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Whether a buyout by Roche would be bad, long term, is pretty hard to figure. The are on the hook for a relatively high royalty, which would have to negatively impact Roche's eagerness to spend big bucks to push product. And as Sam says, it requires big bucks. That is on the other side of the fact that cancelling the royalty for up front bucks could have long term impact on Igen's income. As Sam points out, like the razor blades, the real profit is in the support supply chain. Right now he thinks they may owe royalty for 4000 machines, tho they admit to sale of only 3000. Despite the fact that on an operating level they are managing to maintain a relationship, that kind of feeling has to chew it apart. I wonder how sales would be if this sort of feeling had not poisoned the well? And of course, question #2 is that if BMG won't be honest with the license they have, how can they expected to stay within the parameters of any other license we negotiate? I know. All these things are imponderables. Maybe you can tell me just why BMG is still in the picture - I thought that Roche had gobbled them up? Apparently not hair, hide, whiskers and all. Anyhow, I have a bottom line hunch that IF we are ready with a partner who will get out and punch hell out of POC distribution, it will take away a lot of the importance of that license to Roche. And IF we really are about to break through on some research that will put us into one time test kit market, which Sam indicated to be the direction that research is going (as I understood him), then it seems ever more important to Igen long term to just get the product off the shelves and into the hands of users, and that importance may be even greater than machine royalties. Not suggesting that royalties should be forgotten. But I am sure they are not worth killing the business over, and I think Sam will have to weigh the degree of harm being done by the dispute. It can't be easy. |
