06 Dec Bio-Logic Systems, another Midwest life-science firm, flies under the radar
Over the last two years of writing this column, I have become aware of a lot of life science companies headquartered or operating in the Midwest. Part of the challenge of this column has been to bring them to the item of my readers.
Though many Midwest life science companies are well known, often a number of them are flying under the radar screen of awareness. Rarely, however, has been it the case where I have never heard of a company (particularly a publicly traded company).
As you may know, I got stumped last week with the uncovering of the Perrigo Company in Michigan, which some of my M.B.A. students actually alerted me to before I knew about it. Through a totally different circumstance, I became aware this week of yet another publicly traded company that’s almost in my backyard.
It’s Mundelein, Ill.-based Bio-Logic Systems Corp. (NASDAQ: BLSC).
With a market cap of about $40 million, annual sales of about $30 million and annual net profit of about $2 million, this Illinois medical device company develops and markets computer-based diagnostic systems for use by hospitals, clinics, universities and physicians.
The diagnostic procedures performed by the company’s systems include:
According to the company’s Web site, Bio-Logic Systems was founded in 1979 as a one-product company. It has evolved into a neurodiagnostics company with sales in more than 40 countries. About 19 percent of total sales (or about $5 million annually) happens in international markets including Japan, Canada, Brazil and the U.K.
This year, the company is celebrating its 25th anniversary. With more than 150 employees, Bio-Logic Systems has traded on the Nasdaq since 1983.
Its stock jumped last week from about $7 per share in October and early November to $9.44 share, which is a 35 percent jump. It was trading at about $5.40 per share a year ago. It’s up about 75 percent for the year. It has traded as high as about $15 per share in early 2000 (remember that anything in the biotech field was hot that year).
So, why the increase?
According to the TheStreet.com’s report on Sept. 21, the company had a 67 percent increase in second-quarter earnings on a 19 percent jump in sales. The company’s profit was 15 cents per share versus profit of 9 cents per share from the prior year.
On Nov. 10, 2004, Motley Fool provided a short but sweet endorsement: “If your appetite for risk can stomach an even smaller … competitor of Natus, you may find a better bargain in Bio-Logic Systems. That one’s already profitable and it has a very nice free cash flow to boot.”
Is this what drove the stock price up recently? Bio-Logic Systems doesn’t put out a lot of press releases. There are only four this year. They basically cover the standard financial results of each quarter. The last press release was on Sept. 24.
It seems that the recent FDA approval of the company’s 510k application (the device equivalent of an NDA for a drug) for its HALO Ear Muffin (which is designed to reduce ambient noise for babies) may be one of the reasons.
According to its Web site, the company shows lots of new products being introduced. These include:
1) The Navigator Pro M.A.S.T.E.R. (Multiple Auditory Steady-State Evoked Response) infant audiometer for testing hearing thresholds in infants.
2) Ceegraph VISION, which the company says is the first digital EEG system allowing a physician to bring such a system to the patient’s bedside.
3) Sleepscan VISION, which, to be honest, I couldn’t quite decipher what this product is used for from the techno lingo on its Web site.
It appears that Bio-Logic Systems evolved out of Northwestern University. Its current CEO, Gabriel Raviv, who has been with the company since its inception, was previously director of the Clinical Research Instrumention Laboratory at Evanston Hospital (an affiliate of Northwestern).
He received his master’s degree in electrical engineering and his doctorate in computer sciences from Northwestern. While this company doesn’t quite have the legs that Perrigo has, it’s also clear that (like Perrigo) it has:
Unlike Perrigo, it has not yet acquired overseas operations directly. It appears to be selling via distributors in different countries. Nevertheless, it is rolling out innovative new products on a regular new basis, expanding its activities around the globe and making money! All in all, it’s an interesting company and strategy.
See you next week!
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Michael S. Rosen is president and CEO of Barbeau Pharma and a founder and board member of the Illinois Biotechnology Industry Organization (IBIO). He can be reached at rosenmichaels@aol.com. This article has been syndicated on the Wisconsin Technology Network courtesy of ePrairie, a user-driven business and technology news community distributed via the Web, the wireless Web and free daily e-mail newsletters. They can be found at www.eprairie.com.
The opinions expressed herein or statements made in the above column are solely those of the author, & do not necessarily reflect the views of The Wisconsin Technology Network, LLC. (WTN). WTN, LLC accepts no legal liability or responsibility for any claims made or opinions expressed herein.