I fuly agree. But we also need to keep in mind what deal is more like our situation. Mazor had a robot, much more limited scope and application that Titan's. Aurys Medical had a robot, much more limited in scope and application than Titan's. Mazor went for about $1.7B. Aurys went for $5.75B with milestones to be met, but $3.4B up front. That was only a year after Mazor, and 2 to 3.5 times the price for technology that really probably had similar value to each other.
Now start looking at the annual revenues generated by lung biopsies or certain spine surgeries, and compare to annual revenues for general abdominal surgery. Some ballpark numbers from various sources around the web:
70,000 bronchioscopies with biospy, avg. $3700 ea, $277M/yr revenue.
1.6M spine procedures (I didn't research how limited the Mazor equipment was or what percentage of spine procedures can be performed with it)at $14k/ea avg. = $22B/yr revenue.
5M Laparoscopic surgeries/yr at $13k ea = $66B/year.
Obviously JnJ wanted Aurys for more than lung biopsies!
The point is that the value of our end market is so much larger than for these prior buyout deals. There should be a premium placed on market potential.
There should also be a premium placed on time. Spine is a much larger market than lung biopsy but Aurys went for 3.5x what Mazor sold for, only a year later. If we don't close this for another year or two, value should just keep going up with time.
That being said, one could envision an ultimate buyout price in the $12-$20B range on the higher end, or the mid-range you speak of should really be more in the $6 to $10B range.
And if there's any other interested parties, the sky's the limit! (But I personally don't think the sky is over $20B... even if other math substantiates that potential. I'd be really happy with $5B!)
Message in reply to:
Great news that Medtronic is involved and TMDI's outlook has improved. I hope we get to a $5 B buyout at some point but there are a lot of other possible conclusions to our investment journey with TMDI that are less fruitful. A balance of scenario discussions would allow for a better understanding of what we may be in for. I think we end up somewhere in the middle of the extreme negative and positive sentiment but one never knows until the ink dries.
