Tuesday, December 27, 2005

Doctors with Penchants for Deals: FOXH/IVX

We want you to keep an eye on FoxHollow Technologies (FOXT).

There was a lot of underground talk this weekend concerning a possible buyout.

We don't track this medical device company too closely, but suffice it to say that the story's attractive.

FOXH 's major toy is called the Silverhawk, and it removes plaque from clogged artieres -- it's a specific type of plaque that blocks blood flow in the legs.

The stock recently got pounced on after the CEO abruptly left, but it's possible that FOXH was victim of a panic selloff.

Apparently, the CEO left the company because he deemed the company's $230M revenue target for 2006 too aggressive and found himself at odds with Fox Hollow's founder, Dr. John Simpson.

Which leads us to why Fox Hollow could get acquired sometime soon.

Simpson sold three medical device companies before Foxhollow was born -- someone with that sort of savvy knows when to 'get out' at the right time. In fact, this whole story reminds us of Ivax Pharmaceuticals (IVX), a generic drug company whose founder was also a serial entrepreneur with a hands-on style. Ivax founder Phil Frost put himself on the Forbes 400 list by selling his first company, Key Pharmaceuticals, to Schering Plough (SGP) for $800M. In 2005, Frost sold Ivax to Teva Pharmaceuticals (TEVA) and pocketed another billion. Two for two -- not bad.

There's no rocket science here: find a doctor-turned-deal maker and you've probably got something worth following.

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