SPORT19, I initially shared that same concern. But as I kept re-reading the PR, I could not come up with any logical reason for Medtronic to be making payments based upon completion of development milestones which are to be overseen by Medtronic and Titan together.
If they merely wanted to raid the technology, that's basically already done; they just need to write the last couple checks. They instead want oversight into the development process and achievement of certain goals. If Medtronic just wanted rights to the technology, well, they have it. The license NOW means they can try to incorporate some of Titan's technology into their own multi-port design as well as oversee the creation a single port platform of their own, and the exclusivity of the license means Titan can't go out and license it to anybody else as well. Don't you think ISRG would also love a camera wash system, two-camera deployment, and snake arms that don't need to cross over each other inside the patient? There is still huge value in our patent portfolio, and Medtronic has basically locked it in for themselves.
Why would Medtronic want to guide and provide oversight into the additional development process if it was only for Titan to go it alone and compete with Medtronic? Helping Titan would be like Medtronic shooting themselves in the foot by helping their eventual competitor. The oversight is to ensure the development process creates an end product which is to Medtronic's liking and meets their marketing objectives, taking a pre-determined place in their product lineup.
Other than maybe shorters and other folks out here bashing the company and spreading fear-mongering conspiracy theories which actually don't hold up to further scrutiny, I cannot explain the ridiculously low PPS at the moment. There appeared to be some sort of PPS suppression going on at the time of the MDT announcement in order for the closing to occur within the allotted percentage of PPS, but beyond that... As FlyBabyFly pointed out, the interest rate on borrowed shares is absurdly high, indicating the popularity of this stock for shorts - and the apparent continued profitability for them because they are willing to pay it.
Medtronic's oversight of Titan's development process can only be explained by the idea that Titan is developing it from here forward FOR Medtronic, otherwise Medtronic would not expend the resources to monitor the development process, the Board Meetings, etc. to help develop the competition. This is a done deal except the passage of time to achieve the milestones, and an eventual announcement.
As for why the buyout wasn't effective immediately, I can only conjecture, again based on logical inference and decades of medical device development experience, that it would be foolish for Medtronic to start from scratch on developing this single port platform when Titan already has intimate knowledge of it. They are a resource for Medtronic's development program. Another way to view it is that Titan is basically being kept whole for now as a develop contractor for Medtronic because of their knowledge and experience with this technology. It's a big time saver for MDT, saving them valuable months or even years if they tried to take over this program themselves. They want to get this, heck, ANYTHING, to market as soon as possible, and their Hugo program showed that product development isn't really their strong suit in this realm. Mr. Martha apparently knows this, and that is likely why he has announced the plans to go heavy on acquisitions.
It's just a waiting game; I try to ignore the games being played with the stock (which is very difficult to do) because I know eventually it will break free. I have repeatedly used the phrase "Excruciating Patience" when discussing Titan. Meanwhile, a nice PR here and there about development status, revised timelines, etc. would go a long way to support shareholder morale, especially if it also helped PPS.
I don't know for sure what your status is as a shareholder - shorting, holding, all in, all out... but you have a boatload of time and energy in this stock, this company, this message board... We haven't always seen eye to eye, but I still hope you are all in when it does finally take off.
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Closed at .805
Down another 5%
Has Medtronic commented on this deal with Titan? No
Go back and read the PR. I’ll post it for you...you can see why this is falling back....they wouldn’t need a license if they were buying the company.....
Titan Medical Announces Development and License Agreements With Medtronic and Senior Secured Loan
June 4, 2020, 7:30 AM EDT
TORONTO--(BUSINESS WIRE)--Titan Medical Inc. (“Titan” or “Titan Medical”) (TSX: TMD) (Nasdaq: TMDI), a medical device company focused on the design and development of single-port robotic surgical technologies, announces that it has entered into a development and license agreement with Medtronic plc (“Medtronic”) (NYSE: MDT) to further the development of robotic assisted surgical technologies, as well as a separate license agreement with Medtronic in respect of certain intellectual property of Titan.
The development and license agreement provides for the development of robotic assisted surgical technologies for use by both Titan and Medtronic in their respective businesses. Titan will receive a series of payments totaling up to U.S. $31 million for Medtronic’s license to such technologies, as technology milestones are completed and verified. A steering committee comprised of representatives from Titan and Medtronic will be established to provide oversight regarding the work toward achievement of the milestones.
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