Yeah, great news! I've been hoping and encouraging them to do this for years and just work out a deal between themselves. What a complete utter and futile waste it was to litigate for all these years over this stuff rather than cross license. I think the egos got ahead of the business needs, and the attorneys just loved the taste of battle and would rather have fought on principal than make a deal that helped out the economics of both companies. Affymatrix might have been willing now that INCY is out of the chip mfg business other than supplying the other competitors of AFFX (Agilent & IBM) with DNA to use. Plus, I think that AFFX might have finally been fearful of actually losing on some core IP that might have blocked them (regardless how they spun every decision as a win even if it was an obvious loss). At INCY you have the new management team who comes in, has to be thinking "how the hell do we get to a profit", looks around and sees a multimillion dollar bleed on this patent suit with a bunch of other IP disputes also coming up and decides to finally get reasonable. When I talked to AFFX CFO Ed Hurwitz way back in early 1999 about this dispute, I was chiding him about how they both needed to settle and what was the problem? He said that INCY was just being completely unreasonable. I used to give Roy Whitfield the same sort of suggestions that they needed to kiss and make up with AFFX to no avail. My guess is Randy Scott was just being stubborn and Roy was letting Randy the visionary call the shots in that area while the BOD went along for the ride. The problem with visionaries is that someone, somehow, needs to keep them grounded in business reality - uhhhh can you EVER make money at doing this. I think the Internet rah rah probably also infected them - I know we lose money on every sale, but we'll make it up in volume - a business model that is clearly no longer in vogue. Randy now has bigger things on his mind with his new company Genomic Health, and Roy seems to be backing off on operational control becoming Chairman. Notice how they neglected to say in the PR if Randy remains on the BOD after Roy took over his job as Chairman? He doesn't. With this new management team, including a lot of BOD changes, I think the company might actually be trying to look ahead on strategy farther than they historically have (the running joke was that INCY planned ahead two weeks). They had too much of a tendency to chase what is hot and try to be an everything to everyone "platform" services company. Then they would focus on the next thing and let the ball drop elsewhere, and then the next, and the next, ad infinitum. Classic case of a visionary seeing Mecca, the goal, but not having any clue about the mountains, rivers and deserts that needed to be crossed to get there. Now, every company needs visionaries, at times, but you to run a business the key thing is to execute and actually get to the goal occasionally, and not be chasing the next vision constantly. In the meantime, these services got commoditized and they couldn't compete on price and just kept bleeding and getting farther away from profitability. My view is that if you want to keep chasing visions, keep spinning them off and make the new vision companies stand on there own and raise independent capital to validate it with investors and to keep if off the parent's books.
Great moves happening at INCY!!! It's just too bad that I have to say - IT IS ABOUT TIME!!!
Hey, interesting to see PR on a deal that actually talks about what they are paying. That also is a change. Could this new management have some sort of clue about PR? IMHO INCY never has in the past. Hmmm, must be that East Coast management. Might be able to finally compete with HGSI, Celera and the rest in the press finally???
Oh yeah, I previously said that I didn't see anything for sure that INCY was going to get into the Drug Devo business (which I don't want to see the parent doing), but after that I did see Roy quoted in Chemical and Engineering News that they were getting into it. Still I hope they can spin it off and keep the red ink bleed off the books.
Have a great holiday!!!
Rocketman's going to have a BLAST!!! |
