Reply 129256 Liv, it's all about MDT's next move. What MDT does based on both the development agreement and loan provisions time lines are indications of their intentions. MDT either does something before the end of Milestone 4 and before the loan payoff, or their inaction comes dangerously close to opening up TMDI to competitors.
All TMDI can do is continue to develop Titan Medical USA, and ROLL up the IP. The more IP they ROLL up and any additional proof of the lab's abilities to make RAS med devices from thought - the more valuable TMDI becomes. TMDI is way past the value of Mazor (IMO).
All it takes is for MDT to be stupid and let the development agreement lapse after the 4th milestone, AND.... TMDI pay off the loan. If TMDI doesn't pay off the loan, then we have our answer because it would be a blatant declaration by TMDI.
Raise hands. Who thinks MDT is stupid? There are no limiting factors to keep TMDI from considering another offer. It would be catastrophic for MDT, as they have licensed 14-16 of TMDI's patents, and don't have the know how to complete a product as far along as ENOS with a short development time line. IDT 14-16 patents is enough IP to develop a snake-arm SP RAS device with adequate protection (IMO). I really don't know if it can be done. Best guess - it would take at least another $300M-$400M and another 4-5 years WITHOUT TMDI'S KNOW HOW, and experienced 3rd party resources. So who wants to go before the BOD at MDT and say "I think we can do this with what we have AND another +$400M and another 4-5 years." Not a great career move. Let's face facts both MDT BOD's and Martha have reputations to build/uphold. No one wants to be included on the Strategic Blunders list in the Corporate Strategy classes at Harvard, Northwestern, Wharton, MIT, Chicago, Columbia, Stanford, etc. Which is why buying TMDI makes all the sense in the world for MDT and Martha's reputation. It's all in front of them if they'll just make it happen. ENOS - for what it can do, the creativity and how it's designed, and Titan Labs are ALL tangible products. IMO.
What if TMDI did get another offer, and accept? Then MDT would have to watch for the next 20-40 years as TMDI or the parent company ROLLS in the revenue. Which F-W-I-W is the exact opposite of what Martha proclaimed earlier this year. HE HATES COMPETITORS GETTING MARKET SHARE AND MARKET SEGMENT REVENUE. MDT's here b/c of the fact that ENOS is so unique IMO.
Best scenario: Have MDT extend the agreement, add $50M-$100M cash to TMDI coffers, have ISRG and Wall Street accumulate TMDI stock and watch the sp go up past what MDT estimates the value of a BO should be. Just like the Mazor deal. It went to 70 before settling the final BO sp. Does anyone think Wall Street will permit another major RAS BO and not participate? Those major funds, and BO firms will be communicating with TMDI eventually. There's nothing against the law to submit an unsolicited proposal. Does anyone think any of the funds, or major shareholders that have owned, or do own ISRG will ignore the chance to climb the RAS sp ladder again? I hear my Statistics Prof in my ear again. "Highly unlikely."
So the ONLY way to prevent the sp from going way beyond MDT's BO expectations, would be to execute the BO early b4 the sp gets out of hand. Regardless, I still think ISRG and Wall Street (and others) will try to drive the sp higher and make it very expensive to do the BO at MDT's more reasonable estimated value. Wall Street is greedy and I don't think ANYONE on this board would/could argue otherwise. Is spite of their best efforts to talk around sp escalation, greed is good. IMO.
Good luck to all. Regards, BK
