Comparison are difficult. It is a very competitive industry and some of the other players are substantially larger in size. I closed out my position last week after the adjournment of the shareholder meeting. From the proxy materials:
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Competition.
IVAX Diagnostics competes on a worldwide basis and there are numerous competitors in the specific market sectors in which IVAX Diagnostics offers its products. These competitors range from major pharmaceutical
companies to development stage diagnostic companies. Many of these companies, such as Abbott and Pharmacia & Upjohn, are much larger and have significantly greater financial, technical, manufacturing, sales, and marketing resources than IVAX Diagnostics. The diagnostics industry has experienced considerable consolidation through mergers and acquisitions in the past several years. At the same time, the competition in test sectors such as autoimmune is very fragmented as it is comprised of primarily small players with no single player possessing a dominant market position. IVAX Diagnostics competes in the marketplace on the basis of the quality of its products, price, instrument design and efficiency, as well as its relationships with customers. In addition to Abbott and Pharmacia & Upjohn, IVAX Diagnostics' competitors include DiaSorin, Hemagen, Sigma Diagnostics, Meridian Diagnostics, Wampole Laboratories (Carter-Wallace), Hycor Biomedical, and Trinity Biotech.
There is also the issue of economic dependence on one customer that has periodically suspended purchases:
IVAX Diagnostics is largely dependent on one significant customer.
In April 1999, IVAX Diagnostics and Sigma Diagnostics, Inc. entered into a three year contract pursuant to which Sigma agreed to purchase a minimum number of scientific instruments per year from IVAX Diagnostics. During calendar year 1999 and for the nine month period ending September 30, 2000, net revenues received by IVAX Diagnostics from such sales and sales of replacement parts represented 28.1% and 46.2%, respectively, of IVAX Diagnostics' total net revenues for such periods. Twice during the year 2000, Sigma notified IVAX Diagnostics that Sigma desired to suspend shipments of instruments pending resolution of hardware and software upgrade issues. The first suspension lasted for a period of approximately four months. The second suspension began in October 2000 and ended in January 2001. There can be no assurance that Sigma will make purchases at the anticipated levels or will do so within anticipated time frames. The failure by Sigma to do so would have a material adverse effect on our business, prospects, operating results, and financial condition after the merger. |
