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Here's the rest of the conference call points, taken from my notes. In some spots I've tried to emphasize where I've taken a bit of fill-in liberty to try to get what seemed to me the full idea they were trying to express -- mainly the part about their marketing strategy....
Conference call items not mentioned in previous post:
1. Still on-course to produce double the '96 sales in stable isotopes.
2. The new oils refining & proc'ing factory is "6 mos. behind".
3. The 3'rd partner co. I couldn't remember was Sandoz.
4. They pointed out that in their Fall '96 conference call that a 2 mo. difference in expected "happenings" (my wording) could cause a big swing in financials, and they still hold to that position.
5. Points re. their formula strategy (VERY much in my words, paraphrasing, etc. It wasn't totally spelt out this way ;^)
A. Adding DHA will increase the total cost-to-customer for 6 mos. of feeding by about $50-$60 per child. Now, while that doesn't sound like much if you consider it as a big health benefit (which of course, they intend for parents to understand!), the formula co's have taken a lot of heat in the past for price gouging, etc., so they understandably are very loath to put out a new product with a "big" price mark-up.
B. So what Martek's gotta do first is promote the benefits of DHA, and create a desire & demand for the product from the ground, up. then the formula makers will be happy to jump on the band wagon.
C. The idea of starting out shooting for the pre-term market is three-fold. First, they want to position themselves very much as the #1-quality formula (i.e. "we are the best formula food for your fragile pre-termer!") Second, Hey! preemies are the ones who need the extra DHA the most, so it makes sense to start there. And third, people usually continue with what they start out with, provided they get good results from it.
D. I should add here that they are also shooting for "6 mo. Starter Formula" market for most of the same reasons as in "C", including the fact that < 6 mo. babies don't have the enzymes to convert fatty acids, hence more need for Martek additives.
E. After folks realise we have a better product, the market will migrate to us.
6. Points re. fish-oil DHA source:
A. It smells & tastes bad to most people.
B. It also contains ETA, which is sort of like DHA molecularly, but it interferes with DHA, & slows down development in children. It also has a blood-thinning effect when present with DHA, so not good for children or the elderly.
C. Greenpeace has pointed out how different fish in different geog. locations produce different oils. a lot of European fish have high levels of pesticides in their oils.
D. ETA suppresses the immune system.
E. Bad news: There is something called Eracadonic (sp?) Acid that will knock out ETA effects. Good news: Guess who has the patents concerning the blending of Erac. Acid with fish oil? [snicker, snicker!!]
7. Professional Investors who were asking questions [Note: this is what the names & co's sounded like to me, hearing them only one time via poor-quality phone conference audio... apologies for any bad guesses]
A. Pat McBain w/ Gruber & ??
B. ?? w/ Hambricht & Quist
C. Arthur Baumbach w/ Putman Investors (Investment?)
D. Ned Hamlet w/ Beekman Capital Mgt.
E. Jim Lion w/ Lion/Stubbs
F. Alex Eisen (private investor, or pro.?)
G. Joseph Eddleman (w/ Paramount?)
H. John Burskey (private investor, or pro.?)
8. The two countries I guessed at Thurs. where we have exposure was not France & Germany -- it was Australia & the Netherlands; and it is "Finland", not "Norway".
9. Martek is talking to other potential licencee candidates.
10. Someone asked to list things that would a) Accelerate deployment, and b) Delay deployment:
A. A (foreign) term launch this summer; More pre-term launches; More data in very important periodicals, etc.; Maybe more term launches in late Fall & early '98
B. Turn-down by FDA panels (though they highly doubt that); I don't understand my own short-hand -- it says "Exp finding Spring -- delay to Fall" (whatever that means)
11. They noted that they are currently unaware of any Q's the FDA might possibly bring up that they didn't have a satisfactory answer for (i.e. they see no logical bumps in the process - my wording). Also, as consciousness of DHA & its benefits arise in the mind of the Public, the FDA will have to face & address that fact.
12. Naturally, they couldn't guess as to when there'll be a US roll-out ("This year?" "Can't say; out of our control".)
That's basically it, boys & girls. Have a good weekend... it's gorgeous here in Indy for a change! |
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