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Running with laser scissors
Make 358% over the next six months without putting your eye out!
by Christian DeHaemer
Welcome to the year 2000. The future has arrived. They've cloned cows, sheep and monkeys. There are robotic dogs, vacuum cleaners and lawn mowers. There are TV screens as flat as a newspaper that you can roll up and take with you. The Japanese are walking around with Dick Tracy watches.
In a few more months we will have mapped the human genome and will begin curing genetic diseases. There is a man walking around with a corpse's hand and it works just like Frankenstein — all twitchy and bloated — but it works.
The only parts of you they can't replace are the brain and the spinal column — and ex-Superman, Christopher Reed, is working on that one.
There are hybrid cars that get 80 miles to the gallon, buses powered by fuel cells that emit water as exhaust, and high tech materials that can stop a rifle bullet and yet weigh next to nothing. A few weeks ago, a couple of smart guys in California managed to transport a proton across their lab. Don't ask me how they did it or what it means to society as a whole. I believe that teleportation would be anarchy. (Imagine thugs materializing in your living room.)
The future isn't all here. I'm still waiting on the antigravity belt and the moon colony, but barring those things, I am simply in awe of the technological progress over the last 25 years.
Blow glass
But that won't stop me from searching out opportunities in the next new thing. Taipan is on a constant search for the new and the profitable.
Consider the simple mechanical means by which modern scientists manipulate cells, chromosomes, and other tiny bits of organic matter. They use high tech microscopes and computer guidance systems.
But when they actually have to physically move microscopic things around they use pipettes, which are tiny glass tubes. This is like framing a house with a sledge hammer. You can do it, but there has to be a better way.
Well, the company I'm about to tell you about has solved that problem and a few more along the way — and it's trading today for under US$3 — with a market cap of less than US$20 million! But within two years their sales could reach the US$1 billion mark. Read on.
Bloody fingers
If you've been to the doctor in the past thirty years, you've had a blood test. Some ancient nurse with a hair coming through her mole grabs your finger and jabs it with a sharp piece of metal. Then she holds a small glass tube to the wound, which sucks up the blood. Your finger gets bruised a little bit and is sore for the rest of the day. Life goes on.
But imagine if you have to jab your own finger multiple times a day, every day for the rest of your life. Or what if your five-year-old, or your grandmother, was in the same predicament. Today it's the daily regime for over 150 million diabetics worldwide. But things are changing.
 Cell Robotics (CRII: Bulletin Boards) has invented a device the size of a cell phone that perforates the skin with a laser. It's been dubbed the Lasette — like a lancet, get it?
The Lasette costs just under US$1000. It has adjustable power for various skin types and is reputed to be nearly painless. The Lasette also heals faster, is sterile, and causes no bruising or excess bleeding.
You simply put your finger in a small indentation located at the top of the device, adjust the power, and presto — you get a drop of blood from which diabetics are able to measure glucose to determine proper insulin dosing. I know I'd buy one.
Lasers are not just for breakfast anymore
There are two types of Lasettes — the Lasette and the Professional Lasette. The latter is about the size of a videocassette and contains a battery-driven laser with a charger. This was introduced about 14 months ago and sells for just under US$2,000 to professional environments such as hospitals.
There are some 53,000 medical sites in the United States alone that perform capillary blood sampling.
The pros of the Lasette are obvious. It's quick, easy and painless. The Lasette has no sharp, bloody, AIDS-infected points that must be disposed of. Not to mention that it takes the jab method out of the hands of nurses who just had a fight with their boyfriend. And it eliminates the perfectly rational fear of needles.
But most importantly, the Lasette is the only device that has been FDA approved as an alternative for the steel lancet. The home model has also been approved by a number of insurance companies.
Insurance companies like it because it increases the likelihood of personal glucose testing and therefore reduces the risks of emergency room visits.
The Lasette market
The annual market for glucose testing is estimated to be US$3 billion worldwide and is expanding at a 12-18% clip. In the United States, the estimated number of people who test their blood sugar levels on a daily basis exceeds 4 million. The total market for diabetes care is estimated to be US$44 billion.
Like all markets, the diabetic population is offered items through direct mail. The National Diabetic Assistance Corp. (NDA) and Cell Robots have a nonexclusive distribution agreement. The NDA will sell the home-based Lasette to its focused mailing list of 1.5 million — of which 500,000 are currently customers.
The marketing of this product has barely gotten off the ground and will ramp up over the next few months.
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A sperm cell can be trapped while swimming using the LaserTweezers.
After release the cell continues toward its goal unharmed. |
The Professional Lasette is currently being marketed by Chronimed, a mid-sized medical device supplier. The terms of the deal guaranteed purchase of 6,500 Professional Lasettes over a two-year period and a US$600,000 investment in Cell Robotics.
Really big market
If one percent of the U.S.-based insulin-injecting diabetic population of 4.7 million bought a personal lasette — you are looking at revenues of US$55 million. Or two times their current market cap. If 5 or 10 percent bought a lasette — you are looking at somewhere between US$276 million and US$552 million. On the world stage the potential soon exceeds one billion!
Before you start to call me math happy, consider that this isn't their only product. That's right, there's more!
In Vitro Workstation
The IVF workstation is a computer-controlled microscope with a motorized stage and a video camera. It utilizes a laser to manipulate eggs, embryos and sperm. The laser also assists embryo hatching. Furthermore, it enables data to be stored on standard word-based software.
The world of in vitro fertilization is growing rapidly. The IVF workstation increases success rates as well as cutting time and cost.
There are some 1,300 test-tube baby clinics worldwide and 300 in the U.S. The average cost of an in vitro process is US$5000. Often, a couple needs to go through the process multiple times. Needless to say, increases in productivity benefit all concerned. The IVF is currently being used in Europe and FDA testing is being done in the United States.
Cell Robotics Workstation
The Cell Robotics Workstation is a computer-controlled workstation similar to the IVF Workstation. It is intended for use in optical trapping, manipulation of micro-bological matter and microsurgery. Let's face it — with the human genome project nearing completion there are more and more of these labs every day.
The workstation uses lasers instead of pipettes. These lasers have patents and are dubbed LaserTweezers, LaserScissors, CellSelector and SmartStage. They enable precise manipulation of cells. I know I've never met a coordinated micro-biologist.
The workstation is the next generation for use in microbiological laboratories. It is used in a variety of medical, biological and genetic applications for manipulating and cutting cells and chromosomes.
How to sell a laser pricker
Cell Robotics intends to focus on what it believes will be the most profitable and most widely accepted component of its business — the Lasette. The company feels that it will be of particular benefit to the 10-33 percent of diabetics who suffer from needle phobia. This would suggest that the sales would go beyond 1 percent of the available population.
Cell Robotics is just now starting to ramp up its advertising. In addition to the direct mail campaign mentioned above, advertisements will appear in several magazines including Diabetes Forecast, Diabetes Self-Care and Diabetes Interview.
The time to purchase this stock is now, before it makes the news.
The numbers baby!
Cell Robotics is a start-up company with an eye on growth. Revenues increased 31% to US$1.38 million in the first nine months of 1999. Total assets increased from US$1.5 million at December 31, 1998 to US$2.1 million at September 30, 1999. Over that nine month period US$843,492 was burned from operating capital.
A letter of credit is in the works, but I wouldn't be surprised at a secondary offering if this stock starts to run.
There are 8.2 million share outstanding with a 6.8 million share float. This stock has not been heavily traded in the past but is starting to pick up some attention.
There are risks associated with any start-up. This one is no different. Based on the revenue projections of US$110 million (2% of the daily multiple users) and considering that this company could make as much as US$522 million over the next 18 months — and considering that it has a market cap of only US$40 million (at US$5 a share — current price is US$3) — this company should at least trade at sales, if not 2 or 3 times sales, considering its growth rate will be more than 5000%.
I conservatively rate Cell Robotics as a strong buy up to US$5 with a 12-month target of US$13.75 — a 358% percent gain over current levels. Don't chase it. But if you get in, I think you will have a winner.
Buy Cell Robotics (CRII: OTC BB) up to US$5 today!
For more information contact: Cell Robotics at crii@cellrobotics.com, tel: (505) 343-1131.
| HISTORICAL QUARTERLY RESULTS REVENUE (Thousands of U.S. Dollars)
|
| |
1996 |
1997 |
1998 |
1999 |
| 1st Qtr MAR |
128 |
257 |
456 |
516 |
| 2nd Qtr JUN |
335 |
278 |
328 |
601 |
| 3rd Qtr SEP |
130 |
294 |
274 |
265 |
| 4th Qtr DEC |
70 |
208 |
371 |
— |
| EARNINGS PER SHARE (U.S. Dollars per share)
|
| |
1996 |
1997 |
1998 |
1999 |
| 1st Qtr MAR |
-0.09 |
-0.1 |
-0.06 |
-0.14 |
| 2nd Qtr JUN |
-0.08 |
-120 |
-0.1 |
-0.059 |
| 3rd Qtr SEP |
-0.1 |
-0.14 |
-0.13 |
-0.06 |
| 4th Qtr DEC |
-0.095 |
-0.12 |
-0.1 |
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In addition to his duties at Taipan, Chris DeHaemer is the editor of The Hammer.
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