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Bovie Medical Corporation: Brief Update

|Includes: Bovie Medical Corporation (BVX)

Last week I called up Mr. Hugh Collins of MBS Value Partners, the Investor Relations specialist for Bovie Medical Corporation (NYSEMKT:BVX).

Mr. Collins said that the recent share placement had received "strong institutional support" (please note: this quote is from memory, so a mistake is not impossible). The underwriters of the share placement were given an option to purchase up to 10% more shares than the number in the placement, such as for covering excess demand for example. This option is in effect for 30 days after the close of the placement (March 17) or the complete exercise of the share purchase option, whichever comes first. Mr. Collins said he could not comment on the status of the 10% option.

Johnson and Johnson (specifically, the Ethicon division) recently announced a collaboration agreement with Google "to create an innovative robotic-assisted surgical platform capable of integrating advanced technologies with the goal of improving health care delivery in the operating room."

The Johnson and Johnson / Google agreement is interesting for several reasons: Bovie has already been shown as being of possible interest to Johnson and Johnson for other reasons; J-Plasma and Bovie's Seal-N-Cut vessel sealing would both fit the bill of "advanced technologies" and would add value to a Johnson and Johnson / Google robotic surgery system; and Bovie has previously indicated it is working on a version of J-Plasma for use with robotic surgery devices (see previous Seeking Alpha articles by this author on Bovie Medical).

Somewhat more peripherally - but still interesting - is that much of the management of Intuitive Surgical performed a mass dumping of their shares in the company about three or four years back. (I haven't checked to see if they repurchased any of them later on.) Since it's likely that the Johnson and Johnson / Google deal has likely been in the works for a long time, it's quite possible that the two companies began looking into such a possibility several years ago and Intuitive's management got wind of it, figured it would be their biggest competitive challenge yet, and decided to cash out while the going was good.

A previous blog post (A Tale Of Two Stocks) discussed contrarianism and showed the very different analyst ratings for Bovie Medical and Boston Scientific. At that time, the Jaywalk Consensus was to "hold," with the other analyst ratings all being negative. The Jaywalk Consensus has now dropped to "Sell" as shown below.

Disclosure: The author is long BVX.