I thought this was interesting, excerpted from the 2/06 YE CC:
However, even with this steady progress, it became very evident as we proceeded through 2005 that the basic business in drug discovery contract research and services was undergoing a major and quite unfavorable market shift. Worldwide improvements in communications and shipping, coupled with entrepreneurial efforts in rapidly developing countries such as India, China, and in Eastern Europe, enabled the highly-skilled scientists in those areas to build companies providing a similar range of products and services to us and our peer group, but at significantly lower prices. New guarantees of protection of intellectual property in these countries offered the necessary assurances to the pharma industry that the decision to outsource basic drug discovery offshore had, in the space of a year, become simply a matter of price. This has essentially resulted in the loss of our ability to consummate synthetic chemistry library contracts, the former bedrock of our profitability.
And there is this, a little later. Big Q is whether you would trust these guys to pull off an exciting reverse merger with a drug developer, or will they (conflict of interest!) try to keep control or (zombie model) stay in the services business. I see they get paid pretty well, or did in 2005.
We enter 2006 cognizant of these facts under reorganized management and with an imperative from our Board to make best use of DPI’s current financial and scientific assets to accelerate the Company’s entry into more substantial value-creating activities. At this point, we are currently exploring a range of options, including merger or acquisition opportunities that are specifically identified to create or enhance a product portfolio with defined risk and timelines to milestones. Through such a combination, or other options that we may pursue, we intend to provide our shareholders a clear and focused pathway to increased value.
There were no questions in QnA. |
