Ron,
I've been struggling for the last three weeks whether or not to share my speculations with everyone on this site. Your invitation to speculate is perhaps the final straw. All of the following is nothing but speculation and if anyone wants to remind me of what a fool I was for this line of reasoning, you have my permission to do so.
A few weeks ago, Amgen placed a full page ad in the Rocky Mountain News looking for every type of pharmaceutical production technician one could think of. As Amgen has been proposed as the leading candidate for partner with SMTG, I could not help but think, they are getting ready to prepare for producing OPTRO. The ad indicated they were building new production and research facilities on a site of over 100 acres. They have purchased an additional 72 acres for even more expansion.
Consider for a moment where Amgen is right now. Their main products EPOGEN and NEUPOGEN are mature, that is, not growing fast. The other products in their pipeline are several years away from approval and therefore do not need anything in the way of additional production facilities. Certainly any increases these products might impose on Amgen's productive capacity could be easily met with means far less aggressive than what we see taking place here in Colorado.
When I called Amgen and asked what they were going to do with 200,000 additional square feet of production capacity, in an entirely new geographic location, the person I talked to said Amgen was moving the production of EPOGEN and NEUPOGEN from Thousand Oaks. Why? They were concerned about the concentration of their production in one site that also happens to sit on top of a major earthquake fault. Also, they want to be ready for the new products when they finally receive FDA approval.
Really. Millions of dollars to move production to another state for earthquake insurance? At this time in their history? When the products in question are mature and may even face competitive pressures and payment problems from the government? Aren't there other risks of a more immediate nature needing those millions of dollars?
Here's the good part and where I'm going to say some things I will in all probability regret saying:
Somatogen has just suffered a painful corporate divorce. However the company may wish otherwise, a new partner is not only desirable, a new relationship is mandatory. The company will not survive without one. Someone with deep pockets, true. But just as important, someone who is committed, not like the last one.
So, the potential corporate courtships begin. Each one in the courtship makes the promises and 'I will do this and that etc. etc.'
To test the commitment, the girl asks for the ring. Somatogen asks to see how much this future relationship is really worth to the suitor. The courting partner says, I'll build a manufacturing plant for you, right by your house (Longmont, just down the road from Boulder). I'll staff it with the best talent money can buy. When OPTRO is ready, we'll be ready too. And in this way, you know when I say your product is near and dear to my heart, in marketing, in sales, in testing, in all things, you will never doubt my sincerity.
Conclusion: Amgen is either demonstrating it's commitment to Somatogen as part of the agreement, or, the agreement is done except for board level type of meetings. The deal is either done or very close to being done. Amgen's the one.
There. I said it. There is no way I can back out of this later. But I already feel better for saying it. I still wish there was a foolish expression checker in the software. We could call it foolcheck. I'm sure this whole missive would be in highlighted in flashing red.
Just be nice to me when the taunting begins.
By the way, I picked the Broncos. But that was laden with emotion as well.
Regards,
Jack Simmons
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