VISICU (Nasdaq: EICU) reported strong quarterly results on Thursday, leading to share-price gains of more than 15% as of this writing, but an ongoing patent dispute still clouds the company's future.
In its most recent quarter, the company generated $8.7 million in revenues (up 31% year over year) and GAAP operating income of $1.4 million (up 212% year over year). With about $3.70 per share in cash on the balance sheet, zero debt, and shares trading hands well below their debut close of $24.78 per share last April, investors should consider taking a position in VISICU on any pullback opportunities.
VISICU's proprietary eICU system revolutionizes the practice of critical care medicine by linking ICUs using telemedicine. "An eICU center is staffed with an intensivist-led care team that can monitor and care for hundreds of patients, much like air traffic controllers monitor hundreds of planes," according to the company's website.
Remote monitoring technology lets multi-hospital systems improve coverage and allows intervention to prevent or manage crises. This system is consistent with major themes in health care today: cost containment and technological innovation.
Looking ahead, VISICU shareholders await the results of a second re-examination recently filed in the U.S. Patent and Trademark Office (USPTO) by iMDsoft, a software company that develops clinical information systems. This pending case covers all of the claims of VISICU's contested patent, which received a successful initial re-examination by the USPTO last year.
VISICU's CEO Frank Sample expressed optimism in an early March press release when he stated:
... We want the public to know that we have done everything that is required to respond to the second reexamination including: (1) analyzing thoroughly the references that have been cited; (2) meeting with the re-examination panel at the USPTO; and (3) aggressively preparing a response to the USPTO (including an amendment to clarify the claims), which has already been filed ... (T)hese additional references that have been considered by the examiners only make the claims of the VISICU patent stronger. We are confident in the reexamination process and its ultimate outcome.
After reviewing these documents and the CEO's comments, I am inclined to agree that VISICU will receive a positive decision in this case, which should provide additional upside to the shares. This patent case is also important to VISICU because of pending lawsuits between itself and Cerner (Nasdaq: CERN), which are in a state of limbo until the USPTO re-examination process is completed.
Fool contributor Mike Havrilla, R.Ph., B.S., Pharm.D., is a Rite Aid pharmacist who lives and works in the small Pennsylvania town of Portage. He invites your comments and feedback at mikerx77@yahoo.com. Mike doesn't have a position in any company mentioned here. The Fool has a disclosure policy.
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