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Biotech / Medical : Martek Biosciences---- future biotech cash cow!
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To: nelli who wrote (109)9/29/1997 9:15:00 PM
From: bill small   of 258
 
WU, to address some things you brought up;

Martek has been ramping up a sizable production plant in Kentucky to mass produce their oils in anticipation of large orders from formula companies. The current production plant is way oversized for the amount of oils needed based on today's demand but must be ready to produce what's needed as more formuls launches are made. If Martek didn't have the production capacity in place, the formula companies wouldn't launch. So Martek must bear this "ineffient production" problem as a cost of being ready for more business. They have no plan to compete with anyone by selling formula themselves.

They will make profit from royalties and from selling the oils themselves to the formula companies. I think they will make about 3% on royalties and another 3% at least on oils sales.

The Martek IR guy says (as of last week) the FDA panel isn't expected to publish their formula recommendations until Dec/Jan. , months behind their schedule. Martek CEO said at last annual meeting he expected the panels would report out neutral on using DHA in formula, ie would neither recommend nor advise against. The formula companies would then just make their own minds up about whether/when to launch with Martek product.

Hope this addresses your questions.

best......Bill
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