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Company Stories SStories that earlier appeared in Nelson's News
S2MDA reports that S2 Corp (Bozeman, MT) got a multimillion-dollar MDA SBIR Phase III contract for its radar signal processor plus development of the original optical memory materials developed with SBIR by Scientific Materials Corp. S2 is a spin-off of SMC after SMC was acquired by FLIR. S2's website makes the bodacious claim that Bozeman is quickly becoming one of the largest technology centers in the world even though it has posted no company news since Jan 05 Sage Electrochromics (Faribault, MN)Medical devices start-ups powered Minnesota to the best quarterly VC performance in eight years just as a sagging economy curbed venture spending across the country. ... Seven medical device firms captured $130 million, led by CVRx (Brooklyn Park, MN; no SBIR) that makes a device that treats high blood pressure, raised $84 million on top of the $200 million investors have already poured into the company. Cardiac Concepts (no SBIR) first-round financing totaled a hefty $21 million. ... Other notable deals: Proto Labs (Maple Plain, MN; no SBIR) -based maker of injection molded products, attracted $67.2 million. Sage Electrochromics (Faribault, MN; $2M SBIR) raised $13.3 million, which makes glass that influences building temperatures, previously won $16 million in venture financing. [[Minneapolis Star Tribune, Oct 26, 08] Salient Surgical Technologies (Dover, NH)Medical device company Salient Surgical Technologies, (Dover, NH; no SBIR) formerly known as Tissuelink Medical has withdrawn its IPO registration intended to raise about $86M, .... cites market conditions as the reason. [Mass High Tech, Aug 28, 08]
Salix Pharmaceuticals (Morrisville, NC)Salix Pharma down 11% [Oct 9, 08] Salix Pharma up 24% [Oct 6, 08] said its Xifaxan antibiotic measurably improved quality of life in a study of patients with diarrhea-predominant irritable-bowel syndrome. Salix Pharma up 13% [Sep 18, 08] Salix Pharmaceuticals filed a lawsuit to prevent a competitor from selling a cheaper, generic version of Salix's bowel cleanser, Osmoprep. [Raleigh News & Observer, Sep 10, 08] Salix Pharma down 13% [Aug 18, 08] Salix Pharmaceuticals announced plans to raise $50 million to expand its product lineup, boost revenue and ease the increasing pressure from generic competitors. [Raleigh News & Observer, Aug 19] FDA wants more info. A gastrointestinal drug that could have bolstered Salix Pharmaceuticals' (Morrisville, NC; $700K SBIR) sales has come up short of regulatory approval. [Raleigh News & Observer, May 20, 08] Salix Pharmaceuticals reported that first-quarter revenue slumped 43% as generic rivals hurt sales of the drug that was previously the Morrisville company's biggest product. [Raleigh News & Observer, May 7, 08] Salix Pharmaceuticals down 10% after it said that Novel Laboratories is challenging the patent on the company's bowel cleansing drug Moviprep. [AP, Apr 18, 08] Salix Pharmaceuticals up 11% [Apr 1, 08] Salix Pharmaceuticals bought the rights to develop and market treatments for moderate Crohn's disease and ulcerative colitis, which can cause abdominal pain. [Raleigh News&Observer, Mar 14, 08] Salix Pharmaceuticals (one 1994 SBIR) reports a $19M million loss for the quarter. [Raleigh News&Observer, Mar 4, 08] Salix Pharaceuticals (Morrisville, NC; one SBIR) investors were expecting a challenging 2008 after federal regulators in December approved generic copies of the company's best-selling drug. [Now], they found out that the year also will be unprofitable. [Raleigh News&Observer, Feb 1] Salix stock trades at a third of its high three years ago. Salix Pharmaceuticals down 16% [Dec 31, 07] after it submitted an application to the FDA for marketing approval for granulated mesalamine, an anti-ulcer drug. [Forbes] amid news of generic competition. Salix Pharmaceuticals down 22% [Dec 28, 07] Salix Pharma up 14% on news of the company's exclusive rights to co-promote the drug Colazal once it is approved by the FDA Salix Pharmaceuticals (Morrisville, NC; one Phase 1 SBIR) up 10% when second-quarter revenue and profit rose as the company sold more drugs to treat gastrointenstinal diseases. [Raleigh News & Observer, Aug 2, 07]
SDL Inc (San Jose, CA)Cashing Out In the past twelve months, the two leading lights of SDL have cashed out a pile of their chips. R&D guru Dave Welch sold $42M of shares and CEO Don Scifres sold $196M. Meanwhile, one broker house enthused over SDL Highlights..· Outstanding EPS On Higher Gross Margins And Strong Sales. SDL reported Q3 revenues up 33% sequentially to $147M, exceeding our $140M estimate. EPS beat our estimate by a wider margin due to higher-than-expected gross margins. · Raising Q4 And 2001 Estimates Significantly. With SDL’s Q3 performance, we are now looking for $1B in FY01 revenues, up from $805 million, and EPS of $2.53, up from $1.91. Reiterate Strong Buy. We continue to believe that SDL’s proposed merger with JDS Uniphase (#) will be approved and will close by the end of the December quarter. SDLI shares are currently trading at an 18% discount to the acquisition price based on the 3.8:1 exchange ratio. Moreover, even considering the unlikely scenario of the deal falling through, we believe SDLI shares are attractive on a stand alone basis given the robust fundamental outlook and the high likelihood of another bidder emerging. We are reiterating our Strong Buy rating on the shares of leading optical component pure-play SDL after the company reported 3Q EPS of $0.45, $0.07 ahead of our expectations. Pro forma revenue was up about 20% sequentially to $146.5M, $6.5M ahead of our expectations. The drivers of this upside were continued strength in terrestrial and undersea 980nm sales as well as ramping sales of new products related to a string of successful acquisitions including IOC, Veritech, Queensgate and PIRI. SDL is a horseman. The demand for the company's lasers increases as more channels of light are multiplexed within a strand of fiber. They have become just a phenomenal company in the past year with obscene sequential revenue growth. Estimate was $0.38; they did $0.45. Revenue growth was up 33% sequentially, 208% year-over-year. [L Siracusano, Individual Investor, Oct 19] Fortune has a focus piece on how JDS Uniphase is the premier bandwidth company in a world where bandwidth is exploding. Potential SBIR proposers in photonics should be able to recite and relate to the JDS story. Meanwhile SDL soared 19% to even higher heights after reporting record profits of $27M on revenue of $110M for the quarter. Now it trades at only 690 times earnings and a $32B market cap. JDS is buying it for $41B if the government anti-monopolists allow such concentration of photonics. More SDL High Speculation, Rumor, Industry Talk says Corning would buy SDL. Corning has spent $7B recently to push to the forefront of the optical-fiber business and is now expected to spend yet more. After all it is making more money than even Wall Street expects. So-called industry observers expect Corning to acquire optical-parts rival SDL just to beat JDS Uniphase on a like buying spree. Both Corning and SDL say "no comment" to questions. [facts from thestreet.com, Jun 13] The sharks are all around and even eating each other as this industry grows while finding how far it can go and who will dominate. One benficiary of all the buyouts has been BMDO's SBIR reputation. BMDO got fed several companies' early need for infant capital: SDL, CoreTek, NZ Applied Technologies, Intellisense, E-Tek Dynamics. Once company whose CEO once boasted he could compete with SDL still languishes at its market cap of the early 80s - Spire. Although the stock price is up more than 1800% since we first wrote about this company, we still like the company's prospects. We believe that the exponential growth of the information age will continue to cause bottlenecks on the existing networks. SDL has the products to ease the pain. As demand for its products continue to heats up, investors should expect the shares to soar. [Individual Investor, June 2] Stunned, Says Individual Investor. Last week fiber-optics component maker SDL stunned analysts with a simply phenomenal quarter, blowing out top- and bottom-line estimates. Pro forma revenue increased nearly 92% to $72M million in the quarter, with pro forma net income coming in at $17M, or $0.22 per share, six cents above consensus estimates. Revenue from fiber-optic communications products increased 35% over the fourth quarter, and by 163% over the prior year quarter. SDL, and all the other fiber-optics stocks that II favors, took a dive yesterday in a soggy NASDAQ day. Dave Smith, a co-manager at Loomis Sayles' Global Technology, Small Cap Growth and Aggressive Growth [mutual] funds, is also nibbling away at a few optics companies. ... he's focused on a smaller outfit called SDL Inc., which makes "active" optical networking components. "Demand for these components continues to be strong, not just in the U.S. but all the world," says Smith. SDL reports earnings next week, and Smith thinks it will beat expectations. For fiscal 2000, which ends in December, analysts expect the company to earn 79 cents; in fiscal 2001 the consensus estimate is $1.13. This rapid earnings growth, combined with sharp revenue gains, will eventually propel the stock upward again, he predicts. Late Friday SDL was changing hands for $143 per share, down sharply from its 52-week high of $244.75 [Barron's, Apr 17] Though probabilities favor the stock to outperform the year-ahead market, investors willing to accept above-average risk may be in for a wild ride., says Value Line March 3 in a special coverage of SDL. VL ranks SDL Number 1 (of 5 ranks) for likely price rise and claims it has half the market for undersea 980mm pump chips and could up that to 80% by the end of this year. VL also repeats the rumor of JDS Uniphase 's buying SDL. Consistent with its meteoric rise to $7B market cap, SDL has the largest display at the bustling oversubscribed Exhibit Hall at Photonics West in SDL's home town of San Jose. Only Sony competes in gaudiness of display in a giant hall full of things that flash and wink.Also present with good traffic flow is DOD's SBIR which ran out of handout material and souvenirs. SDL was up another 6% yesterday (Dec 20) to 260 times earnings and a $6B market cap. Did CEO Don Scifres in his wildest dreams in 1992 when he got his first BMDO SBIR foresee such a development seven years later? Could you see such a thing for your company? You may need a longer time horizon since SDL was already a going enterprise of 200 when it formed from the joint venture it had been for ten years or so. Market Action SDL (San Jose, CA) closed above $100, up 6%, the first SBIR company to do so. Ortel (Alhambra, CA) followed last week's up action with another 18% rise. ATMI (Danbury, CT) sank another 16% on fear of soggy earnings; it's now off 40% from its high of two weeks ago. Vixel (Bothell, WA) was up 7% in its post-IPO volatility. SDL 21x Its Low (Aug 27) Former SBIR company SDL Inc (San Jose, CA) shot up another 14% yesterday to a $2.8B market cap which is 21 times its low for the last twelve months. Which makes CEO Don Scifres a very rich man. Said Reuters about Cisco's purchase of two companies The Cisco deal also demonstrates the value of firms working in the fiber-optic market, analysts said. ``It raises the bar and lifts the floor on the valuation of these companies,'' said one market watcher who declined to be named. ``It's hot. This is as hot as it gets,'' said an analyst who asked not to be named. ``The stock is trading at more than 100 times this year's earnings expectations.'' Other players in the fiber-optic market also made major gains on Thursday trade, including E-Tek Dynamics up $6-1/2 to $59-5/8, and SDL Inc. ``All the components companies are up,'' said Patrick Houghton, analyst at Sutro & Co. in San Francisco. If you are doing SBIR proposals to a real SBIR agency, not one that just does what it would do anyway without SBIR, outline the implications of Cisco's move in your analysis of the future of your technology. Show that you understand your world. SDL Buys Polaroid Well, not the whole company. SBIR graduate SDL Inc (San Jose, CA) bought Polaroid's fiber laser business for $5M. Over the past seven years, the two companies have jointly developed fiber laser technology and shared in the production of systems for thermal printing and data storage markets. It is a non-surprise result of the business wherein one Polaroid department supplied SDL which manufactured the fiber laser systems and then sold them back to Polaroid. One management roof now, although Polaroid's part stays in MA. SDL will still sell fiber laser subsystems to Polaroid's Graphic Imaging Div. Although PRD was one of the high-multiple big growth stocks of the 60s, SDL with its close at 100 Friday has a 50% higher market cap than PRD - $1340M v. $932M. Now, just around the corner from PRD is a proud (it says) competitor of SDL in the laser diode business - Spire - whose market cap is still around the $10M it was when it got its first SBIR in 1984 and has had $30M since.Still the CEO shows up to testify what a great program SBIR is. SDL Zooms to 90 SDL Rockets Again After reporting a $4M profit for the quarter,SDL (San Jose, CA) shot up another 24% yesterday to a market cap of $840M. That's now six times its price a year ago. SDL had some SBIR in its early days, although it started SBIR life with 200 employees when it became eligible in 1991. CEO Don Scifres looked executive at Photonics West in January. In contract, Spire (Bedford, MA) which sees itself as a competitor to SDL, has the same market cap it had in the mid-80s when it got tons of SBIR. SDL Gets Swiss Business Two Make Big Profits SDL Sinks All those folks who waited for SDL (San Jose, CA) to fall further last Christmas have another chance. It's back to year opening levels at 14-15 (down 15% yesterday) from its highs in the high twenties despite a "Strong Buy" recommendation by a big broker in August. The reason: one estimator cut earnings estimates by 14% for 1998 and 5% for 1999. That's good news and bad. Good because an SBIR firm is actually making real money from something other than 6% of SBIR contracts. SDL is one of the few companies to outgrow SBIR. The others have a variety of excuses. SDL Rockets (Aug 20) Shares of SDL (San Jose, CA) rocketed 19% to 23+ after CIBC Oppenheimer initiated coverage of the company with a strong buy rating. Analyst Jungjohann said the company has high-growth opportunities in the optoelectronics market. SDL makes optoelectronic integrated circuits, semiconductor lasars and fiber-optic related products. The same kind of strong buy rocketed ATMI last year before the Asian contagion infected ATMI's prospects. SDL had risen from 14 to the mid-20s before the July market swoon. SDL had a healthy chunk of SBIR in the years since it became eligible in 1991 and before it went public in 1995 and then outgrew SBIR last year. SBIR aficionados mght compare SDL's market performance with anaother SBIR user in the same industry - Spire (Bedford, MA) which has had tens of millions of SBIRand still has the same market cap it had in 1985. SDL $2.2M Profit SDL Up Again SDL Makes A Profit (Feb 5) SDL back to profitable. After its one-time giant loss to settle a long-standing claim, SDL (San Jose, CA) made $1.8M for the quarter on $24M sales. Maybe that explains the ever bigger booth at Photonics West. Emcore swallowed a $29M one-time charge and about broke even from recurring business. (Note: one-time losses are often claimed.) The Street liked the picture, lifting SDL 15% yesterday. SDL Earns $2.5M SDL Inc (San Jose, CA) earned $2.5M on $24M sales for the quarter. CEO Don Scifres attributed the profit to more front-end wafer manufacturing capacity. SDL Sells Lasers to Corning (Jul 22) SDL Inc. (San Jose, CA) signed a "multi-million-dollar" contract to supply Corning, the glass company, with fiber-coupled pump modules for use in optical fiber amplifier modules. The innumerate DJ news story implies a competitive market struggle. Corning is the glass company. SDL Unveils Products (Jul 23) SDL Inc. (San Jose, CA) unveiled two visible semiconductor laser products for the data-storage and cancer-therapy markets. A 30 mW 650 nm single mode laser, aimed at high density optical data storage, has enough power for enabling both writing and reading data at high digital video disk storage densities. The second product is a 3W fiber coupled 665 nm laser used in a new method of cancer treatment, photodynamic therapy, relies on a light sensitive chemical ingested by a patient that then accumulates in the tumor.[DowJones Jul22] For the story of photodynamic therapy read "A New Light on Cancer", MIT Technology Review, A/S97. Only a Million Profit Got a good idea for a new product? Keep thinking, it often takes more than one. On average, it took seven ideas to generate a new commercial product in 1995, down from 11 ideas in 1990, says the Product Development and Management Association. The Wall Street Journal, May 1, 97. You must keep thinking because as Nathan Myhrvold says, No matter how good your product, you are only 18 months away from failure. SDL's Profits Down (Apr 18) Like the dog that misquotes Shakespeare, SDL's profits were down for the quarter to only a half-million. But CEO Don Scifres made the usual CEO noises. He has 100 patents, was a research fellow at Xerox PARC, and he still lets magazines (Photonics Spectra, Apr97) publish his picture with fully brown hair. It was not brown at Photonics West 97 where both Don and VP Dave Welch were smiling. Someone smiling always looks younger. Don Scifres has brought SDL into self-ownership, an IPO and a secondary, more than doubled employment since 1991 birth as an independent company (now right out of SBIR eligibility) with sales over $80M. The help from SBIR (at least from BMDO) was for long range, high technical risk innovations. Yes, several were declined for excessive ordinariness. But now the self-funded R&D will have to do both long and short range development. That's what it means to graduate from SBIR SDL Finds A Significant Other (Mar24) SDL Inc (San Jose,CA) announced a significant contract to supply Lucent Technologies (ne Bell labs) with 980 nm fiber-coupled pump modules for optical fiber amplifiers. SDL's largest single order for commercial telco market. SDL Beats Rockwell in MOCVD Claim (Mar 3) A federal court said Bah to Rockwell's claim that SDL Inc (San Jose, CA) infringed Rockwell's MOCVD patent. Rockwell several years ago made a sweeping claim to have invented MOCVD for opto-electronic devices, a practically universal process. SDL CEO Don Scifres said he liked the decision. (Why do newswires report such blather and why do companies say such obvious banalities?) [Metal-Organic-Chemical-Vapor-Deposition] Revenue and Profits Soar at SDL (Jan 31) For the year sales were up by half to $82M and profits were $7M. Stock traders liked the news and jacked the price up 7% to $26 which gives SDL a market cap of $350M. CEO Don Scifres made the usual anodyne noises. Companies like SDL give SBIR a good name and cancel the bleating of a lot of gimme-a-handout sheep. Of course, not everyone believes: Insider DS Evans sold $3.6M of stock in December, 74% of holding, says WSJ, Jan29. So Blue the Laser Cisco has a market capitalization of over $40 billion (much the same as General Motors) yet the firm has barely attracted the notice of the average computer user, much less the anti-trust authorities. The Economist, Dec 7, 96 SDL Revenue Up, Income Down An Action Stock New SDL Pump SDL Inc (San Jose, CA) announced a new, higher power pump for lasers at 980 nm, 120 mW output from the same input formerly delivering 90 mW. With$24.6M revenue for its last quarter, SDL must be an early candidate for honor graduate from SBIR. SDL Profit SDL Inc (San Jose, CA) reported $2.4M quarterly profit and $4.6M for six months. That brings SDL's P-E ratio down to about 30, normal for a growth stock. Which also implies that SDL would soon graduate from SBIR, not that SDL was ever dependent on SBIR anyway. SDL makes laser diodes. Another $45M SDL Inc (San Jose, CA) raised another $45M in a public stock sale yesterday. That makes over $100 in three such sales since 1994. SDL got SBIR-qualified in 1991 by buying itself out from the Xerox-Spectra Physics joint venture. Since then it has nearly doubled, but not on SBIR money. It gets a few SBIRs for the new product ideas and then raises the public money for production (and for cashing out the original investors).
Sangamo BiosciencesSangamo Bioscience up 14% [Oct 30, 08] Sangamo up 12% [Oct 13, 08] Sangamo Bioscience down 11% [Oct 6, 08] Sangamo Bioscience up 21% [Sep 18, 08] Sangamo BioSciences down 14% [Jun 6, 08] despite news that its drug for diabetes-associated nerve damage has yielded encouraging results. Sangamo Biosciences down 10% after an analyst said two trials of a key drug candidate are going to fail. [AP, May 28,08] Sangamo BioSciences down 13% [Mar 10, 08] Sangamo Biosciences down 12% [Nov 12, 07] as a big investor sold some. Sangamo BioSciences up 12% [Sep 18, 07] after the company showed data demonstrating that human CD4 T-cells can be made permanently resistant to HIV infection by treatment with zinc finger DNA-binding protein nucleases (ZFN(TM)) and preferentially survive and expand in an animal after HIV infection. Charities Investing. Fed up with breakthroughs that fill journals rather than medicine chests, private foundations and charities that have traditionally funded academic scientists have started doing the once-unthinkable: writing checks for millions of dollars to for-profit companies. ... Earlier this month, JDRF announced that it was giving $2 million to MacroGenics Inc., a Rockville, Md., biotech, for a phase-2/3 clinical trial of an antibody that might slow progression of type-1 diabetes. [Sharon Begley, Wall Street Journal, Jan 26, 07] MacroGenics has had $2+M in SBIR. JDRF has also funded Sangamo BioSciences (Richmond, CA) $3M, Transition Therapeutics (Toronto) , and TolerRx (Cambridge, MA). Sangamo has also had $2+M SBIR. Sangamo BioSciences jumped 10% on news that it agreed with Dow AgroSciences on "multiple" research milestones in their collaboration to develop plant cell cultures. SBIR $2M over a decade. [Nov 22, 06]
SatCon Technology (Cambridge, MA)SatCon Technology sold its electronics and motor divisions for a total of $5.6 million cash. ... part of the SatCon’s strategic restructuring plan, will enable the company to focus its financial, technical and marketing resources on the growth of their core photovoltaic and fuel cell power conditioning solutions business, ...The company reported $56.6 million in revenue for 2007, while posting a $11.8 million loss. [Mass High Tech, Sep 29, 08] Satcon Technology said that it will deliver its PowerGate Plus inverter to a private European power utility that specializes in renewable energy production. [Boston Globe, Aug 26, 08] Shares of SatCon Technology plunged after the company said its second-quarter loss widened due in part to a jump in operating costs. .... So far this year, the stock is up about 40% [Boston Globe, Aug 13,08] SatCon Technology up 9% [Jul 16, 08] after saying it will increase manufacturing capacity by 50% in the third quarter. SatCon up 13% [Jun 16, 08] SatCon Technology got a new $10M credit line with Silicon Valley Bank. [press release, Mar 4, 08] SatCon Technology borrowed $10M to retire its existing convertible secured notes, [Mass High Tech, Nov 9] SatCon Technology, an early and frequent consumer of SBIR, reports plans to replace David Eisenhaure as SatCon's CEO ... No date or reason made public ... company executed a definitive agreement with RockPort Capital Partners and NGP Energy Technology Partners for a secured $10 million short-term debt financing, ... also reports executing a non-binding term sheet with RockPort and NGP ETP for an equity financing of $25 million of preferred stock and warrants, $10 million of which would be used to retire the new short-term debt. [Mass High Tech, Oct 22, 07] SatCon down 18% [Jul 18, 07] after peddling $4.7M in warrants at a far reduced price from the original plan. SatCon got a new for $2.8M for its PowerGate fuel cell inverters. [Jun 26, 07] SatCon won another Phase 2 SBIR to add to its collection of more than thirty Phase 2s over two decades. SatCon won $2.7M deal for the first stage of a $6.5M development of an energy storage and delivery of 8 megawatts for several seconds. [Mass High Tech, Dec 1] SatCon gets more revenue from a $600K follow-on contract for optically isolated solid-state relays. Now if it could just make some obscene profits. SatCon jumped 14% (back across the dollar barrier) on news of a wider quarterly loss. Hope spring eternal for profits from the $32M backlog. [Nov 16, 06] SatCon jumped 14% back over the $1 threshold in its new home on the NASDAQ Capital Market. [Oct 06] SatCon stock moved to minor league NASDAQ National Market where it no longer needs $50M market cap and a $5 minimum price. The 184 employees have plenty of business $33M in orders that somehow haven't produced the profit and stock trader optimism needed for the major league. (Sep 06) SatCon asked for a NASDAQ hearing about pulling the trading plug. On Sept. 1, SatCon was notified that it failed to comply with the exchange's minimum market value requirements of $50 million over the course of 10 consecutive business days... Founded in 1985, SatCon Technology develops electronics and motors for the alternative energy, hybrid-electric vehicle, grid support, high reliability electronics, and advanced power technology markets. It operates facilities in Boston, Worcester, Marlborough, Maryland, and Ontario, Canada. SatCon employs 184 workers. [Mass High Tech, Oct 6] And has a ton of SBIR money since the mid-1980s. SBIR, revenues, manufacturing all lead to dashed hopes and temporary jobs if they cannot turn a profit. Twenty years seems a long time to wait for steady profitability. When, if ever, should the government give up and divert its SBIR elsewhere? Or is SBIR an open-ended handout to any company smart enough to wangle a R&D government contract? SatCon broke the buck, again, trading below $1 a share despite gobs of revenue and government contracts. [Sep 06] SatCon will close its manufacturing facility in Worcester by the end of the year to streamline operations .... it also says orders have reached an all-time high of $33M, including more than $16M from SatCon's renewable energy products division. [Mass High Tech, Sep 20] SatCon got a $1M order from FuelCell Energy to be used in development of fuel cells. Now if only SatCon could make a profit on all this business. Thta requires getting the cost of sweet technology down below the demand price. Optimists Abound. Another $12M from institutional investors for SatCon. Founded in 1985 and employing 184, SatCon makes electronics and motors for the alternative energy and advanced power technology markets. The company sells to both the private sectors and government agencies, including the U.S. Army and Navy corps. [Mass High Tech, Jul 20] Not even military sales for Iraq could turn the company profitable, having lost $50M over the last three years. It has also had over 30 Phase 2 SBIRs over two decades. The economics avoiders in the SBIR crowd could at least point to the 184 employees which far exceed the amount supportable by just SBIR and the oodles of private capital that has gone into SatCon. SatCon took a 20% nosedive after reporting another quarter of loss despite several new contracts. CEO David Eisenhaure made the required positive noises, I am pleased with the progress we are making towards transitioning into a products-oriented business, ... The steps we have taken to align our organization with our product and market initiatives will bring clarity and focus to our business. [May 06] SatCon got multiple purchase orders from four new customers for 13 commercial grade inverters equaling 2.3 megawatts (MW), including an order the company describes as one of the largest photovoltaic integrators in North America. [Mass High Tech, May 5]SatCon got a short term development sub-contract for an Army starter-generator. Mass High Tech says that SatCon's 170,000 square-foot facility located on Boston Harbor employs 225 people with company revenues of $36M last year. Earlier this week it announced a $1.1M NIST sub-contract for a second 2,200 kVA Rotary Uninterruptible Power Supply (RUPS). Hot news in Mass High Tech - SatCon got a government contract. Great, it's a Phase 1 SBIR, something SatCon has been getting for twenty years. Unlike most of the eastern Massachusetts SBIR firms, SatCon is one of the few SBIR firms in the non-life sciences that went public, but it's not one the even fewer firms that have made consistent profits and a rich ROI for its investors. If Congress ever really intended SBIR to be an economic engine, it put the wrong people in charge. [Jan 06] SatCon's newest auditors also see it as a "going concern" which is the equivalent of a medical diagnosis of still capable of breathing. Its cash position was boosted by sale of its Ling divison as selling the family silver keeps the castle in groceries. Doubters. SatCon ranked # 5 on percentage increase in sextupling the short interest. [Sep 05] SatCon took an upward blip when it announced shipment of components for the hybrid electric vehicle (HEV) market as part of it strategy to make money in hybrid vehicles before it runs out of cash. [Aug 05] SatCon won a $2.8M Army contract for power conversion control. [May 05] So twenty years after winning its first SBIR, SatCon is still alive although also still looking to make any money and living proof that "living dead" is a status that a start-up can keep for a long time on small government contracts. More money trouble at SatCon as it took resignations from its financial VP and a director on its audit committee. Although its losses are eating up the capital being raised, On Jan. 14, the company said its independent auditor maintained a "going concern" opinion about SatCon Technology in the most recently filed Form 10-K. [Bhattiprolu Murti, Dow Jones Newswires, Feb 3] SatCon raised $8M by selling shares at about $1.65 plus a sweetener of warrants to buy more shares at $2. SatCon will sell NIST a 2.2 MW uninterruptible flywheel-based power supply for $1.8M plus an option to buy another for $1.5M. NIST must be expecting either a terror attack on its bureaucracy or more battles with hurricanes. [Oct 04] SatCon's outsource division got a $1.5M contract to build a power supply for plasma trash burners. The Burlington Ontario operation has supplied over 20 of these power supplies to international markets. The foreign manufacturing doesn't seem to bother the SBIR arms of the government who keep shoveling Phase 2 awards to SatCon. Actually, SBIR rules allow a US-owned firm that does its SBIR in America to manufacture all it wants outside the US. That's mostly because the SBIR advocates are American R&D firms, not manufacturers, and government ignores any economic implications of its SBIR actions. SatCon says it booked $2.2M in industrial product contracts. Even though its track record is to lose on contracts but make it up in volume, maybe it could even make a profit. Maybe! SatCon reported another $1M government contract, this time with Energy to develop inverters, advanced of course, for residences (that can beat the power company's diddling the home owner to avoid competition?). But at the rate SatCon loses money on more business, increasing volume should merely put it in the ground sooner. [Nov 10, 03] SatCon has a new cash supply to cover its continuing losses, from its new hoard that it raised from a private placement from nameless investors in a convertible preferred. [Nov 3, 03] SatCon shot up 22% when it announced that it had "successfully demonstrated" the ability of its Integrated Power System (IPS) to isolate power outages in a simulated "all-electric" Navy ship power grid. Ever heard a company talk of an unsuccessful demonstration? SatCon has had $12M of Navy money to far to show that the IPS works. SatCon claims the system has possible application to all future naval electric ships with a market potential estimated to be in excess of $500 million if fully implemented. Maybe with $500 on the top line, SatCon can bring a plus down to the bottom line. Profit in blackouts. SatCon stock has quadrupled in the past month as the market takes a positive view of prospects for even making profits. This week SatCon announced it got the OK from GSA for government agencies to buy from the catalog SatCon's Rotary UPS (uninterruptible power supply). That just means it is pre-approved, it says nothing about whether any agency would actually buy any. Meanwhile, SatCon reported another blue quarter with a net loss of $6.7M as revenues plunged 46%. SatCon sank another 17% to 70 cents after reporting more sickly financials. [May 14, 03] SatCon also got a delisting notice for Sept 15 if the stock price doesn't re-mount the $1. The bank gave SatCon another yard of rope in more time to to make a $15M debt and equity deal. financing transaction. One (of many barriers) is last year's going concern qualification from its auditors. Meanwhile, the stock price languishes under the buck. As SatCon's auditors questioned its "going concern" premise in the face of continuing losses (another $5.4M in the latest quarter), SatCon said it got another $5-7M equity financing. We had a very successful fourth quarter in terms of new business, said David Eisenhaure, SatCon's CEO as SatCon reported $19M in new business booked. Profitability? Have W bang his war drum to divert attention. Who Will Buy a Flywheel?(May 24) For Beacon's new high-power (250kw to 500kw), shorter-duration composite flywheel there seem to be not enough buyers to provide cash before the $30M runs out at $1.5M per month burn rate. Says David Kurzman, an analyst at H.C. Wainwright in Multex Investor (May 25), Composite flywheel technology simply does not make sense for UPS applications. Nobody cares how light your system is when it's installed on or below the ground..... Another problem stems from the very logic of BCON's business model, composite systems, while faster and lighter than traditional systems, carry huge component costs. This tradeoff is acceptable for, say, satellite projects, where weight is an issue. But it's an obstacle to penetration in the terrestrial markets BCON is targeting. Multex says Beacon had no sales in the first quarter, expects no sales of its low-power device in 2002, and looks forward to fewer than 10 orders of its high-power design by the end of the year. SatCon says it got two Army contracts totaling $1.5M to develop novel power electronics and advanced materials technologies for hybrid electric vehicles: one to demonstrate the cost and reliability benefits of silicon carbide based inverters for hybrid electric vehicles, and one to develop a continuously variable transmission that employs SatCon's patent pending magnetorheological fluid technology. Why the news isn't as great as the 10% bump in the depressed stock price: they're two more SBIRs and not much of indication of long term military interest in buying volume production. The company press release doesn't mention the program source, but the Army's August 2001 SBIR list does. In advance of its earning release Monday, SatCon lost another 11% of market cap, down to $27M. It is now down 90% from its high of the past 12 months. Better power management gizmos just aren't selling well enough to make money. SatCon has a substantial boost in its early years in the 80s from SBIR, especially defense that liked the magnetic bearings technology. Now DOD has the bearings technology and SatCon has the pain of losing money. It was a nice ride for a while in the bubble. Beacon Power flywheel running down. With the stock price well below $1 (37 cents) the stock is due for de-listing in mid-June. Although Beacon claims lots of cash, the customers are staying away in droves. Beacon was spun off from SatCon in 1997 to commercialize (sell) flywheels. SatCon is having sinking price problems of its own, although it's still over $2. Flywheels looks like one of those future technologies that will be so for a while. When SatCon warned Wall Street that it would lose something like $10M for the present quarter, the traders whacked the stock price and at least one broker downgraded it. Day's loss 13%. The sex appeal of SatCon's futuristic, alternative-energy products has been overshadowed by the decline of its mainstay electronic-components business. Remember that good old slowdown in telecom spending? Regardless, if SATC can stem the cash burn this year and get revenue growth going again, it'll justify the torturous ride its shareholders have endured. [Multex Investor, Apr 17] Although SatCon says its Power Systems business unit got $1.5M in contacts over the past several weeks, the NASDAQ traders don't seem impressed as SatCon's ship takes on water. SatCon, of course, claims that the orders are a signal of new life in its industrial automation and semiconductor manufacturing equipment markets. But $1M is in MagLev which has a quite uncertain future. [facts from Mass High Tech, Feb 21] SatCon got a $4M extension on its contract with General Atomics to keep developing its Integrated Power Systems. Under the latest phase, SatCon will deliver 100KW and 300KW power converter and control assemblies to be tested as part of the demonstration program for the Navy’s all-electric ship. [says Matthew French, Mass High Tech, Jan 23] SatCon shot up 28% on news that it had cut a deal to peddle Digital Fuel Cell Controllers to Fuel Cell for power plants. APA Optics shot up 21% without news. . SatCon joined a fuel cell demonstration project led by Verizon. SatCon will contribute its PowerGate(TM) power electronics conversion and controls to the consortium that includes Nuvera Fuel Cells, KeySpan Energy, and the Massachusetts Technology Collaborative. At least some of money will coome from the Massachusetts Renewable Energy Trust.If virtual phone monopolist Verizon puts as much energy into this project as it does to resolve customer complaints, it could be a long cold winter. Beacon Power rose 43% from barely anything to barely noticeable at a market cap of $50M as it announced that it sold a 2 KWH flywheel to Cox Communications for back-up power in Phoenix. The past fiscal year was a very busy and productive time for the Company , said CEO David Eisenhaure of SatCon's loss of $24M for the year as revenues rose a lot to $41M. With enough such business activity, a company could go broke faster. The stock price sagged to a market cap of $82M, down 70% from its high for the past twelve months. David Eisenhaure, of SatCon Technology holds an increasingly rare title trifecta among power technology executives. He's the company's president, chief executive - and founder.More and more power technology companies are shedding the brainy folks who started them for company leaders who are more comfortable in the boardroom than the research lab. That transition is a sign of maturation for the still young industry, said John McCormack, of management consulting firm Stern Stewart & Co. in New York. ... Eisenhaure has an impressive resume that includes developing power systems for the NASA, but he admits he can't do it all at SatCon. ... "The first thing you have to realize is you can't end up doing it all yourself," Eisenhaure said. "You start with all the hats, and you quickly realize that you have to get rid of them as fast as you can." The shift from the development stage to the manufacturing stage often is a critical time for founders. "The original founders typically don't have the skills to take it beyond the next stage," said Frank Gibbard, chief executive of H Power, a Clifton, N.J., fuel cell developer. ... at SatCon, Eisenhaure and colleagues are still losing money, but the firm is expected to be among the first power-tech firms to move into the black, according to analyst estimates compiled by Thomson Financial/First Call. H Power and FuelCell also remain in the red. [CHRISTINA CHEDDAR, Wall Street Journal, Sep 11] Lead With the Good News After boasting that revenue was up 22%, SatCon took several paragraphs to get to the news that operating loss for the quarter was $3M. CEO/founder David Eisenhaure said, Our accomplishments during the third quarter demonstrate SatCon's ability to leverage its standard product base and position itself for additional growth. [Translation: hang on folks, our stuff will sell someday.] Wall Street did not panic and kept the stock in its recent trading area down 80% from the 12-month high. SatCon Acquires Another(Jun 27) SatCon will acquire Inverpower Controls Ltd, of Burlington, Ontario, a manufacturer of power electronics modules and advanced high-speed digital controls for use in industrial power supply, power conversion and power quality systems. SatCon paid $100K cash and 400,000 shares of common stock (trading around 10). SatCon sold 1.5M shares at $12.125, a 12% discount to the previous closing price. In principle, the scheme Mini-Secondary(TM) program is generally suitable for growth-oriented public companies with market capitalizations between $100 million and $1 billion and top-tier institutional investors seeking to establish sizable long-term positions in promising middle-market companies. SatCon rolled out a competitor to American Superconductor's D-SMES, developing a 250kW UPS (uninterruptible power supply) flywheel system by end end of the year. SatCon says the steel flywheel would supply power for several seconds until the generator is automatically started. All That Demand and No Profit(May 2)Revenues up 50%, operating loss up 25%. How soon will such a company go broke? SatCon has $7M cash on hand to absorb the regular bleeding.Of the $8.5M revenue, $3.0M comes from funded R&D - someone else's contract work (mostly the US Navy). Here's a power technology company that doesn't make money in a US that is in power shortage crisis talk with Vice-Presidential task force making political hay by pretending that the previous administrations had no policy. SatCon lost either $5.6M or $2.3M for the quarter depending on how you view an accounting adjustment for warrants and investments. The operating loss of only $2.3M was a slight improvement. California, Have Some Power. SatCon announces a new family of uninterruptible power supply (UPS) products at the Los Angeles Power Association Winter Conference to provide up to 2.0MW of power during power outages. The StarSine MegaPower UPS will combine Ling Electronics' StarSine power converters and controls with commercially available battery banks or flywheels to provide uninterruptible power during brownouts or blackouts, such as the rolling blackouts that have recently affected certain regions in California. Note that the product does not create power where their is now fuel to run the gadget(s). But dule is easier to stockpile against an emergency than kilowatts are. Now, if SatCom could just make money atop all the new product announcements. Its stock price is about double its 1992 IPO price and a third of its high for the last twelve months. SatCon Technology rose 10% when it said that it has been selected by the U.S Navy to develop modular motor drive systems for the Navy's DD21 ``all-electric'' ship. Under this award, SatCon will develop the initial design and perform simulation studies for a modular motor drive that will be designed to be compatible with several different motor types. Motor drives integrate electronics and controls within a motor to perform specific motor control functions. The initial study phase is valued at approximately $200,000. SatCon recently was awarded a $2.7M subcontract to design and develop the integrated power conversion system for the new ship. ``We're pleased to be selected to develop another system for the Navy's DD21 `all-electric' ship,'' said David Eisenhaure, SatCon's President and Chief Executive Officer. ``The DD21 represents a growing trend in the conversion of vehicles and heavy machinery to `all-electric,' thereby creating a new and broader sector for power electronics. SatCon, a heavy user of SBIR, has shown a number of ways to lose money in its commercial business and such Navy work will at least keep the doors open.
SatCon makes all sorts of cutting-edge power things: contract engineering, motion-control products and power converters. They also hold a nice big piece of Beacon Power, the cutting-edge flywheel maker. Top line revenue is up 21% this year. The market is giving these folks the cold shoulder right now. The stock is down more than 50% from its high in March. But don't count these guys out. Their R&D is up big. If anybody is going to get the future right, it is these rock-solid engineers. SatCon took a whack of 23% to less than 40% of its recent high which was based on the dream that alternative energy, especially fule cell, would soon score big. Alas, the dream faded with the NASDAQ "corredtion", which knocked profitable AstroPower down half from its peak also. Semiconductor Ibis down 14%. Emcore down 10% to a third of its high. The story stocks that rode high for a couple of years now need profits to keep flying. SBIR stocks often take a long time to make a steady profit.The two dozen public SBIR companies don't make much money as a percentage of their market cap. As a group they are trading at pie-in-the-sky multiples, although not nearly so high as a month ago. Fuel Cell Mania. Fashions come and go. Fuel cell suddenly got hot when MSFT MoneyCentral column Wednesday did what brokerage recommendations couldn't do in October -- focused investors on fuel cell technology. SatCon Technology soared 22% Friday, although even that did not get to its all time highs of 2-3 years ago. New technology developments to warrant the new fashion? None noted. SatCon still gets a lot of government low-profit business while holding out the promise of obscene profits from commercial winners (that somehow don't seem to catch on).
SatCon Struggling (Dec 30) SatCon reported another quarterly loss along with the usual CEO remarks about progress, we've made investments in new products that, combined with our recent acquisitions, will position SatCon for future growth and increased revenues in 2000 Revenue of $4M produced a loss of $2.5M up from $1.6M. Said CEO-founder David Eisenhaure,, ``This has been a milestone year for SatCon. We introduced several new products for our traditional markets and entered into some new markets as well. We've also taken significant steps for future growth through acquisitions that enhance our manufacturing capability, while providing us with additional revenue.Over the past year, we have had some significant new product developments which will benefit greatly from our recent acquisitions, In particular, at the Tech Center, we have been working to deliver our power inverters for fuel cell power generation systems. And with the addition of our new SatCon Electronic Power Products in Maryland, formerly Northrop Grumman's Power Products Group, we are now positioned to be the leader in power electronics for fuel cell and micro-turbine power inverters. We believe that we are currently positioned to be the leader in this marketplace. That's the kind of soothing blather that SBIR proposers throw at government, not what a fats growth company says seven years after its IPO. Says an observer on Yahoo's massage board, a very dismal report. Lets see we added 3 news businesses this year and sales for the 4th quarter are 4.0 mill vs. 3.8 million last year. Even though it was Christmas Eve in a slow TV slot, the Yahoo message board says SatCon CEO David Eisenhaure on First Business was discussing the flywheel technology and it's ability to provide backup power for utility companies. He was followed by a Merrill Lynch analyst with positive comments on Satcon. I darn near fell out of bed!!!! But then SatCon has a lot optimistic stories that jolt the stock briefly only a little. It smells like another company with technology of the future. SBIR's proposal bins and government tech-transfer rags teem with such stories. The Customer Likes It SatCon Gets $8M(Aug 30) SatCon Technology (Cambridge, MA) sold $8M of a Convertible Redeemable Preferred Stock in a private placement. SatCon says its capital needs are growing from increased product sales - always a good sign. Film Microelectronics revenues up to $2.1M, an increase of 85%. Magmotor revenue up 40%. SatCon says it will use the $8M to enhance its manufacturing base, make future acquisitions, and other corporate applications that better position SatCon for its continued growth and future opportunities - the usual story. The question is how much does this $8M dilute existing stockholders. SatCon Not So Rosy (Aug 17) Among the rosy pictures of SatCon Technology's earnings, the accountants found thorns. Now SatCon has to restate past earnings and take a big one-time (allegedly) hit of $7M plus restating two previous quarters to $1.3M losses. SatCon was and still is a big SBIR user that was trying to emerge into self-sufficiency. Now the accountants say that the probability of success was over-rated and that reserves are inadequate. Such is the price of the advantages of a tech firm living in the fishbowl of public ownership and the accompanying paper wealth of the owners. SatCon Soars 76% (May 3) SatCon (Cambridge, MA) got a 76% market boost when it said, an additional order for electric motors and controllers for use in fuel cell vehicles from Opel, General Motors' German partner for alternative fuel vehicles. ... ``With our recent award of $10 million by the Department of Energy to develop low-cost, advanced power systems for fuel cell and other hybrid vehicles, ... received a contract from Plug Power to supply power electronics building blocks (PEBB) modules for use in residential and small commercial-sized fuel cell power systems. Plug Power expects to begin selling residential-sized systems in 2001 and small business-sized units by 2002. .. a joint venture between DTE Energy the parent of Detroit Edison and Michigan's largest electric utility, and Mechanical Technology , an early developer of fuel cell technologies. SatCon is an SBIR success story although it took a lot of kerosene to make a fire.
SatCon Navy Contract (Feb 10) SatCon Technology (Cambridge, MA) says it got a Navy SBIR Phase III [that's after SBIR] for the shipboard evaluation of SatCon's modular drive system that provides clean electrical power conditioning and a variable speed permanent magnet motor. SatCon says it developed a system to standardize on 50 HP and 15 HP that can accommodate any AC motor or static inverter from 15 HP to 500 HP. CEO and founder David Eisenhaure, said, Electrification and energy management are undergoing significant structural changes. We can then offer this to the commercial marketplace. It follows on the heels of the $10M Automotive Integrated Power Module (AIPM) award from DARPA to develop the standard low-cost power module for hybrid electric and electric vehicles in conjunction with a consortium of the Big Three auto manufacturers. This helps establish SatCon as a key player in power management electronics and drive systems. Sound like SatCon deserves the pounding its stock is getting as it continues to dribble out profit at the margin of survivability? Government R&D contracts are nice for paying bills but not for making profits. Because no matter how tight your competitive corner on a product, the government will only buy at a small markup from cost. And even if you somehow induce a procurement officer to buy at a high markup, another arm of government will come along eventually to blow the whistle and collect the overpayment. Sat Con has lots of SBIR since 1987; the DOD likes SatCon's power products that got their early start with Star Wars' magnetic bearings for power in notional space weapons. SatCon Loses for 98 (Dec 18) SatCon Technology (Cambridge, MA) has 24% more revenue in 98 than in 97 but atill a net loss of &763K. Which is better than losing $6M+ last year. It also said it will buy Inductive Components and Lighthouse Software. SatCon got an early start with SBIR in 1986. SatCon Technology's Magmotor Division is marketing a new brushless DC servo-motor line designed to provide the highest possible torque in the smallest amount of space. It uses traditional SatCon technology to create higher power density than traditional brushless motors in the $250M machine tool and factory automation markets. SatCon Technology (Cambridge, MA) says its Film Microelectronics subsidiary has signed a contract with a "major government aerospace contractor" for the production of its combined power and mixed signal hybrid to be used in a critical air force application. The value of the contract is valued at a minimum of $2 million and could go as high as $3 million. [Business Wire, Sep 24] Flywheel for Your Phone (Sep 11) You've already noticed that in a power blackout, your phone still works. Now Bell Atlantic wants to protect that even more with a flywheel by testing Beacon Power Corporation's 20C1000 Cable/Telecom Flywheel System. last week Swiss ABB AG's Electric Systems Technology Institute (ETI) took on such evaluation. Says Beacon CEO Bill Stanton The agreement[s] not only lend tremendous credibility to the technology's potential, but confirm our belief that the market for it is significant. We look forward to announcing additional field trial agreements with other industry leaders in the coming months. Bell Atlantic has about 20,000 remote terminals that serve some seven million customers where several flywheels will replace lead-acid. [Business Wire, Sep 8] Beacon is a subsidiary of SatCon Technology (Cambridge, MA) a big SBIR user all the way back to its infancy when it developed power technologies for the hypothetical giant space platforms with hypothetical lasers and electric guns for shooting down ICBMs. SatCon is one of the few such early SDI "developers" who made something commercial out of SDI's SBIR money. BMDO (the democratic name for SDI) is still putting all its SBIR money into dual-use technology (although the politically correct name of the strategy keeps shifting). Cable TV Flywheel Trial (Sep 4) Asea Brown Boveri AG's Electric Systems Technology Institute (ETI), a world-renowned power transmission and distribution laboratory, will evaluate Beacon Power Corp's 20C1000 Cable/Telecom Flywheel System in its innovative power quality systems demonstration laboratory. The agreement, along with the previously announced agreement with San Diego Gas and Electric, is part of 14 field trials with leading cable television, telephone and wireless service providers and their suppliers. Beacon also announced that it has shipped the first of these field trial units to WinDBreak Cable, a Nebraska cable television operator. The Company's unique, patented uninterruptible power supply(UPS) system will replace conventional, less reliable lead-acid batteries to provide emergency power to WinDBreak's cable network in case of a commercial power outage. [Business Wire, Sep 1] Beacon is a majority-owned subsidiary of SatCon Technology (Cambridge, MA) which got a big start in its Active Motion Control from SBIR from 1986. Now They Wanna Sell (Aug 4) Individual Investor downgraded Sat Con Technology (Cambridge, MA) from buy to sell because it says SatCon concentrated on the medical application markets instead of meat market (as was planned originally), and the delay in introducing SATC's RIBS technology to the market this year. The stock did fall last week. SatCon started the year as one the advisory's top 25 for 1998 since which it has sunk 34%. Two of the other 24 are down similar percents buy still rated buy. SatCon Buy Back (Jul 31) Got extra cash with your stock price slipping (especially if management's compensation is tied to the stock price)? Invest in yourself: buy your own shares back from the public. Thus does SatCon Technology (Cambridge, MA) prepare to buy back 5% of its shares while asking the government for R&D free SBIR money. Should government then declare SatCon self-reliant and stop SBIR awards? Fat chance. SatCon Ships (Jul 22) SatCon Technology shipped the first 200mm production Integrated Motor and Suspension (ISAM) product to the semiconductor equipment industry. Currently, SatCon has product offerings for both 200mm and 300mm wafer fabrication equipment. Said founder-CEO David Eisenhaure, "The shipment is a major milestone for SatCon. We have successfully transitioned our magnetic levitation technology into three other production products for the semiconductor equipment industry.'' The technology traces back to the SDIO SBIR in 1986 when SatCon had six employees. Still, the stock trades at half its high despite enthusiastic recommendations by Individual Investor. Maybe because it is easier to make technology than to make profits. One great fan of SatCon Technology (Cambridge, MA) says, Food poisoning continues to dominate the headlines, emphasizing the importance of SatCon's biological sensor "RIBS" which detects bacteria in contaminated meat. A June 29 Wall Street Journal article reported that an outbreak of food-born illness sickened about 5,000 guests at graduation parties around suburban Chicago. The article noted another serious case involving ten children stricken with a more deadly E-coli strain in Atlanta water park... Given this report and many other recent cases in which meat and poultry were found to be contaminated, consumers have been getting more concerned about food safety. Unfortunately, bad news is good news for SATC. We continue to rate the stock a buy. [Individual Investor On-line, Jun 30] SatCon A Buy? Says Individual Investor in a May 6 Chat Shop: We still rate [SatCon Technology (Cambridge, MA] a buy. We are waiting for the RIBS technology to enter the market by the end of 1998. The company should become profitable this year due to strong contract growth and new products. Earnings should come in at 14 cents per share. The newspapers are filled every day with another large case of food poisoning. The latest scourge being in Florida, where more than 1000 people were affected. Satcon's RIBS technology can help companies produce food with no poisonous substances in them. Obviously we think the potential for a product like that is enormous. I wonder why RIBS is an anagram for SBIR. SatCon Loses Again(Mar 2) SatConTechnology's revenues for the first quarter increased more than 73 percent to $3.7M but the loss was about the same $670K as last time.... Said CEO Dave Eisenhaure about the expensive move of subsidiary Beacon Power to antoher place in the Boston area," We are very excited about this transaction, as it is the next logical step in the evolution of Beacon Power to an independent operation. At least this heavy SBIR user had half its revenues from commercial sales. Things can't be all bad, though; SatCon's stock was the 12th biggest percentage gainer one day last week, perhaps on the publication of Forbes's (Mar 9) story on SatCon's inspection scheme for e-coli.
Individual Investor Analysts selected [SatCon Tech] as one of the Top 25 stocks to own in 1998. What e-coli-logical Timing! SatCon Engine to Nowhere? (Aug 13) SatCon Technology (Cambridge, MA) got a contract for $1 million from a major (unnamed) aircraft engine manufacturer for more development of magnetic bearings for aircraft turbine engines. The work was started in support of the Air Force. Nice work, will it lose another $100K on the deal as it lost 11% of its $3M revenue for the quarter? Will it make up in volume what it loses on each project? After great hopes since its first SDIO SBIR in 1986 and its 1992 IPO, SatCon has struggled with loss after loss as revenues still come from government R&D contracts. Government contracting for R&D only sounds like a prelude to money-making procurement contracts. DOD especially looks like a poor prospect for another decade as a hardware buyer. Still it sends money to small firm R&D (it has no choice under SBIR law) which far too many firms read as a procurement precursor. The smart course: take DOD's R&D money but aim for the civilian market which is awash in money. Two New SatCon Products (Aug 8) SatCon Technology (Cambridge, MA) announced two new product lines as its stock price keeps sagging after continuing losses in the five years since the IPO. The new products are called Power Electronics Building Blocks and Power Smart Motor Controllers. Doing It All in Active Motion Control SatCon Technology's announcement of its "Power Smart" electronics to make a classier auto alternator brought a stock price jump of 24%, seventh highest on NASDAQ. That jump despite another soggy earnings report of losing $300K for the quarter. A few days before, another SBIR user was the top percent gainer, Ibis Technology. Another SBIR for another favored public company - SatCon Technology (Cambridge. MA), an Air Force Phase 1 for a gimbal to help point satellite antennae. SatCon's Tucson division will do it. Ships First Production Units SatCon Buys Film MicroElectronics(Apr 10) SatCon Technology (Cambridge, MA) signed a deal to acquire 30-year old Film Microelectronics (N Andover, MA), a $5M supplier of custom integrated circuits. Since SatCon has a small market cap and is not profitable and has a decent percentage of its revenue from SBIR, a regular maker of anything salable must be a welcome addition. SatCon Technology $700K(Mar 18) Sat Con Technology (Cambridge, MA) announced $700K more in government development contracts (guess SBIR). Continuing good news for SatCon's R&D department survival; indeterminate news for SatCon's future as a vendor of profitable products. Public since late 1992 and still not turning a regular profit. President David Eisenhaure keeps up the required optimism about how the $50M in development contracts in the past five years have led and will lead to products. The government requires such statements and optimism in SBIR proposals but rarely asks whether they have any substance in a contest too often larded with imaginary commercialization scenarios. First Production Order Impacted by Commercialization Buy and Try Flywheel(Feb 3) San Diego Gas & Electric will try a SatCon Technology (Cambridge, MA) flywheel to store energy for cable TV. SatCon's flywheel technology got boosts from Star Wars SBIR in the 80s when Star Wars was exploring flywheels for big space platforms. When the space platforms fell out of favor (far too complicated), SatCon continued developing the flywheels for real world competition in a variety of military and commercial energy storage uses. Flywheel profits seem still a ways off until the bugs are worked out in the minds of users who need reliable energy storage. Flying Flywheel(Jan 23) Cambridge to Tucson to orbit. SatCon Technology (Cambridge, MA) announced a $2M contract from USAF for a flywheel-based satellite power and attitude control. System. SatCon's Tucson division will do the work Flywheels store energy in the form of angular momentum as an alternative to batteries. Looks like the flywheel will work on space before it works in Chrysler's car of the future. And the longer that takes, the longer SatCon will depend on government's 7% profit contracts for a livelihood until the hopes for the 1992 IPO come true. SatCon Loss SatCon Acquires Profitable CompanyOne way to get profits in to buy them. SatCon Technology (Canmbridge, MA), saddled with a string of small losses, acquired proifiable K&G Magmotor (Worcester, MA) for undisclosed terms, and projected more losses for the present quarter. More SatCon SBIRAnother SBIR million went into SatCon Technology's (Cambridge, MA) coffers from NASA, Navy, and Army. "a key link in SatCon's strategy", says founder David Eisenhaure, the same speech in 1987 at his first SDIO SBIR. The press release avoids ratios like percent of revenues from programs designed to give fledgling businesses an opening. SatCon's grand plans from its 1992 IPO seem to have been waylaid as it scoops up $3.7M from 1996 SBIR program awards. $3.7M is enough to employ about a third of the company, an inferior outcome after a decade. SatCon, like almost all the top SBIR winners, exploits the government's inability to coordinate SBIR investments in companies, an inability intended by Congress to the delight of the agencies dominated by their technical experts. From BetaTest to LOIdelivered some beta-site test and evaluation components that we developed with them. The components have been performing well, Applied Materials is excited about the technology Thus says SatCon Technology (Cambridge, MA) about a Letter of Intent with AMI, a $3B company. The vague press release suggested that SatCon's active motion control could show up (behind the walls, of course) in AMI's semiconductor that wafer machines. SatCon had a helping hand from SBIR in its infancy long before it wet public in 1992. SatCon Spins at Intelec $75K Award is News? Profit Interruptible, Not Power SatCon Technology(Cambridge, MA) lost $0.5M on revenues of $2.1M for the quarter. It delivered beta-site units to Delco-Remy for an advanced alternator. SatCon has gone from 80% government to 70% commercial over the last eight years. SatCon had six employees in 1986 when it got its first BMDO SBIR. It went public in 1992, the first BMDO SBIR company to do so. Its initial euphoria over the deal with Chrysler for the Patriot racing car cooled when Chrysler cooled on racing. Savi Technology (Mountain View, CA)The Navy's one-time SBIR poster child, Savi Technology (Sunnyvale, CA), is in the thick of securing cargo containers with smart electronic seals, says MIT Tech Review (Sep 03). Of course Savi's not the only company and/or institution to have the great idea for container security since the task needs more application engineering than breakthrough innovation. Savi Raises $20M (May 7) Savi Technology raised $20M for its campaign to sell its tracking gizmos to the commercial world, says the Wall Street Journal. Savi is the Navy's poster-child for SBIR because Navy gave Savi an award for an application of its radio transmitter technology that flunked marketing for tracking children with bracelets. UPS liked the technology enough to invest in Savi but won't be adopting it anytime soon. Was that a good use of SBIR which is supposed to be an innovation nursery? It is at least as good as you should expect from a bureau which found a happy combination of utility, low risk, and a rare commercialization story. Savi claims $200M in military sales. The again private firm was first bought by Texas Instruments, traded to Raytheon, and then bought back by corporate investors. Savi Technology, now a subsidiary of Raytheon via Texas Instruments, won a Motorola protest to GAO for a $111M contract. Savi is the Navy's SBIR poster-child. [facts from WSJ, Dec 23]. Get DOD's SBIR/STTR news by e-mail. To subscribe. Savi Gets $111M Contract(Aug26) The Navy's SBIR poster-child, Savi Technology (Mountain View, CA), will get $111 million from DOD to track military supplies with its radio transceiver. Savi is now a wholly owned subsidiary of Raytheon (having been bought out by TI which sold its military business to Raytheon). Says the Silicon Valley Business Journal Savi received its first DOD contract in 1994 [for] $70 million which was scheduled to expire this year. During the prior two years, the company had received $2.5M from DOD through SBIR, a little-known federal grant program. Savi makes cargo tags to track cargo at distances of up to 600 feet. By today's info-tech standards, it's a low-tech smart card and driven more by cost than technology. Scientific Research (Atlanta GA)Efficient Ears. On average, companies generated roughly $28 in earmark revenue for every dollar they spent lobbying. By any standard, that's a hefty ratio: The companies in the Standard & Poor's 500-stock index brought in just $17.52 in revenues for every dollar of capital expenditure in 2006. ... Says Keith Ashdown, chief investigator for the watchdog group Taxpayers for Common Sense: "The lion's share of these projects is about politics and jobs, rather than real needs." [Business Week, Sep 17] The earmark efficiency champ is an SBIR company, Scientific Research (Atlanta GA and others; about $15M SBIR), that got $344 in earmarked funds per dollar of political "investment".Other SBIR investors: Isothermal Systems (KY and WA; $2M SBIR) at $221 per lobbying dollar; Prologic (Fairmont WV; $2M SBIR) at $133 per dollar; Trex Enterprises (San Diego CA; $7M SBIR) at $116 per dollar. From an efficiency viewpoint, politicians make a good investment. You just have to learn how to kiss frogs. Scientific Solutions (N. Chelmsford, MA) )Scientific Solutions (N. Chelmsford, MA) got Laurin Publishing’s prestigious 2001 Photonics Circle of Excellence Award in recognition of their NIR High-Resolution Liquid Crystal Fabry-Perot Etalon, a next-generation tunable optical filter optimized for use in the Near Infrared. Product worthiness is based on uniqueness, importance to the industry, and technological achievement. The awards go to 25 technically innovative products. SSI’s President John Noto accepted the award at SPIE's Photonics West. Some of the development capital came from SBIRs from NASA, Air Force, BMDO, and Energy. [SSTI, Jan 25,02] Scientific SystemsLoving Experience. Scientific
Systems (Woburn,MA; $50M+ SBIR) won a NASA JPL
Phase 2 SBIR for Distributed Formation State
Estimation Algorithms Under Resource and Multi-Tasking
Constraints. Creare (Hanover NH; $120M SBIR)
won four NASA JPL Phase 2 SBIRs. Intelligent
Automation (Rockville MD; $100M SBIR) won
three NASA JPL Phase 2 SBIRs. Physical Optics
(Torrance, CA; $200M SBIR) won one NASA JPL Phase 2
SBIR. Radiation Monitoring Devices Scynexis (Durham, NC)[Frenchman] Yves Ribeill, CEO of drug chemistry company Scynexis (Durham, NC; no SBIR, 130 employees), found a way to combine his passion with his business. Last month, he worked out a deal with the Drugs for Neglected Diseases Initiative [which] is paying Scynexis $17M over five years to help find safer medicines to treat sleeping sickness, also known as human African trypanosomiasis. ... Founded in 2000 by 24 scientists who worked at Aventis CropScience's headquarters in Research Triangle Park [Sabine Vollmer, Raleigh News&Observer, Dec 27] Chemistry-focused drug discovery and development company Scynexis (Durham, NC), no SBIR, is thinking IPO by partnering with large pharmaceutical companies. [Raleigh News and Observer, Jan 9] Its roots lie in France and Switzerland. SD Catalyst Group
Grab Your Politician for Plus-Up. Smaller and more transparent earmarks of federal funds for favored domestic projects are returning after a one-year moratorium on the controversial practice. ... a bit less than 1% of total R&D appropriations (3% for DOD) ... The Senate Top 10, are mostly smaller states with senators in key committee chairmanships—Mississippi, New Mexico and Tennessee are at the top. ... search AAAS's new database of 2008 earmarks [AAAS Newsletter, Sep 07] But for small business, even 1% is a big honey pot. In the list (August version): Electro Energy (CT; SBIR), Ocean Power Technologies (OR, SBIR in NJ), DBS Energy CT, Eikos (MA; $8M+ SBIR), Cellular Bioengineering HI, Cerematec (UT; SBIR), Ramgen WA, Advanced Radar Technologies WY, Compact Membrane Systems (DE; $20M SBIR), SD Catalyst Group SD. Your story is that high-tech small business will create jobs, and they don't know whether your claim is valid or just wishful thinking. Like the federal mission agencies who then have to award and supervise the contract, they don't seem much to care.
SeaChangeSeaChange's (no SBIR) hiring spree is typical of a class of high-tech businesses in Massachusetts that have proved virtually immune to the economic slowdown. These companies sell into global markets that provide a cushion as the US economy struggles with everything from mounting home foreclosures to a plummeting stock market. In many cases, they also offer products that enable them to benefit from economic downturns, when consumer spending is restrained and businesses cut costs. [Robert Weisman, Boston Globe, Mar 13] Note that such economic spinoffs and opportunities do NOT come from government R&D service contracting; they come from companies offering new business opportunities to the wide world. Almost all the economic arguments made for SBIR by the beneficiaries are self-serving blarney.
Seattle GeneticsSeattle Genetics up 13% [Oct 28, 08] Seattle Genetics down 13% [Oct 15, 08] Seattle Genetics up 13% [Oct 13, 08] Seattle Genetics down 10% [Oct 3, 08] Seattle Genetics said it has entered a deal with Japanese pharmaceutical giant Daiichi Sankyo to develop anti-cancer therapies. The deal will give Seattle Genetics an upfront payment of $4 million, plus royalties [Seattle Times, Jul 9, 08] Seattle Genetics said that an experimental drug to treat Hodgkin lymphoma and similar cancers showed a strong patient response in early clinical trials, [Angel Gonzalez, Seattle Times, Jun 4, 08] Seattle Genetics raised $97M from a stock sale. [Seattle Times, Jan 24, 08] Seattle Genetics down 12% as it said it plans to sell 10 million shares [Jan 14, 08] Seattle Genetics ($1M+ SBIR) said it received a $4 million milestone payment from partner Genentech to begin an early clinical trial on its lead blood-cancer drug. [Angel Gonzales, Seattle Times, Jan 9] Seattle Genetics ($1M SBIR) said it had begun a new mid-stage clinical trial for its SGN-40 anti-cancer therapy, triggering a $12M milestone payment from research partner Genentech. ... could receive up to $800M in payments from Genentech upon hitting research and regulatory milestones [Angel Gonzalez, Seattle Times, Dec 8] Seattle Genetics up 15% [Feb 1, 07]
Seattle Medical TechSeattle Medical Technologies, a medical-device startup founded by the prolific inventor Clif Alferness, has raised at least $8.6 million in venture capital ... from two prominent investment firms that have backed Alferness in startups before ... Alferness, who has diabetes and wears an insulin pump, has inventions in a wide range of medical areas — including the heart, lungs and esophageal tissues. [Luke Timmerman, Seattle Times, Oct 21]
Secure Computing (Minneapolis, MN)Secure Computing up 23% [Sep 22, 08] on its sale to McAfee for $465M Secure Computing down 11% [May 2, 08] to a year low after [it] said its first-quarter net loss widened 68 % on litigation costs and slow sales. [AP] Secure Computing took a 38% cold shower (7/12/06) after cutting its quarterly revenue estimate.by 10% . Among the losers was Secure Computing Corp, a network security service provider, which went public in November 1995 at $16, soared to close at $48.25 on its first day and now trades at just $6.25. Investors who snapped up the stock at the close of its first day would have lost almost 90 percent of their money. [San Jose Mercury, Jul 30] The vicissitudes of IPO. Seldon Labs (Windsor, VT)Year-old Seldon Laboratories (Windsor, VT) Seldon Laboratories (Windsor, VT) got a $2M AF contract to develop post-prototype water filters from carbon nanotubes. In principle, the military can simply put almost any available water straight thru the filter into mouths or veins. [Small Times, Apr 26] Then long convoys will not be needed to transport water from Kuwait in plastic bottles. The web sites of DOD and the company show no sign that the prototype came from SBIR. Seldon claims that its nano-tubes create a "kill zone" capable of destroying all shapes and all types of bacteria and virus, as well as other pathogenic microbes such as the common Cryptosporidium parvum and Giardia lamblia. If it works as advertised, it sounds like the best carbon thing to come along since activated charcoal. Why didn't the AF use SBIR to develop the device? Too slow! If you have such a breakthrough that you can prove, the DOD will not waste its nor your time diddling with slo-mo set-aside programs. It may have helped get inside the Pentagon door that a co-founder was Roger Kennedy, former CFO of the Ford Foundation, Director of the National Park Service and Director of the Smithsonian Institution. The anchor-man is Chris Cooper who worked a dozen years on nanotubes at Dartmouth from the days of his PhD.
Semiconductor Laser Inc (Binghampton, NY)$100M By 2000 (Feb 12) At least one financial wag foresees $100M revenue for Semiconductor Laser International (Binghampton, NY) by the year 2000. SLI is the creature of Goeff Burnham, who once got SDIO SBIR at a company in Ithaca, NY, with the exclusive right to an Al-free laser from Manijeh Razeghi at Northwestern University who in turn credits DARPA with the enabling funding. SLI also got an exclusive license through a CRADA for an Air Force MBE technology for which it just got delivered the world's first MBE crystal growth reactor. Along with the CRADA came the Air Force inventor to manage the machine. Getting out the Al allows laser life to run years instead of days (so far at least in Illinois). Of course, Northwestern was far from the only institution working to eliminate aluminum; Ortel (Alhambra, CA) for one was also trying with BMDO SBIR. SLI's deal give Northwestern 10,000 shares of SLI stock and royalties. | |||||||||||
