Elderly and infirmed to be used as  testing grounds for microchip 
implantation  

Beverly's Contract With Digital Angel Corp. for GPS Patient Care 
Systems May Lead to Broad Industry Adoption, Says Portfolio Manager 

Beverly Enterprises became the first major U.S. healthcare company 
to enter the field of GPS location and monitoring systems for patient 
care purposes when it announced, on December 19th, that it had signed 
a strategic alliance and distribution agreement with Digital Angel 
Corporation.  

In an interview to be posted at Technology News Bureau, David H. 
Talbot, a New York City-based portfolio manager who owns shares 
of both companies, said he regards the advent of GPS systems as 
a potential boon to the eldercare companies not only in terms 
of incremental revenue, but also profit margin enhancement and 
penetration of the Alzheimer's market.  

Mr. Talbot said he expects other large international and U.S. 
chains such as Manor Care to eventually sign on with Digital Angel 
rather than cede to Beverly such a competitive advantage. According 
to Mr. Talbot, Digital Angel is the only GPS systems company to offer 
patented sensor technology, high-volume processing capability, and 24/7 
real-time physician assistance and response. Beverly's selection of 
Digital Angel Corp., in his view, was based on extensive due diligence 
of both the soundness of the company and its technology.  

Mr. Talbot estimates that there are 14 million Alzheimer's and other 
patients in the world who would benefit from the tracking features of 
this technology (i.e. those who are at risk of wandering) --- 5m in 
the U.S. and another 9m in other developed countries. He added, however, 
that Digital Angel features like access to physician response make GPS 
systems applicable to a much broader eldercare market -- such nursing 
home patients, retirement home residents, and those elderly who are 
living alone.  

Mr. Talbot estimates that Digital Angel Corp will sell its new GPS 
system to Beverly (and eventually to other eldercare companies) for 
$300-350 per unit plus a significant portion of a monthly service fee 
of $35-40 ($420-480 per annum).  

By 2005, Mr. Talbot estimates that nursing home companies will be 
selling at least 500,000 per year. This would translate to at least 
$125- 150 million in relatively high margin revenues for Beverly and 
any other Digital Angel marketing partners. For Digital Angel, Mr. 
Talbot estimates that 500,000 units would mean $250 million in revenues 
and gross profit margins in the 70 percent range. This projection 
excludes other potential markets for Digital Angel Corp. such as 
medical devices or U.S. homeland security, he said.  

Mr. Talbot is a managing director and senior healthcare analyst 
for Melhado, Flynn and Associates, Inc., New York, which manages 
more than $1 billion in assets and is a NASD member firm. He is 
also manages the firm's HealthReform Technology L.P.  

Source: Technology News Bureau

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Cheers, Steve..

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