Replies to post #43159 on Titan Medical Inc (TMDIF)

[investinthefuture]

Do you mind expounding on this? I'd like to hear what you think a "decent sum" will look like and what do you mean by "and the rest of the upside will be realized in the acquirer."

Right now, our market cap is at about $80M US. If Johnson and Johnson, Medtronic, Stryker, Baxter, etc tried to take $80M and build out a surgical robotics platform from a clean sheet, they wouldn't be able to do it. So, as a lower bound on what Titan is worth from a valuation perspective, I think you'd have to take a look at the value in the "shortcut" that you get in buying SPORT from them. I personally think that shortcut is worth between $200-250M, or about $1.70 per share.

Next, you have to consider the value of the intellectual property that Titan controls. While Titan does not own the patents for the insertable robotic effector platform (Columbia licenses this to them). they DO control patent 8,224,485, which is for "Snaking robotic arms with movable shapers." IMHO, this patent is extremely important, because it essentially prevents competitors from using snake arms in a surgical robot as long as Titan holds this patent. IMHO, this is one of the aces in Titan's poker hand right now.

The other ace in their full house is patent 8,347,754, which is for Multi-articulating Robotic Instruments. While the first patent covers snake arms, my interpretation is that this patent much more broadly covers robotic instruments that bend in more than one place. I have speculated for a while that this patent is the thorn in Intuitive's side that is preventing them from bringing their daVinci Sp single port platform to market.

As far as the "three of a kind" in Titan's full house, I would point to these three other things:

1. The shareholder rights agreement that was passed in May 2015 prevents marauders from a hostile takeover of the company, the patents above, and the engineering work that has been done by Ximedica on SPORT

2. Even though many of us feel burned that Titan has financed the company on the backs of shareholders, this has resulted in us having NO DEBT on our books. Even if Titan ran out of money, there is really nothing forcing the company to sell its IP to anybody. I do *not* want to see the company reach this state, but it's possible for the Board to just fire everyone, pay the annual fee to remain incorporated, and sit on the patents and engineering work until someone makes a reasonable offer and buys out the shareholders.

3. No one else (that we know of) is this far along with a general robotic surgery platform.


With regard to my comment that "the additional upside will be realized in the acquirer"...that is to say that if someone came in and bought the company tomorrow for cash, there isn't any reason that we couldn't then buy shares in the acquiring company and ride that uphill as they break into robotic surgery. For example, if JNJ bought Titan tomorrow, finished SPORT, and then commercialized the platform, I don't see any reason why their stock price wouldn't react accordingly with an entirely new revenue stream generated by the platform.


All of this assumes that our "poker players" know what they're doing, of course. But if they play their cards right, I think that Titan has enough right now to get acquired for between $750M-$1.5B ($5.10-10,20 share) considering the IP and the relative maturity of the platform.

Full disclosure: All this is just my opinion, and assumes that everything that we know about Titan publicly is the "whole" story.