Replies to post #43421 on Biotech Values

[rsox]

since this board is dedicated to biotechvalues i just want to acknowledge the two excellent value picks i cherrypicked off this board. the science you all talk about is great but the stock share price appreciation is what its all about.

CAMH has deffinitely been the best biotechvalue pick i have found on this board, kudos to the poster who brought it forth, my other find thanks to randychub was AMLN during the summer when they drove it down to 15...

[Nerf]

CAMH- rebuttal to Dew:
STJ will have no incentive to sell to the implantation specialists themselves. In fact, STJ has a strong disincentive to do so.

AU Contraire- the ICD industry is in bad shape. With all the recalls and all the stories about inappropriate shocks, both the public and the insurance industry will demand more stringent screening before they pay for a $50,000 plus procedure which has been shown to be improperly done at such a high rate historically. Their low ejection fraction criteria has been shown to be absolutely dismal in predicting who actually will benefit from this. Now, with MTWA showing such a high positive and negative predictor (maybe not absolute terms but MUCH higher in both cases than ejection fraction is) they can open this screening procedure to everyone who gets a stress test.....

CAMH raised 2007 sales guidance by a paltry $2M on account of the deal! They say there will be a large sales uptake in the second and third years but, if this is such a great idea, why will the uptake be so slow?

a)they raised from 12-14 to 14-16 MM. Delta2/13 (averages) is 15.38 % raise, and low to high is 33%. In who's world is a first year production ramp increase of 15-33% "paltry"? First year production ramp means that instead of a minuscule company trying to break into and change the whole paradigm of a 30B a year industry they are now being incorporated into the industry by a major player.....yes this is first year....
b)they always have under-promised from a historical standpoint firstly, and secondly to promise anything more that 15% to 30% rise due to a 3 yr marketing agreement would be financial suicide. There's just no upside to say "we predict 50% revenue growth this year!" Then they would be accused of pumping!

Since the deal is exclusive in North America, CAMH may now get less help from the other ICD players, MDT and BSX.

CAMH currently gets no help from anyone in the ICD industry. In fact they've been blackballed since day one by MDT.

My take from the CC is that CAMH will be paying a hefty commission on each unit sold by STJ, perhaps as much as $8-10K. (The actual amount hasn’t been disclosed.) Of course, this will be well worth it if STJ really increases volume to a meaningful degree; however, if the volume increase is modest, CAMH won’t be any better off than it was on its own. CAMH will only be paying an equivalent sales commission (or less) than it would to its own sales force. The GM's are going to be consistent with what they've been except now they've got 2000 reps with information and incentive to sell these machines. Instead of 13. Or whatever.

The CC had more than a modicum of hype, and I find this troubling.
I think you're confusing hype with excitement. They've finally (justifiably- no less )broken into an industry which tried to keep them out for years. Not less significant to this is that partial acceptance into the cardiology world cannot be possible. Stress testing (conventional) is not just available at some diagnostic centers, it's ubiquitous. Now, MTWA will be as well.

All IMO, but we'll see. Re-rebuttal obviously welcome, Dew. All respect intended in this post. You're very astute, IMO.

Nerf