To: LPasko who wrote (451 ) 10/4/1998 1:54:00 AM From: James Perry Read Replies (2) | Respond to
I am not one who does the pro forma income statements to quantify all of the supply useage, etc. But my gut feeling is that even if Igen consisted only of the business connected with high throughput devices, she still would constitute a great investment. It has been mentioned in the past that the market hasn't assigned a value approaching reality for that segment of the market. I think when that statement was made, it looked only at all the drug companies that will have to have one or more of these devices. That is a lot of business. But you see talk about e coli tests and some others being worked on, with mention being made of food and water testing. I believe I correctly foresee a time when every processor of goods for human consumption will have an Igen device in the production line, running continuous samples for purity. I don't know how far down the road that is, but that is pretty big. You know, Teddy Roosevelt led a huge campaign to clean up meat processing houses. Since his time, the FDA has had rigorous standards for cleanliness that food processors are required by law to meet. I grew up knowing that there was a Federal Inspector standing on every food line, seeing each piece of meat, and checking that it was not in some manner obviously contaminated. It is not generally realized that budget constraints over the past two or three administrations has severely limited the number of inspectors who stand at the production line and enforce those standards. The meat is flying by, and they can't see it all. The risk level has gone up, and people (mostly in government and concerned with these things) are nervous because they don't want a bunch of people with food poisoning with the blame falling on them. And just as soon as the right tests are developed, it will be so easy (and the government can even save more dollars by further reducing the human inspectors) to remove those risks and provide greater safety than ever by simply requiring the kind of testing that Igen equipment can perform. Bet on it happening. Not a bad business, at all...but that doesn't mean that I really believe that Igen will give up both the POC and the business covered by the present license. I seem to be alone in the expectation that I feel is more likely: Igen will demand and receive a scheme to monitor what is due her in the future; she will receive damages for past unpaid royalties; and certainly she also will be compensated for anything she gives away as to future royalties. That might, for example, include an agreement to reduce the royalties for an up front sum of cash, or something of a similar nature. But I am unconvinced that she will sell the right to all those future royalties. BMG wanted them at the outset, but it is easy to want what you think you can take away from someone for a bargain price. When the price is not a bargain however, it is easier to adjust one's desires than to part with great wads of cash! Igen won't be giving away bargains. Considering those desires, as BMG has demonstrated them to Igen, Roche will be most fortunate to end up with the right to sell the POC on any basis! If the thinking of Roche is really aimed at acquiring ownership of their present license, why not try to buy out the whole company? I don't think they can buy the company; I don't know about bits and pieces of it. Maybe. I visualize different possibilities, and mostly I am not wedded to any single plan for resolving the dispute. As it is always said, a good settlement is one that neither party is happy with. Igen certainly is in the better bargaining position: they have a suit that is moving toward trial; they have a successful test system; they are developing more important tests; and they have the POC that can be licensed to a competitor of Roche!
