Aortech Share Discussion Threads

[1400] 17/10/2012 13:50

Hard to listen to this guy!!

[papillon88] 17/10/2012 13:37

here we go! question time

[gac141] 17/10/2012 13:35

Exactly...

[1400] 17/10/2012 13:30

Optim(TM) crucial to St Jude.

[gingerplant] 17/10/2012 12:53

Results here, no mention AFAICS

[gac141] 17/10/2012 12:33

mmmmm nice country music la la la

[gac141] 17/10/2012 12:27

Earnings call today.. Saw this..

St. Jude's second-quarter 2012 adjusted earnings per share of 88 cents beat the Zacks Consensus Estimate by a penny and exceeded the year-ago earnings of 85 cents. In the quarter, reported profit inched up 1.2% to $244 million (or 78 cents a share) as lower expenses offset weak revenue generation.

The Minnesota-based medical technology giant reported net revenues of $1,410 million, down 2% year over year, beating the Zacks Consensus Estimate of $1,430 million. Sustained poor performance across the Cardiac Rhythm Management (CRM) unit and the vascular unit more than offset growth at the company's smaller Atrial Fibrillation (AF) and Neuromodulation franchises.

Revenues from the core CRM segment dropped 6% year over year to $746 million, indicating continued softness in the CRM market. Implantable Cardioverter Defibrillator ("ICD") revenues dipped 4%, while pacemaker sales declined 9%.

They don't need any more problems...

[papillon88] 17/10/2012 12:27

STJ webcast 1pm today

[harrogate] 17/10/2012 10:44

It would seem a slightly more direct argument but taking the same opposing views that we all are thinking through.

I know that the whole StJ breach issue has risen up very recently and hijacked events but I do think that in the light of previous announcements about our funding position that we need to be updated very soon on how we are going to be funded beyond the end of October. If that was sorted it would help any negotiations that are going on.
Whatever we feel about the St Jude position their share price tells us that the US market isn't worried about the issue.. maybe because they know if it comes to it they can just shell out £20m and make the issue go away. Let's hope they do!!!

[bearfoot] 17/10/2012 10:27

Here's some well-reasoned analytical comment (ha!) from a fairly hysterical US BB:

[blackbear] 16/10/2012 16:06

your right gac it looks terrible at the screen but I sold a few at 92p when indicative was 87p

[gac141] 16/10/2012 15:55

I hope you are right!

The market makers are being daft. visible 15% spread ridiculous and online offer of 10 shares to but can sell... so obvious they are collecting stock.

[1prophet] 16/10/2012 14:11

St Jude will feel the heat this week. News is getting out!

[spurious] 16/10/2012 13:28

Perhaps another marlin spike imminent !

[marlint111] 16/10/2012 10:58

BB it clearly is on the brink otherwise they wouldn't be trying to sell the company (from earlier RNS- "The Directors recognize that the Company will either need to raise further funds by the end of October 2012 or complete some form of corporate deal")

[blackbear] 16/10/2012 10:50

The company said its cash position would increase this year due to restructured licenses not sure it's on the brink.

BB

[blefh182] 16/10/2012 10:37

I sense some optimism here but dont quite understand the reason
we have one company claiming a breach of contract and another adamantly denying a breach.
bearing in mind the company claiming the breach is not comercially viable and on the brink of adminstration and the other is a multi billion dollar US pharma.
Seems a desperate last-ditch attempt here
Am I missing something

[gac141] 15/10/2012 18:01

Could St.Jude And Aortech's End Game Spell Trouble For Durata™ ?
October 15, 2012

In short

Last week we covered the developing shenanigans regarding Aortech and St.Jude's relationship. And an interesting story it's becoming as the two parties home in on what looks like an inevitable termination early next month. Or, in what may look like rather a long shot at the moment, it may end up as an acquisition. St.Jude have to be hoping so as AorTech's coating technology underpins its Durata™ product.

Background

According to Aortech International PLC, it's biggest client, St.Jude Medical Inc., has breached the contract under which Aortech supplies the coating on what is one of their most sensitive products, the Durata ICD lead, successor to the troubled Riata family. The coating, branded Elast-Eon™ by AorTech (Optim™ in its St.Jude guise) and proprietary to AorTech, has been supplied under the contract since 2006. Its incorporation into St.Judes ICD leads has seemingly been the biggest contributary factor in fixing the so-called "externalisation" issues suffered by St.Jude's previous generation ICD lead product lines.

All good so far then, except that troubles have been looming for a while. As recently as September St.Jude made something of a faux pas by stating publicly that it had "acquired the exclusive intellectual property rights and necessary assets for the manufacture of Optim insulation used in CRM leads".

Aortech were quick to point out the fact that St Jude had not acquired the exclusive intellectual property rights to Optim™. St.Jude was forced to issue a retraction of its original statement to this effect. That must have done wonders for relations.

Back to the here and now, AorTech remains the sole manufacturer and supplier of the material that St. Jude calls Optim, and retains ownership of the associated intellectual property and know-how. The two companies' closeness extends to St.Jude's purchase from AorTech of the plant and equipment to manufacture Optim, these assets being located in a facility which AorTech leases from St Jude. AorTech continues to use these assets to manufacture Elast-Eon/Optim. Our guess is that somewhere in the entanglement of that particular deal lies the source of the alleged breach, but that remains speculation.

In any event it now transpires that the deal might not actually have been all that sweet for AorTech, which is rumoured to have been squeezed on price, to such an extent that it is actually making a loss on every sale. It's perhaps unsurprising then that AorTech's share price has enjoyed a near 50% ramp this morning following the news of its impending likely termination of the St.Jude deal.

So where's it all going to end up? It's no secret that AorTech is in the market for a disposal (the share price move points to that too) and that St.Jude is the most likely buyer. Indeed until the recent dispute they, and numerous other parties, large and small, were already at the negotiating table.

If it doesn't end well however, St.Jude might just be in a pickle. While the company is issuing its own stout defence of the breach claim, it is also going to some lengths to convince observers that it has both inventory and alternative supply lines for Optim. AorTech obviously thinks not, its posture suggesting it is holding a good hand of cards.

AorTech's clearly sees the demand for its technology and it would appear that the markets agree that its stars are lined up for the desired exit. Whether that ends well for St.Jude too remains to be seen.

[gac141] 15/10/2012 14:58

Significant interest from press in the US. Where will this lead?

[guru] 15/10/2012 12:43

St. Judes 3rd quarterly results are out this Wednesday 17th October and I wonder how much pressure they will be under to sort this out before the AOR news hijacks the conference call?

[papillon88] 15/10/2012 12:20

Seems to be a lot of media coverage of late and more awareness been created I think STJ might come back to negotiate they certainly have a lot to lose and not much to gain by all this.

[25october1969] 15/10/2012 12:06

11:48AM
PM Hey, you seen Aortech!
PM Company i didn't know existed until last week
BE Is this the heart valve thing you were on about?
PM background here
PM Yep
PM So the price is up 43% this morning....
PM at 97p
PM Which we will claim the credit for
BE Of course.
PM H/t to James, the reader that drew my attention to this
PM So basically, Aortech looked like it was going bust
PM They tried to sell the business
PM Something stopped them from doing that
PM A mystery
PM But the company then declared its No1 customer -- who speak for 70% of revenues -- as in breach of contract
PM Customer = St Jude -- huge US specialist in pacemakers and the like
PM Aortech provide the polymer that is used in coating the leads in its pacemakers
PM apparently this is crucial stuff
PM Anyway, its a stand off
PM I don't know why St Jude havent just bought Aortech out

PM So that's why Aortech is up 43%
PM In case you were wondering
BE Hey - I've just noticed Bill Brown's been dropped in as chairman of this thing ....
BE Formidable chap.
BE Wouldn't bet against him.
PM Ah you know him
BE Met him a couple of times, at formals.