Ann: Update on Legal Proceedings, page-8

From Clause 320. "The value of Corum's lost opportunity" and claim for In particular the claim for overpayment and wrongful distribution, the Fred counterfactual claim discusses how Fred would probably (to me hypothetical) have from 2013 developed a gateway product in opposition to to PharmX and reduced PharmX's share of the market. Fred's claims to have been to get this product on the market quickly and capture significant market share with incentive were grossly overstated.

Of course when all this control issue really blew up a few years back Fred (obviously bitter about the loss of earlier legal decisions) got serious with plans to develop a new competitive gateway product (named MedViewX). They have already gone hard trying to get support from suppliers and large pharmacy groups proposing cheaper fees. However, development has now been underway for several years and it has been tougher than anticipated and only at phase 1 at best with one trial site.

What I take from this is that subject to appeal Corum will be in a very strong financial position but in a couple of years we will have competition from Fred's MedViewX gateway product reducing incoming cash flow from the present position. It would be natural to suspect that Fred's part ownership by the Pharmacy Guild and strong position with respect to their share of the pharmacy software market will get good support from pharmacists. On the plus side PharmX is a good product and will have "stickiness" so it should retain good market share and continue to be a leader for some time.

Given this competition is going to come hard at PharmX, with a healthy cash bucket on hand it will be critical for Corum to look for new business angles through diversification outside pharmacy. M & A must be still on the table and I have always thought Medadvisor could at some stage show some interest in acquiring Corum to give them a full modern package of a pharmacy software platform instead of just their single but brilliant Medadvisor application that is now showing significant expansion in the USA.