James, I think you have the jist of what they said. They conference is basically a conformation of our musings here.
Some new people have been anxious about a deal, but it will happen when it is ready. The underlying appeal of this company appears to be growing. As far of a buyout of the Roche contract, Sam W. seems to be playing it down. We have descussed this buyout as not necessarily being great longterm, though a large dividend would be nice in the short term. Maybe Roche is lowballing any buyout, so that is OK. In a couple of years, the royalties should be considerable.
Nothing negative, but new positive twists discussed. For the first time, they are more forward about the High throughput leading to a drug pipeline opportunity. With the mention of Mosys being 3 times as fast as chiron's centaur(maybe), and talk of Igen's system running 10-20,000 tests/hour (within the year?), I wonder if Aurora may be caught up with before they even introduce their system in 2 years. Origen technology looks to be much better also. So if Igen gets up to Aurora's proposed speed, then Aurora may end up hoping to get a deal with Igen, probably to Igen's advantage.
Igen's lawsuit with Roche seems to be gathering strength as proof and behavior is all on Igen's side, as far as I can tell. A particular positive is the company is worth more, IMO, no matter how it turns out. But it does seem things will be resolved in Igen's favor.
I have the impression that some think the POC was going to be introduced in a matter of months. Though we did not have such illusions, there are rumors on other sites that seems to have taken on a life of their own. Introduction would be in around 2 years. A deal may be close, but at the close of a deal, sometimes the pressure to close it and go home is used to get an advantage. I have little doubt that Igen would walk if a fair deal could not be concluded.
Of note is the comment they had to ?triple their negotiating team to handle a flood of serious inquiries and proposed deals, dozens of talks going on. I like how they hope to conclude 1 or 2 deals within the year.
Now, Roche royalties to Igen. Reported to be 1.5 million, and similar to last quarter, despite over a 1,000 more instruments added and new assays. Despite indications that labs were switching every test they could over to the electsys from their other immunoassay instruments. Despite common knowledge of revenues of what immunoassay instruments generate. In my opinion, they should have been 5 million, minimum, and I'll bet these first instruments were placed in the bigger labs first. Given heavy use, that 5 million is probably very low. I estimate that even using the large buying coops, that a hospital with a drawing area of 100,000, would generate revenues of $200,000 for 3 tests alone(CKMB, troponin, and TSH). Roche seems to be saying they are only doing 15,000 revenue. Now I like understatements, but with your business partner? Roche will probably have to resolve this soon, before this goes to court, or soon after (trial starts late June in Maryland) or end up facing a punitive fine bigger than what GE paid Fonar ($120 million), plus have to really open up their books to all kinds of third parties. Longterm, Roche, could get a reputation because of what BM is alledged to have done.
What's nice is Igen is underpriced without winning the lawsuit, IMO. |
