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Mediwatch - Watch them rocket in 2005 !!! (MDW)     

overgrowth - 12 May 2005 22:21

Mediwatch is a small company destined to become a much bigger fish by the time this year is out. Mediwatch are already a market leader in urological medical diagnostics equipement and are currently exporting their products throughout the UK, Canada, Europe, India and Japan. That doesn't leave much of the globe left for them to capture - until you remember the good ol' US and China. These are the two massive markets which are destined to be added to MDW's export client portfolio by the end of 2005.

The company is currently heavily undervalued. This is probably because Mediwatch's speciality is not a very glamourous business to be in as their equipment is used extensively to diagnose prostate cancer in men and other nasty urological conditions affecting both men and women. However, don't let that put you off investing in these guys. This is big business and is growing at an exponential rate as more and more people globally become health-aware as they get older.

Mediwatch normally supply their products through to global markets via distribution agreements. They already have the best of distribution partners in the well known US medical distributor CR Bard who supply Canada and Europe and GE Medical who supply Japan. The UK business is handled by Mediwatch's own dedicated sales team.

US FDA approval was gained for MDW's products at the start of last year, however a whole year of US legal wrangling meant that they were unable to seek a suitable partner for the crucial distribution agreement until the start of this year. This distribution agreement is expected by the board to have a "significant effect" on the share price so they are reluctant to give any clues as to when it will be signed, sealed and delivered. The general consensus is that this US distribution agreement will be announced in July/August. In China and Hong Kong, MDW have done things the other way round. They have set up distribution agreements with major Asian medical equipment distributors and have stock already out there waiting to sell into the markets - all they are waiting for is SDA approval (which is a "rubber stamp") from the Chinese authorities - this can take anything up to 12 months to come through and MDW applied during Autumn 2004 - so even more good news coming soon this year. Epidemiological data from British Association of Urology conference last year: On average 30-45% of all men between the age of 50 and 70 have at least one PSA test per year in the US / Italy / Australia.

If that's not enough to convince you to invest a few hard earned coppers in MDW, they are also developing a PSA stick test product (PSAWatch) which is revolutionary and causing some excitement in medical circles. This product can also be adapted (at very low cost) for a whole spectrum of medical disciplines from Cardiology to Veterinary Practice! This product is likely to be released in the next few weeks. Philip Stimpson the CEO has said that this product is going to be their "gold mine" - I'm sure it will prove to be ours too.

Chart.aspx?Provider=Intra&Code=MDW&Size=Chart.aspx?Provider=EODIntra&Code=MDW&Si

overgrowth - 18 Jul 2005 16:26 - 486 of 1497

jnk, you'll find this post very interesting if you're not a visitor to the advfn boards:

"Here's just a quick note about the BAUS conference. At the end of the conference one of the senior figures in urology - the professor of Urology at the Institute of Urology (based at UCH) gives a talk called 'the best of BAUS'. It is a slightly lighthearted talk, but one in which he highlights those talks / posters / presentations which he thought were most interesting / important etc. It is of course an entirely personal view, but from a very wise old bird. One of the things he highlighted was the PSA sticks - and the prospect of instant PSA. Very interesting!

If I was the chief exec I would be aiming to hit the GP market hard. Of course the hospital uology service is going to be the first target - but don't forget that the main source of our referrals is from GPs who have already checked a man's PSA in the community. Most men who are discovered to have prostate cancer have their first PSa in the community. 'Dear Doctor, This man's PSA is 6.7....' is a standard and very common referral letter. And of course there are MILLIONS more GPs than urologists.

I am convinced that the PSA testing sticks are a major step forward in terms of urological diagnostics, and from a purely financial point of view - this is one of those rare genuine 'first in its field' kind of discoveries which has a HUGE impact on the company who invented it.

Here's another thought. There are quite a lot of tumour markers used in medicine, such as CA-125 for ovarian cancer, CEA for colorectal cancer, CA15-3 for breast cancer, CA19-9 for pancreatic cancer - I could go on. The great thing about the testing sticks is that they require an antibody to the marker - and then the rest is the same. all of these tumour markers have commercially available antibodies - that's how they are measured now - but like PSA it takes best part of a week to get the result back. I spoke to one of the science bods at MDW on the BAUS conference and they are already looking into this. I imagine that in X years time, you will be able to buy a machine and then order strips for whatever tumour marker you want - or even have a multi stick which will test for several things at hte same time. **** me!!!!

Ooh - next patient has arrived. Must go!"

jnknill - 18 Jul 2005 16:45 - 487 of 1497

OG, Many thanks for the above, obviously posted by a well-qualified individual and very,very interesting! The more that information of this calibre pops-up then the more one feels that the long term investment in MDW is a "winner", certainly the scope that PSA potentially has. Appreciated OG. Rgds.

rodspotty - 18 Jul 2005 16:52 - 488 of 1497

Another day another 200K T trade buy filled, interesting. DYOR

Rodders

rodspotty - 19 Jul 2005 11:23 - 489 of 1497

EVO's still out on the bid and looking for stock. DYOR

Rodders

rodspotty - 19 Jul 2005 16:25 - 490 of 1497

Looks like the 100K T trade was the buy order filled and EVO then came off the bid. A bit of belated profit taking followed. DYOR

Rodders

ptholden - 19 Jul 2005 21:35 - 491 of 1497

Evening all

Have to admit to closing all of my CFD positions this morning before shooting out to play a round of golf. With all of yesterday's sells and similar pressure today, I didn't feel confident that the chart wasn't about to make a double top. However, I must say that I was surprised to see a 7% mark down and was fully prepared to miss out on a substantial rise on release of news (could still happen tomorrow of course!). Will take another look at the chart now and decide when to buy back in, as I believe the deals will be announced soon and that the future is bright for MDW. Just trying to be a bit more cagey now and not too repeat previous mistakes.

pth

petralva - 20 Jul 2005 21:08 - 492 of 1497

to right ptholden a profit is a profit......although i can't tell what has been going on today.......evo's still bidding!...and big 50000-100000 buys not moving the price!

rodspotty - 21 Jul 2005 12:24 - 493 of 1497

EVO bidding for stock again offering 13p+. DYOR

Rodders

overgrowth - 21 Jul 2005 14:30 - 494 of 1497

jnk - more fascinating info. from williedoc:

"Here's a back-of-an-envelope bit of maths I did yesterday......

US population 275M
Assume male therefore 135M.
Male population over 40 - guessing 60M
Population prevalence of PSA testing - 30 - 39% (figures: BAUS 2004), average 1 - 3 tests per year.

Therefore approx between 20 and 60M PSA tests / year - call it 30M.

Assume just 5% of these are done with sticks year 1 and 10% year 2 - that means in the states ALONE 4.5M tests in 2 years.
Price of the stick - 3.50, cost to the company approx 1.
Gross profit therefore over 11M in 2 years.

Highest prevalence of prostate cancer in the World is...
USA / UK / Scandinavia / Europe / Canada / Australia. A comparable population PSA testing prevalence of 25 - 40% has been shown in Italy, Canada and probably several other places - but essentially all of these countries are likely to be comparable (probably higher in Scandinavia).

Now do the maths again with all of these countries. I have no idea what the over-40 male population of these countries together adds up to. Any idea anyone? Even assuming it is 200M which I suspect is well short - comparable calculations suggest 100M tests, which at 5 and 10% year 1 and 2 = 15M stick tests, 37.5M gross profit.

Therefore, the potential gross PROFIT of PSA sticks in 2 years could be multiple times the company market cap, assuming zero earnings from any other product / zero milestone payments / zero from new licensing deals in the Far East. Imagine saying 'this company is on a projected P/E of 0.3!!!!!!!!!!!!!!!!

Of course not all the profit will go to MDW - you would expect Medtronic to be doing it for sound business reasons - but however you look at it - it's looking pretty peachy.

Also - two other considerations:

1. The population prevalence of PSA testing is steadily rising as more men hear about it and ask their GP for one - look at penetration of mobile phones - completely different area I know - but basic population phenomenon perhaps?

2. If it is simply a matter of doing a pin-prick blood test not sending the damn thing away to the lab - it makes it easier to do and probably more will be done. I would not be at all surprised if it becomes part of the standard 'well man check up' by practice nurses in GP surgeries and for company medicals - in the same way as glucose sticks are used - i.e. LOADS more tests / year."

jnknill - 21 Jul 2005 15:24 - 495 of 1497

OG, Good afternoon, Your copy of "williedoc,s" post very much appreciated, I have to say when one looks at his projected numbers they are absolutely mind-boggling! I note that he admits some of his figures may require + or - adjustment but even if one wanted to adjust by say 25% up or down(very radical I know), the numbers would be representative of a flourishing Company! I am more and more convinced of MDW,s potential, so much so that I have increased my LT holding and patience is now the name of the game(sorry, not trying to "preach to the converted"). You know this man "williedoc" is some character, only wish I had 10% of his comprehension! Once again, thanks for copying the post to this thread, certain many PI,s will benefit. Good luck.

overgrowth - 21 Jul 2005 17:17 - 496 of 1497

jnk - things do look very healthy indeed for MDW going foward over the next 2-3 years. I can see my 1 initial target being reached if PSAwatch turns out to be as big as we believe it's going to be.

There's a lot of rubbish posts on advfn, though there are a small amount of excellent posters if you can find them !

It's great to have the background knowledge of someone actually at the front-end of where the business is going to be targeted. If williedoc and the esteemed professionals at the BAUS conference think that PSAwatch looks like a great product, then you can sure that colleagues worldwide will have the same enthusiasm.

Lots to look forward to !

rodspotty - 22 Jul 2005 13:46 - 497 of 1497

Looks like we are heading for another high, EVO's leading the way again. DYOR

Rodders

moneyplus - 22 Jul 2005 14:26 - 498 of 1497

keep going MDW--make my weekend!!

overgrowth - 22 Jul 2005 14:40 - 499 of 1497

mp - short term gains are nice, but the more I look into PSAwatch, the more it seems that MDW are on the verge of cleaning up in the global PSA testing marketplace.

Medtronic are well aware of the massive sales potential and it could be that the so called "US distribution deal" negotiations revolve around Medtronic having global rights to distribute PSAwatch (note the comments about US and other geographical regions in earlier news).

Offering global distribution rights could well be very beneficial for MDW, enabling them to get substantial income in return.

I really think that we'll be watching MDW's share price go through the roof over the next couple of years !

moneyplus - 22 Jul 2005 14:56 - 500 of 1497

cheers OG--like my Pcm and Seo I'll tuck these away and wait. Have you looked at Pcm?

overgrowth - 22 Jul 2005 15:12 - 501 of 1497

Certainly a positive AGM statement from PCM - I'll keep an eye on them.

ptholden - 22 Jul 2005 16:19 - 502 of 1497

Interesting chart and indicators at the moment. SP is in danger of making a double top, depending on how it finishes today. There is clear divergance on the Slow Sto, MACD and RSI and all based on average volume for MDW, so should be reasonably reliable. Could have bought back in two days ago at 13p but was persuaded by the indicators that a further retracement was likely. Clealry this has not happened yet and perhaps will not do so. It certainly won't if MDW are able to release any good news in the early part of next week! I'm setting myself a target of 12p this time and will definately stick to it, unless that elusive RNS makes an appearance. Certainly a cracking stock to be in at the moment and if that news does come out I will jump back onboard tout suite!!

Best of luck to all current and prospective holders.

pth

optomistic - 24 Jul 2005 10:53 - 503 of 1497

pth, get your 'tout suite' ready :-) As you say all the indicators are looking positive. Not sure about your interpretation of 'divergence' though, I was under the impression that a divergence was when the sp moved contrary to the indicators, in this case the sp is moving in line with the indicators. Would stand to be corrected if this is not the case, always ready to learn.
In the meantime these indicators look very positive and given that many trade on them could well signal a rise early next week.
opto

ptholden - 24 Jul 2005 11:15 - 504 of 1497

opto

Always ready to declare that I am still learning TA and as you rightly say it's all down to interpretation. But I'll have a go.

You can see from the MACD, RSI and Slow Sto that from the third week of June to Friday last week that if you draw a line from peak to peak all are falling whilst the SP has been rising, a clear example of divergance. However, if the SP were to continue to rise, so will the indicators thus making a nonsense of my analysis! The Double top formation was formed on Friday, giving some credence to my thought process and I would anticipate a fall on Monday. Just my luck for a RNS to be issued on Monday and all of that goes out of the window.

Assuming that there is no bad news in the pipeline and I can't believe that for one moment there will be, I fully intend to be back in soon, just trying to pick the dip!

pth

optomistic - 24 Jul 2005 12:47 - 505 of 1497

pth, thanks for your reply, if you are right about the fall on Monday I think it will be short lived but will give an opportunity to get in. Not so sure about a fall myself but that as you say is down to interpretation. It you are still in the learning curve with TA, as we all must be as you can never stop learning can you, I suggest you have a look at www.stockcharts.com MACD and other indicators thoroughly covered there and well worth the research.
Cheers and good luck tomorrow,
opto
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