You know I didn't run to buy that stock, but I did mean to say that I value your opinion and most particularly so when it comes to valuing technology that I have difficulty understanding. Basically, I am inclined to subscribe to the stricture against buying black boxes which can't be understood.
I have certainly entertained those same thoughts that you expressed about Igen. And I try to put myself in Sam's position and it is like walking a knife edge. Certainly he does not want to hurt Igen's overall performance. He must grab market share while it is there, in every way possible. The reagent sales constitute the future profit franchise for the company, and product delivery is what sews up those sales. If one could only have one revenue stream, reagent sales would be preferable to device sale profits, for they run like the Everready rabbit. On and on and on. That may mean in one sense that he is limited in the things that he reasonably can do. Mass testing devices are obviously an area where he wants to ramp up development, sales and delivery. And we can see that he is going full speed there. I believe that BMG is selling all that they can, even if they don't pay royalties. But I would bet that Sam would like the dispute with BMG resolved before the POC gets into production, or even before a partner is nailed down. The annual report shows a prototype; it has been developed. Yet it hasn't been licensed, and that is hardly to the apparent benefit of the company. Perhaps there is other very valid reason. I think that he may be reluctant, because I think it will bring to the front some thorny points of further conflict that at present exist only potentially. I haven't seen the license agreement. But I can only imagine that it grants a permit to sell electsys devices to hospitals and laboratories, worldwide except for Japan, and the art in drawing it undoubtedly would have run to sincere efforts to sell and deliver and service, and to spend necessary monies, etc. That would have been the worry in their minds at that time, and what they would have wanted really nailed down, with the emphasis being on all that BMG must do to market that sucker. I don't know if there was some laxity in describing what all would be entitled to royalty payment: on one hand it seems outrageous and unlikely that a clear contract requirement would be ignored (clear = one that no arguement could be found to support), but on the other hand Igen was a weak little company apparently subject to being beaten down. Somewhere I read that Igen tried to help BMG by making suggestions as to how to design and develop the 1010 and 1020, and therefore I would be very surprised if BMG were limited to those devices. You are far more familiar than I, but I can imagine that lots of uses can be developed for POC devices for use in hospitals. Like at each intensive care bedside, incorporated into other monitoring systems. Maybe in laboratories also. Those are areas for conflict. Isn't that a hospital sale? And of course food and water quality offers a great new field for use. In the processing plants where continuing quality tests will be made, I have doubts that the license agreement so narrowly defined laboratories that another rich area for conflict would be precluded. And I suspect that is a hugh area. Is a device continuously testing product a laboratory? Just what is a laboratory? Has the right to sell to that market already been licensed to BMG, or is that Igen's market? I can't give answers. I haven't seen the agreement. My fear is that I might not be able to give a reasonably certain answer if I saw the agreement. Now the docket reflects that the suit was filed about 9 or 10 months ago. Sam said they were dragging their feet on discovery, and that is what usually happens. And when discovery is completed and you wait for a trial date to be assigned (the timing of which definitely is related to the press of other court business, and all of the courts are overloaded) there will pop up at least 40 reasons the defendant absolutely must have another delay which cannot be equitably denied. Mostly horse hockey, but there must be some laxity, for it is possible that an excuse could be legitimate! So I look for no trial (or settlement, because delay is a bargaining chip and you have to believe that BMG would not want a settlement made into an event which clears other potential areas of contention) for a year. In order to go gung ho on all fronts, and grab that market share, is it worth giving away these potential areas of conflict as well as some of the value of future royalties? Or some of them? No, Sam is not about to give any bargains. Not willingly. I don't think. Will the technology (and the demand of the market for service) allow that year's delay, without penalty to the future? Sam is a business man, and he will do what is best for the company, but the company is certainly getting to be a big company and what is best for it is a question that could rob him of some sleep. One question: I thought Igen had control of reagent manufacture. How is BMG getting it to deliver while denying that it has been sold? Uhhh, yeah. I picked up another bunch the other day, and though the stock was sooo cheap it was a lot of money for an old country boy to have to pay! But I couldn't imagine getting it cheaper even in these days of stress enclosed within walls of worry. |
