My dentist friend believes that a $20,000 price point for this device would be appealing enough for at least a 5% penetration in existing practices, specifically those that are modern and technology oriented (which would be in line with what Lantis is projecting). The ability to have the image available real-time by the side of the chair could help the dentist sell more expensive treatment plans since it should be easier to show the patient exactly why the dentist is recommending a certain course of action.
In "scratch start" practices, where all the equipment needs to be purchased to outfit a new office, the OCT should have significantly higher penetration since it would not be too much more expensive choosing a new OCT device at $20K over a new X-ray machine at about $12K+ when you are already spending about $200K or more for a typical four chair buildout.
To me the questions regarding the feasibility of Lantis as a good investment involve learning:
1. whether the company can hit that price point once the units come to market;
2. whether the units can be produced and distributed at a cost that still leaves a reasonable profit margin, especially after royalty or licensing payments are made back to the original patent holder of the OCT technology;
3. whether the possibility exists for another technology or a "knock-off" to cut into the market at a lower price point for similar performance.
P.S. - I am also long LNGT from about the time the JV with Lantis was announced, but am much less confident about that investment and feel it's an even more speculative play.
Disclaimer:
Everything expressed herein is my own personal opinion and is not intended as a recommendation to buy or sell any stock.
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