Aspect Medical To Buy Back Shares From Boston Scientific

Aspect Medical (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 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 the 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.

ASPM 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 of 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, ASPM 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 ASPM’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 remains hopeful for further confirmation of the results in the future studies.

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- Boston Scientific Begging For Good News
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Comments

[jimmy Turano:]

Dec.13th This is a stock that should easily appreciate over 50% in the next 12 months.
There is much to discuss but if one checks out every aspect of this stock, it would easily be evident that growth and appreciation are the order of the day!

2007 Dec 13 09:13 AM

[jimmy Turano:]

Dec.18th,
I find it amazing how research firms cover more worthless stock than those that warrant coverage like"ASPM'. Millions of experts out there
getting paid big money and the little investor is left confused, making the wrong investment decisions and losing hard earned money.
If investors could earn 25% or more year after year, and focus on just a handful of stocks, taking profits once per year, not watch T.V. as much, not rely on Research firms at all, they would be better off.
'PLAIN & SIMPLE INVESTING'
IN THIS ENVIRONMENT, YOU HAVE TO BE REAL SELECTIVE WITH YOUR STOCK PICKS, BECAUSE UNTIL THE FINANCIAL STOCKS TAKE OFF THE STOCK MARKET IN GENERAL WILL GO SIDEWAYS.

2007 Dec 18 09:32 AM