurboBooster. By the time CSII comes up to speed, SPNC will have enough CVX-300 lasers in place to be able to offer volume discounts if price becomes an issue. I believe that physician experience with and the demonstrated efficacy of the TurboBooster will trump any incremental advance in convenience that the Diamondback might offer.

A detailed understanding of CSII’s current corporate stature can be found by reading its Prospectus filed on Jan 22, 2008 (see http://www.sec.gov/Archives/edgar/data/1222929/000095013708000782/c21812s1sv1.htm ). <You might need to copy and paste this url if the last section is not transferring upon a direct click.>

In my opinion, the key issues are:

1. The management team at CSII is new and the company is under-staffed. For example, David Martin is currently CEO, CFO, and President of CSII. He joined CSII about 1 year ago. He is no doubt very talented having been both COO and Executive VP of Sales and Marketing of FoxHollow Technologies, but a company needs an independent CFO to add balance to the corporate structure. The sales and marketing team has increased from 6 employees at the beginning of 2007 to 29 employees in December 2007, but they will need to grow further. And, CSII plans to manufacture Diamondback in-house. They have limited commercial manufacturing experience and no experience manufacturing this product in the volume that they anticipate will be required to achieve planned levels of commercial sales. The manufacturing enterprise must meet FDA Quality Control Standards, not an easy task unless experienced people can be hired.

2. CSII will need to expand its authorized use of the Diamondback. The Diamondback currently has 510(k) approval for PAD; it is not FDA-cleared or approved for treatment of carotid arteries, coronary arteries, within bypass grafts or stents, of thrombus or where the lesion cannot be crossed with a guidewire or a significant dissection is present at the lesion site. CSII plans to seek a PMA to use the Diamondback 360° in treating patients with coronary artery disease, but this will take several years to accomplish in my opinion.

3. Continued funding of operations will be a chronic headache for CSII. They will recieve about $85M from their planned stock offering, and they expect these funds to last more than 12 months. However, the Diamondback is not generating sufficient revenue to yield a positive net operating cash flow in the forseeable future, implying that additional funding will be required. In the past CSII has resorted to convertible preferred offerings and the holders of these convertible shares have a substantial presence on the current Board of Directors. I think that if times get tough, CSII may be forced into toxic financing schemes and a possible corporate death spiral.

[I-Man]

I know this stock and owned it once. In fact I owned it when I lived in Colroado Springs, CO years ago and it was a penny stock (OTC) then and many laughed at me for buying thousands of shares in the pennies then. Now their excimer laser is used globally in many applications.

Now, on another related note, is I have been watching another OTC that reminds me excatly of this stock, and that is RBRM and a specialized medical device manufacturer who consistently has increased sales and earnings and growth month after month, but is not yet on the lsited Nasdaq exchange, and are going through another expansion right now. But that stock has literally been shorted to around 4cents and is a steal. The CEO made an interview the other day on WallStNet.com and SPNC came from the same exact place as RBRM and wanted to pass this on to others looking for anoth SPNC type firm.

[konnikov]

I opened a pos yesterday at 10.10. I like the numbers and i just love risk/reward: with sopport at $10 (my stop loss is $9.50) and the next resistance at $13 it is 1:5 - 1:6.

[Hanahoe_PC]

I opened a position in this stock at the end of March 2006.
Their Excimer laser technology delivers relatively cool ultraviolet energy to ablate or remove arterial blockages including plaque, calcium and thrombus. The Company claims its CVX-300(R) excimer laser is the only system approved in the United States, Europe, Japan, and Canada for use in multiple, minimally invasive cardiovascular procedures. These procedures include atherectomy, which is a procedure to remove arterial blockages in the peripheral or coronary vasculature, and the removal of infected, defective or abandoned cardiac lead wires from patients with pacemakers or implantable cardiac defibrillators, or ICDs, which are electronic devices that regulate the heartbeat.
To put it in simple terms, their technology is enabling patients who would otherwise need to have amputations to avoid such surgery. Diabetics are particularly vulnerable to such surgery and 85% of which may have been unnecessary.
In June, SPNC was ranked 56th on Fortune's Small Business 100 List of the fastest growing small companies.
Check out the news releases at…
*ttp://investor.spectranetics.com