Someone has matched R&D spending by Bovie Medical Corporation (NYSEMKT:BVX) on a dollar-for-dollar basis, amounting to well over a million dollars per year for a number of years. (Details are available in the article "Bovie Medical: Little Bovie May Be Running With The Big Dogs.") An exclusive agreement with Boston Scientific Corporation (NYSE:BSX) regarding manufacturing and distribution of an electrosurgery oncology product (i.e., a medical device for treating cancer) may indicate who that someone is.
The article, entitled "Bovie Medical Announces Exclusive Distribution Agreement with Boston Scientific for Electrosurgery Oncology Product" and dated November 11, 2006, states that:
Bovie Medical Corporation ("Bovie") (AMEX: ), a manufacturer and marketer of electrosurgical products, announced today that it has entered into an agreement with Boston Scientific Corporation (NYSE: ) for the exclusive distribution and marketing by Boston Scientific of an electrosurgical device for use in Boston Scientific's Oncology business. Under the agreement, Bovie will manufacture the product. The product will be co-labeled with both the Boston Scientific and Bovie names displayed. Additionally, Bovie will receive funding from Boston Scientific as part of its manufacturing start up.
While it may be objected that this article was from eight and a half years ago (i.e., the agreement is also the same age) and at first glance there has not been any obvious follow-up (other than that someone has been paying Bovie a lot of money to conduct R&D), I don't think this in any way invalidates the possibility that the Boston Scientific-Bovie Medical agreement is very much alive and kicking.
First, someone has been ponying up a lot of dough to support Bovie's product development efforts. The Bovie Medical-Boston Scientific agreement stipulates that "Bovie will receive funding from Boston Scientific as part of its manufacturing start up." It's entirely plausible that Boston Scientific would help pay for the product development as part of the process of preparing for manufacturing finished products. As to the time elapsed, this could be explained by a combination of Bovie's technology taking longer to complete than expected (thus the extended time period) while also turning out to be even better than anticipated (leading to Boston being willing to provide financial support over this time).
Second, the idea from the first point that Bovie's technology may have turned out to be even better than expected is supported by the finding that the J-Plasma can most likely selectively destroy both cancer cells and drug-resistant bacteria while leaving healthy cells practically untouched (see "Bovie's J-Plasma May Slay The MRSA Dragon (And Other Nasties").
Third, Bovie purchased two Citizen CINCOM Swiss lathes of the A20-A32 class. These are advanced 11-axis lathes designed for high throughput manufacturing and cost around $300,000 each. This doesn't seem justified by their current (or past) revenues and product line. However, it would make a lot more sense in the context of another company paying for lathes in the expectation that they would soon be put to use manufacturing products for distribution and sale by this other company.
Fourth, Boston Scientific later transferred a substantial amount of intellectual property (NYSE:IP) to Bovie and some important Boston Scientific employees moved into high-level positions at Bovie (see the first link in this post).
Fifth, Bovie has been making noises about "negotiations," "agreements," etc. with one or more "large multi-national medical device" companies for quite some time (as in years). For an example, see here. It has been generally assumed that this noise pertains to forthcoming deals, leaving it unexplained until one or more announcements occur. It could be that some of these statements actually refer to the 2006 Boston Scientific-Bovie Medical deal, with the collaboration between the two companies remaining very active.
Previous detailed research into Bovie Medical Corporation has shown that the company has developed links to a number of large medical device companies and has a product pipeline that addresses very large markets (billions of dollars annually) and ought to have appeal to some of the larger players in the industry. Several medical device companies at a minimum could plausibly make a buyout offer for Bovie, while a number of companies could entertain the idea of licensing deals. If multiple companies are in fact taking a look at Bovie Medical (previous articles and Instablog posts have shown that this is fairly likely the case), it would behoove one of them to go ahead and make the first move as the company that moves first will likely get the best deal.
Disclosure: The author is long BVX.
Additional disclosure: See the cautionary statements included at the end of my Seeking Alpha articles on Bovie Medical Corporation.