Aspect Medical To Repurchase Shares From Boston Scientific
by Steven T. Gold
BioHealth Investor
Aspect Medical’s (ASPM) sells an anesthesia monitoring system, the BIS system, which is used primarily in the United States and according to the company in 75% of the top hospitals. The BIS system provides information that allows clinicians to assess and manage a patient’s level of consciousness in the operating room, intensive care, and procedural sedation settings, as well as assists the clinician to determine the amount of anesthesia or sedation needed by each patient. It is utilized by anesthesiologists in multiple medical settings.
Aspect Medical had a busy day of news on Monday and is scheduled for a conference call Tuesday morning. Perhaps most interesting was that it “agreed” to end its strategic alliance with Boston Scientific (BSX). At this point it is unclear why the parties “agreed” to end its partnership and alliance. In its press release ASPM stated it was ending both a 2005 neuroscience strategic alliance with BSX and the 2002 original equipment manufacturer product development agreement with BSX. While anxious to hear the reasoning for the “breakup” hopefully announced in the call Tuesday, I do like that ASPM thinks its own stock is cheap (its P/E is hovering around 10) and says it will immediately buy 2 million of its shares now held by BSX for about $15.91 per share and retain the option to purchase the remaining 4 million shares over the next six months. APSM does not want its stock price hurt by BSX unloading its stock. BSX owned about 27% of the company prior to the ending of the alliance. One major concern I have is why does BSX want to unload all its APSM holding upon the ending of this alliance? What happened with the alliance? Does BSX think the stock is worth less than the current market price? BSX certainly does not “need” the money to pay its bills.
In other news APSM raised its guidance and provided an update regarding two abstracts presented at the Alzheimer’s Association International Conference. The abstracts report on interim results of two studies that are investigating use of the company’s brain assessment technology to evaluate cognitive function in elderly patients. According to the release, the interim results are consistent with previous findings that APSM’s EEG-based biomarker correlates with standard measures of cognitive performance. According to ASPM this suggests that the EEG-based biomarker can provide information that may be helpful in determining which patients with Alzheimer’s in the normal to mild cognitive impairment range are likely to experience cognitive decline. While not an overly positive press release, ASPM seemed to convey that the interim results are as expected and remain hopeful for further confirmation of the results in the future studies.
RELATED READING:
- Boston Scientific Begging For Good News
- The Never Ending Saga Of Bypasses And Stents
BioHealth Investor.com
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Steven T. Gold, Esq., is a graduate of Yale University (B.A.) and the University of Florida (J.D., M.P.H.). Presently, Steve is working as an attorney while enrolled in a Master of Bioethics program at Penn. Steve is knowledgeable in the fields of public health, managed care, ethics and biotechnology. He is an avid and experienced investor who is presently starting a subscription newsletter and alert service, www.mentallystableinvesting.com. Steve will be a regular contributor to Biohealth Investor.
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BioHealth Investor
Aspect Medical’s (ASPM) sells an anesthesia monitoring system, the BIS system, which is used primarily in the United States and according to the company in 75% of the top hospitals. The BIS system provides information that allows clinicians to assess and manage a patient’s level of consciousness in the operating room, intensive care, and procedural sedation settings, as well as assists the clinician to determine the amount of anesthesia or sedation needed by each patient. It is utilized by anesthesiologists in multiple medical settings.
Aspect Medical had a busy day of news on Monday and is scheduled for a conference call Tuesday morning. Perhaps most interesting was that it “agreed” to end its strategic alliance with Boston Scientific (BSX). At this point it is unclear why the parties “agreed” to end its partnership and alliance. In its press release ASPM stated it was ending both a 2005 neuroscience strategic alliance with BSX and the 2002 original equipment manufacturer product development agreement with BSX. While anxious to hear the reasoning for the “breakup” hopefully announced in the call Tuesday, I do like that ASPM thinks its own stock is cheap (its P/E is hovering around 10) and says it will immediately buy 2 million of its shares now held by BSX for about $15.91 per share and retain the option to purchase the remaining 4 million shares over the next six months. APSM does not want its stock price hurt by BSX unloading its stock. BSX owned about 27% of the company prior to the ending of the alliance. One major concern I have is why does BSX want to unload all its APSM holding upon the ending of this alliance? What happened with the alliance? Does BSX think the stock is worth less than the current market price? BSX certainly does not “need” the money to pay its bills.
In other news APSM raised its guidance and provided an update regarding two abstracts presented at the Alzheimer’s Association International Conference. The abstracts report on interim results of two studies that are investigating use of the company’s brain assessment technology to evaluate cognitive function in elderly patients. According to the release, the interim results are consistent with previous findings that APSM’s EEG-based biomarker correlates with standard measures of cognitive performance. According to ASPM this suggests that the EEG-based biomarker can provide information that may be helpful in determining which patients with Alzheimer’s in the normal to mild cognitive impairment range are likely to experience cognitive decline. While not an overly positive press release, ASPM seemed to convey that the interim results are as expected and remain hopeful for further confirmation of the results in the future studies.
RELATED READING:
- Boston Scientific Begging For Good News
- The Never Ending Saga Of Bypasses And Stents
BioHealth Investor.com
______________________
Steven T. Gold, Esq., is a graduate of Yale University (B.A.) and the University of Florida (J.D., M.P.H.). Presently, Steve is working as an attorney while enrolled in a Master of Bioethics program at Penn. Steve is knowledgeable in the fields of public health, managed care, ethics and biotechnology. He is an avid and experienced investor who is presently starting a subscription newsletter and alert service, www.mentallystableinvesting.com. Steve will be a regular contributor to Biohealth Investor.
___________________________________
posted by Nico at
8:37 AM
1 Comments:
I would have to disagree with your comment that Boston Scientific doesn't "need" the money. DES share of total implanted stents continues to decline until interventional cardiologist get more comfortable with last stage thrombosis. Weak Taxus sales makes it increasingly difficult to for Boston to service their debt and a non-core asset like ASPM is a good source of cash.
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