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

To: Invest2Ride who wrote (436)	9/16/1998 5:53:00 PM
From: James Perry	Read Replies (5) \| Respond to of 1025

Do my best. But understand this: right now Igen is fluctuating with the market. When a settlement is made, beyond question the value of their stock will jump. Right then. If you wait until a settlement is reached, the stock likely will cost you considerably more money. I have already said that if I liked it as an investor, I would not wait. Igen gave a license to Boehringer Mannheim to distribute devices to hospitals and clinical laboratories which employ their electsys process. Igen was entitled to receive 9% royalties on all sales and on supplies to run the devices. Boehringer (BMG) built and sold one they called a 1010 and another, the 2010, I think it was. You will have to read back on this thread (and also on Yahoo) to posts by John Zweiner (here) and by the Intelligent Rat (Yahoo - both of those are John). He is very knowledgeable about the figures, machine and supply costs, profits, etc. Well, Igen is not making a profit because BMG is not paying all of the royalties that are due. BMG hoped to sell on the order of 1500 machines during the lst 6 months, but actually sold about 4500. When it because obvious that the process was a huge hit, BMG said they wanted to "buy out" the license, and obviously withheld royalties to squeeze Igen into dealing. They also sold some machines outside their licensed area. Igen resisted the squeeze, and had gotten the court to issue an injunction against sales outside the license area by BMG. That pretty well is totally convincing that Igen will win the suit. Analysts first estimated the value of that "buy out" at $30 per share, because it not only made up for past unpaid royalties, but it forever satisfied the duty to pay future royalties, so that is no small thing. At this time, the analyst at Montgomery is estimating it at $40 per share in value. Igen could consider selling that, which essentially is a part of her future, because it would give her about 600 millions in cash, and still would leave her free to sell a Point of Care device, and also the big machines - high throughput devices - that she is selling to drug companies. Looks like she would be keeping considerably more than she sold, on such a deal. So far, Igen has contracted for sale of 5 of those high throughput devices. John tells us that each of the BMG devices will use about $60,000 per year in supplies, and at this point BMG has sold well over 6,000 of those devices. We are not talking about peanuts. BMG did this on her own, and suit was filed against her in Federal court in Maryland. Roche has since bought up BMG. Lehman Bros is representing Igen in trying to reach a settlement, and there was a recent conference in Switzerland about the things that settlement would involve. I don't know the outcome. But I do know that Roche and Abbott are fighting for the testing market. Obviously, Roche would want to sell the little point of care device - it is not much larger than a pager, and will make a single test of a single substance, on the spot, in about 15 minutes. Hot item, and it has not yet been licensed to anyone. Nothing says that Igen must license it to Roche, which puts pressure on Roche to deal even though Igen might prefer to deal with only one partner instead of several. Roche is certainly going after sales in a satisfactory way, so their partnership would seem pretty suitable. Once they get this suit out of the way. And a settlement based just on paying the past royalties and setting up to pay all future royalties would also be good. It would not load Igen with a vast amount of cash, but it sure would set her up for the future. I am not sure how many kinds of tests the devices will make at this point. When they first came to market, only 10 or 11 had been approved. Now they must have up to 40 or 50, and right now Igen is field testing a test for e-coli, the germ that kills when it gets on food products. Very important, it will open testing of water, food producers, etd. Also they are working on cytosporidium, which you would want to catch in all water testing. In short, the future looks good.