Analysis - ACG - Atcor Medical

ACG - Atcor Medical

AtCor is the "Central Blood Pressure" Company – whose flagship product is the SphygmoCor Systems that measures central blood pressure non-invasively. SphygmoCor system is the only FDA-approved non-invasive tool for measuring blood pressure at the heart.

Price($) 0.17
NTA ($) 0.15
P/NTA 1.16
Team 4.1
BurnPeriod 8.53
ProductPipe 5.3
ForeignMarket 5.2
Cash:Debt DebtFree

SphygmoCor is a suite of products and is composed of:
- SphygmoCor Px Aortic BP Waveform Analysis System
- SphygmoCor Vx Pulse Wave Velocity System
- SphygmoCor Mx Aortic BP Monitoring System
- Heart Rate Variability System

The company explains its product as:
"The SphygmoCor family of products provides tools for non-invasive assessment of the cardiovascular system and autonomic function. The technology that powers these products is centred on a transfer function that derives the pressure wave at the ascending aorta. The transfer function is a patented mathematical model of the properties of the brachial artery and provides important central data through a non-invasive recording of the pressure wave at the radial artery. SphygmoCor allows the physician to see the cardiovascular state of the patient, where it really matters – at the heart."

According to AtCor it is the only FDA approved product of its kind. The positive factors include: being a market leader, patented advanced product. The negative factors include: obsolescence if competitors develop better products, company depended on this one platform product.

Financially, AtCor is quite desirable, with the most attractive being its Price to NTA of 1.16. Good values of this ratio is considered to be up to 3.0 for a biotech company - the lower the better. In addition, it can survive over 8 quarters (2 years) given present cash burn rate. This is a company that has significant and increasing revenue streams unlike drug development companies. Expect the revenue to increase in the next year by 100% due to recently developed distributor channels in Asia and Europe. AtCor is also debt free.

The market targeted is not only medical practitioners and hospitals, but also include academic research organisations and big research pharmaceuticals in particular in the US. There is a risk of a superior product developed by competitors, and the risk being amplified by AtCor relying on this single technology, even though it has multi-applications.

The management team has relatively few scientists, but since the platform is now commercially available, this is not a main concern. Although it does indicate that they are not actively developing new products. The management team seems to have the experience to lead the commercialization process.

In summary - the key figures presented above are very positive. The two major risk is the ability of management to increase sales / product domination and the risk of a better product from competitors.

Technical Analysis - started nov/dec 05 at 70c, peaked 85c in Dec05 and declined to stable level of 17c to 20c from Aug 06.

Recommendation: Buy below 18c

Note: CC has just bought shares a few days ago at 18.5c and the ACG had closed at 20c for the last few days.