Moon – I understand the perspective, but also consider a few other matters:
The argument offered suggests that Xenex has good marketing capabilities. While better than MZEI’s, as we have none, their capabilities are unknown.
Government withholding of HAI reimbursement expenses has only been going on about a year now. Prior to then, hospital administrators weren’t all that economically motivated to employ such technology. This may be the basis for Vince’s golf partners stated view and may be causal to a slow product rollout for Xenex.
The 400 or so Xenex customers may well be a prime marketing target as they have already made the determination that HAIs are a problem. Once real-world comparative data has been developed, the sale to them would seem easier than for a client requiring a greater amount of education. Developing such data should be a priority.
Some of the Xenex testimonials show 50%+ HAI reductions. The longevity of such is unknown. Considering, as Dr. Shannon stated, that Xenex’s effectiveness is reduced by the inverse of the log squared for a given increase in distance from the Xenex unit to the target bacteria, as well as line of sight issues, it’s clear why AS is more effective. As such, AS should, when protocols are developed, be able to exceed the HAI reduction figures published by Xenex and therefore, be able to demonstrate a greater proportion of cost avoidance associated with this $40B US problem --- hence, drive a higher valuation.
How excited might Xenex’s VP of marketing be to join a new leadership team at MZEI? This person knows the customers, knows the objections and how to address them, knows how to make the sale, and will soon know he/she currently represents an inferior product.
Frankly, I see the existence of Xenex as something of a benefit to MZEI as they have cut the first path in the bacterial eradication wilderness. Will any new management at MZEI see it similarly?
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