re: still looks expensive given risk Hi stevecam,
Lets be clear. There are no large buy orders going through. Only uninformed traders are buying (in small parcels). From memory, German investors hold around 16% of the company, so if they are the one's unloading the 500k parcels, you can sure that there is lot more selling to come.
Sensidx, or at least the plastic cartridge format, is a complete comercial failure (because of production and storage problems) and has been permanently shelved. ABI spent roughly $60 million of shareholder funds over the last few years on this plastic cartridge failure. The original business plan was that ABI was going to keep the most lucrative application of the ICS for itself: viz., the hospital critical care market. Other applications (e.g, water and defence) of the ICS were licenced off to BEL. Under the terms of the earlier licensing agreement, ABI was to receive a 2% royalty payment on every sold product manufactured by BEL. By keeping the hospital critical care application for itself, ABI remained an obvious takeover target for large pharma such as J&J or Roche. With the failure of the plastic cartridge, however, ABI has been forced to hand over the most potentially lucrative application of the ICS to BEL, thus handing over its takeover potential. (It is not in Dow and Genencor's interst to sell, so BEL is not a takeover target). ABI have not disclosed the terms of the new agreement, but (1) given ABI's desperate situation, (2) given that Dow and Genencor are not short of funds, and (3) given that Dow and Genencor's scientists were doing fine without ABI's involvement, I suspect that the terms of the new agreement are not favourable to ABI. Dow and Genencor, in other words, now have rights to *ALL* the potential applications of the ICS, and ABI appear to have received virtually nothing in return. But now that Dow and Genencor effectively own the ICS in all its applications, if ABI can't attract more investment in 6 months time, it is not in the interest of Dow and Genecor to step in and save the company. So, while Dow and Genecor are still shareholders of ABI, they are probably not financial backers of the company. If ABI are going to survive beyond 6 months, they will need to raise funds from Aust investors. This wont be easy.
ABI's desperate strategy for survival is to give its last $15mill to BEL (do Dow and Genencor need ABI's scientists??) in the hope that this may speed up the development time of the silicon biosensor. If the silicon test bed looks promising, management are hoping that Aust investors will be won over by the potential for licensing revenue from future BEL products (probably only 2% per sold product, but possibly less). But with a waiting time of around 3 years before any significant licensing revenue materialises, and with ABI's horrible track record, I just cant see Aust investors stumping up significant cash. Even with a successful test of the silicon biosensor in six months, ABI will probably have to give away the company in order to attract even modest investment, i.e., a new share issue at less than 5c per share etc etc. Things are not looking good.
ABI
ambri limited
