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Biotech / Medical : IGEN International -- Ignore unavailable to you. Want to Upgrade?

To: James Perry who wrote (373)	6/14/1998 8:21:00 PM
From: John Zwiener	Read Replies (1) \| Respond to of 1025

Hi James, and Quilty, (resummary of Igen and of my opinions), As you know, the lawsuit with Roche/BMG has pointed out the value of the deal with Igen. James, You point out an interesting dispute in considering the value of POC. You and your brother are both right. Your brother points out potential resistance by physicians to another POC instrument. Immunoassay tests are considered to be a fairly complex test with a good bit of experience and training ensure and accurate result. These tests are required to be run by trained and certified personel, and I doubt that the volume in a solo doctors' office would be enough for expense. Also, the record keeping is a major Problem. There is your resistance. On the other hand, there is a strong trend towards group practices, and this POC effort should qualify as an intermediate complexity, maybe with a physician office exemption for employees that complete an 8 hour training course and some kind of degree. So what would be the reason for POC in docs office? Rule out MI. Myoglobin, goes up within an hour or 2 after an MI, it is not specific, but it is extremely sensitive. An MI panel could be run in the docs office, if suspicious, then hospitalize, if conclusive, then they could be started on aspirin and get TPR on arrival to the ER. This could lead to a dramatic decrease in time to begin treatment. (There are early POC instruments already out with cardiac panels, and they do seem to be meeting resistance, part of the problem seems to be limited range and increased chance of hook effect giving false negative result). Also probably will be on ambulances so results will be available by the time it reaches the hospital. Also legitamate uses for ER, ICU, and the floor. The key for POC will extremely fast speed and ease of use and adequate record keeping. I think the time is to be 7 minutes, and that is very fast and would not interrupt workflow, and since the dynamic range is much more than other tests, results are not delayed by needing dilution (and they would tend to be delayed in the very patients that speed is essential).. Igen will have a decided advantage in POC market. As you know, I think the single biggest area for Igen is the pharmacuetical research area. From the little bit that others have said about what is in these reports, it looks like very little or no value has been given to this area. And yet it looks like Igen will have a large niche in this area because the newest drug research is much more targetted. Where only a couple dozen targets were identified 5 years ago, there are thousands now. And these targets are extremely expensive so to research them, you need extremely sensitive and specific tests so that accurate results can be made on very few target molecules. Since millions of compounds are being generated, the more of these that can be tested, the better chance of finding the best candidate for further development is. Also, research labs have been saying that the Igen equipment is the best they have used, with far less background noise that ruins tests where very subtle effects are being tested for. Word of this is apparently getting around since top companies paid to get alpha and beta units in their labs, probably to get a head start on other companies. Recently, I have noticed that attention is being focused on targeting specific receptors and modulators and stats on and within the cell. This will be the area where Igen will have a large niche and advntage IMO. High through put with attention to screening for specifically acting compounds is the fastest growing area in drug research as I understand it. Igen has the right technology in the right place at the right time. Since deals that include a royalty on any drug developed from high through put, this is another potential revenue source further out. Newer deals may include this provision, and probably will. Another advantage for Igen is that they can developed a new test in a few days instead of a few months because the background noise is so low and it is easy to attach the bound (detected) target to the signal generator. And there is virtually no interference with the reaction. Also, the instrument has advantages for the difficult testing necessary for production of the newer pharmacuetical products. Altogether, this research and production area for Igen is much more promising than the Roche deal and POC deals put together. While royalties from Roche may get to 80 to 150 million per year. The research and testing area with pharmacuetical companies could get into the hundreds of millions. One last thing, some may ask is this technology really that great? I have yet to meet someone that does not mention how great it is. People with BMG, who are upset with their own company, talk about how BMG missing out on developing all kinds of unique tests that can only be run efficiently and rapidly on this technology. And it is said that Roche is increasing spending on developing new tests for electsys. Roche's increasing commitment to electsys gives a base to Igen's price since the average of buyout prices are over 30 dollars, and as time goes on and more instruments and tests come out, the buyout price for their contract with Igen goes up. And yet, the research area is not even considered in pricing Igen, and it is the biggest credible opportunity for them. Regards.

To: James Perry who wrote (373)	6/14/1998 11:06:00 PM
From: Quilty	Read Replies (1) \| Respond to of 1025

James, Thanks for the generous recap and discussion of IGEN's opportunities and issues. I tend to agree with you. I'm selling the December 45 puts to augment my relatively small long position. The Dec 30's are also very attractive, maybe more so, since you create the stock for under $25. Of course, if the lawsuits drag on, the market tanks or Abbott gets religion, this could become a really painful game, but no more painful than being naturally long the stock. I'm betting it works in our favor. Meanwhile, I'm very much looking forward to seeing IGEN's presentation next Tuesday. I'll definitely let you know. In your opinion, which brokerage has the best research on IGEN? Q.