I have just watched the AGM again and it was as enjoyable the second time as it was the first. What a great opportunity we have in front of us and the best part is that the share price is not reflecting any of it. There are so many companies who have little or no revenue and who's prospects / technology are not as good yet they have market caps far in excess of ours.
This stock always had all the right ingredients, it just never had the right chef. Given some time in the oven now under our Master Chef Wayne Paterson I am positive we will all be happily fed from this company for years to come.
I have been giving some thought to the TAVR announcement and the cessation of the Aortic Heart Valve Reconstruction Study. Some on here more knowledgeable than me can maybe shed some more light on this. I thought we were trying to compete with the TAVR market by reconstructing valves rather than using a prosthetic valve and that this study was meant to show the success of this. Am I right here?
I draw some possible conclusions from this. Maybe the market (Surgeons) are not ready to use CC in this way just yet to an extent where it will move the needle for us. As TAVR is fairly new and appears to be the "disruptive" technology being accepted, maybe we have seen a quicker route to market with a potentially superior product given the inclusion of our ADAPT tissue as the main competitive advantage. This is a seperate 5 BILLION DOLLAR market.
Given our life cycle stage and our laser focus on "near term" revenue opportunities WP must see significant upside opportunity to be investing in the development of this device. With some ex Medtronic guys on board assisting with the project it is exciting indeed.
However, I would imagine that there would be additional risks in developing the engineering that goes along with this. I am also unsure of time to market and when we may see revenue. However, this is in our area of expertise and we have the number one core ingredient so why not try and shake up the market a bit?
I can see a time in the future where we split the business and the Adapt portfolio is worth over a billion dollars on its own and the likes of Edwards, Baxter, St Jude's, and Medtronic placing competing bids to own us. Just think what our superior technology and IP would be worth in a company those with their existing distribution models and customer bases and the the R & D they could pup into multiple product development.
The other thought I had was around VascuCel and the withdrawal of Baxter. If Wayne is correct and Baxter had the "Lion Share" of this market before withdrawing that really does create a golden opportunity for us. It is also intersting that after losing Scott Bliss they pulled the pin. He could obviously see that their product was doomed and having issues in the market and decided to join the real deal. So glad to have him on board and his expertise is what we need to allow us to move up a gear and supply larger markets.
Regarding the issue of head count. In discussions with WP it became clear to me that we will not be able to accelerate CC and VC growth without additional sales reps. There is only so much you can do with 50% less reps and we have done an outstanding job so far given this hurdle. The fact that we reduced head count IMO was two fold. One was we desperately needed to reduce cash burn and the other reason was we had the wrong people not doing a good sales job and costing us money rather than making us money. As stated by Wayne a good sales rep should be cash flow positive after 6 months. Therefore, don't see it as a negative and more additional costs when you start to see more sales reps being hired. This will be a big plus for us and a forward sign of growing revenues in a sustainable and CF positive manner.
The other exciting prospect is that the company is more open to engaging 3rd party distributors for emerging markets. Chosen wisely these distributors can be an excellent low cost way of getting market share. I even wonder if the soon to be announced appointed distributor for India will pay us an up front fee for the previledge of distrubting the best patch on the market to their customers. What's more, now that we have 3 solid products and the curved arch Aortic repair patch to be added in December 3rd party distributors have a lot more to work with and more incentive to want to sell our world class products.
For those interested in learning more about TAVR I found the article below and video within it to be useful. Exciting times ahead.
(20min delay)