optiscan imaging receives 2.6m, page-3

re: intersuisse optiscan imaging receives 2.6m MORNING NOTES YESTERDAY from Intersuisse (I hold CIR)

Optiscan Imaging (OIL)
Multi-centre trials to begin later than expected, but the overall proposition remains compelling
Speculative Buy
$0.45

Event

*Business Summary*

OIL is a world leader in microscopy technology. Pentax is now poised to roll-out a miniaturised version of the core technology incorporated into flexible endoscopes, the primary instrument used by gastroenterologists. In time the technology is likely to be used in other applications. The company is well funded and the technology convincingly validated, however until there is meaningful evidence of sales traction the stock remains speculative.

*Key Financials*

OIL's FY06 product sales revenue trebled to $3.23m, while total revenue, which includes royalties, interest and grants doubled to $5.63m.

The net loss after tax decreased 25% to $3.9m.

Royalty revenue increased 23% to $1.5m due to infringement settlements as well as ongoing royalty income.

R&D expenditure fell marginally as OIL progressed to product release.

Impact

Commercialisation of the ISC 1000 is around six months behind original estimates.

There is nothing to suggest the technology is encountering any issues. On the contrary, studies/reports continue to suggest it represents a major advance.

Importantly, in addition to its functional superiority, it is likely to also deliver cost benefits.

Prepared by Peter Russell

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