DECN was mentioned (among 7 other small companies) in a close-end forum where members pay $ 4.500.- per year. The fee is high but it sorts the wheat from the chaff as they say on their Webside.
The subject was about a revolution taking place from small players against the monopoly from old economy.
The set-up for the article were various successful rulings against market dominating companies covering the whole spectrum of sectors, but a Special weight was given to a case who made rather heavy waves. Nestle/Nespresso (You know where George Clooney Plays in the Commercials) Part of the article was the UK ruling in favor of 2 small companies against the Giant Nestle.
The U.K. ruling said: That capsules for Nespresso coffee machines does not infringe patents. (Sounds familiar: In this case coffee machines versus capsules and in our case blood glucose monitors versus test strips) According to court papers, Nestle reportedly sold around $ 4.2 billion worth of Nespresso products in 2012 but claimed that its revenue is under threat from competitors selling coffee capsules for its machines. (Well to me sounds very familiar with what J&J claims versus DECN) As with the J&J case, Nestle of course did not accept this ruling in 2013 and took it as far as they could to France (Member of the EU) only to face a very hard worded defeat.
This verdict is considered as one of the latest and biggest challenges and or blow to Nestles dominance.
For every company mentioned in the blog, a short break-down is given about the opportunities those companies could have, once a ruling would become definitive in their favour.
By DECN it says:
It could be anticipated that GenStrip would be well received by the distributors due to new payment changes for test strips caused by Medicare's mandated competitive bidding, which began July 1, 2013. The Medicare mandate is expected to lower reimbursement of supplies and medical goods for diabetics by nearly 67%. This change will affect the "direct to patient" services channel, which has more than 25% of the diabetes testing market. It seems, that DECN has as a solution to this mandate. The new Mail Order/Competitive Bidding version of GenStrip will offer the brand name market an alternative where companies in the 'direct to patient' fulfillment business can offer high quality diabetic test strips and still make a profit without forcing diabetics to endure crippling co-payments."
Decision Diagnostics could be greatly rewarded once the company begins selling the product to their distribution networks. GenStrip has superior performance and pricing than the current generation of test strips on the market. If DECN garners only a tiny fraction of the market it will make a huge impact on the company's revenues and earnings. If DECN gains 1% of the market by 2017 they will have $300 million in revenue. DECN's management is targeting market share gains substantially greater than 1% by 2017. Management's commitment and investment in GenStrip could garner Decision Diagnostics a potentially large return on their investment. DECN could make significant headway in selling GenStrip, not only to the "direct to patient" distributors but all channels including retail.
We recommend to add DECN to the watch list together with the other companies mentioned in this report and to follow them closely in the continuing court clash.
My interpretation: Adding to the watch list is not a buy-recommendation, however based on the outcome it could be upgraded to a buy-recommendation. If so, it could get overcrowded on the bid side. In the meantime just be patient.
AI
