A Medical Device Daily
Utah Medical Products (UTMD; Salt Lake City) reported that since the drop in its share price from $26.75 on Aug. 9, 2004, to a $17.99 closing price on Aug. 10, it has repurchased 539,000 shares on the open market for $9,945,000.
The repurchase was funded by profits from continuing UTMD operations and prior cash balances not needed to support operations, it said.
The average per-share repurchase cost, including transaction costs, was about $18.46.
The company said the recent repurchases represented about 12% of the shares outstanding prior to the Aug. 10, 2004, FDA press release, which apparently damaged the company’s reputation with some investors (Medical Device Daily, Aug. 11, 2004).
Last August, the FDA said in its statement that it previously sent a warning letter to the firm following an FDA inspection but that the company “has consistently failed to ensure that its products are manufactured in accordance with the Quality System regulation.”
In a response to the FDA letter, the company charged “that the investigators who conducted the inspection of the Utah Medical facility in February and March of 2003 engaged in inspectional practices in disregard of explicit instructions and policy stated in the FDA’s Investigations Operations Manual and prepared an Establishment Inspection Report [EIR] that contains numerous misrepresentations of the actual facts, bias and material omissions.” The company further said that “the number and significance of deficiencies found in the EIR suggests the real possibility of agency misconduct and bias against Utah Medical Products.” Since then, the agency and UTMD have been locked in a war of words.
The board of directors said it intends to continue UTMD’s share repurchase program when shares are undervalued, which it believes is in the best interest of its long-term shareholders.
Utah Medical Products, with a particular interest in healthcare for women and their babies, manufactures a range of disposable and reusable specialty medical devices.
Sound Surgical Technologies (Louisville, Colorado) reported that it has elected to postpone its previously disclosed (Medical Device Daily, May 4, 2005) initial public offering (IPO) of its common stock due to current market conditions.
The company said it believes that in the interest of long-term shareholder value there are presently more attractive capital raising alternatives than through an initial public offering.
Earlier this month, the company had filed a registration statement with the Securities and Exchange Com-mission for an IPO that would have consisted of 3.3 million shares at a range of $5.50 to $7.50 per share, or potentially up to more than $24 million.
Sound Surgical said it believes it is in a very good position to continue its business expansion with “other capital alternatives” at this time.
The company will continue to evaluate market conditions and may proceed with a public offering at a later date.
Sound Surgical has developed the Vaser System, an ultrasound-based device that breaks up body fat for removal in a lipoplasty (or liposuction) type of procedure and began selling it in 2001.
With the Vaser, fat can be removed from any place on the body where a person has developed what the company calls “extra cushioning.”