66fan...Here's a couple more things to make you say hhmmmm...
This line item is found in the Affymetrix 10Q Net Cash From Investing Activities during the six months ended 6/30/2003:
Purchase of option to license technology (3,000)
Here's the description of that Item:
Our investing activities, other than purchases, sales and maturities of available-for-sale securities, primarily consisted of capital expenditures, the purchase of an option to license technology, and the purchase of technology rights of $5.5 million, $3.0 million and $2.9 million, respectively, for the six months ended June 30, 2003, as compared to capital expenditures of $13.7 million for the six months ended June 30, 2002. Capital expenditures during the six months ended June 30, 2003 related primarily to investments in computer hardware, storage management systems, along with continued expansion in manufacturing and other operating facilities.
If you check their news releases for the past six months you will not see a release related to spending $3,000,000 to purchase an option to license. Of course, that doesn't necessarily mean it has anything to do with DNAPrint.
The reason I find this interesting is that I didn't realize that Affymetrix had such strong business ties with Orchid. In fact, Affymetrix was invested in Orchid and wrote down $3.2 million of that investment during the period ended June 30, 2002:
In addition, for the six month period ended June 30, 2002, we recorded a $3.2 million write-down related to an other than temporary decline in the value of our investment in Orchid BioSciences, Inc.
And it appears they have restructured a couple of other agreements they have with Orchid. Affymetrix is the rights holder to patent number 5,856,092. Orchid is a licensee required to make regularly scheduled payments and to make future royalty payments. Seems that after June 30, 2003 both of those schedules were adjusted to give Orchid some slack. I've edited because the table doesn't post well, but here are the relevant figures and notes taken from Orchid's most recent 10Q filing:
Contractual obligations:
Future patent obligations(3) $3,521,000 Total
Future minimum royalties (5) $4,730,000 Total
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(3) Such amounts represent obligations to pay future amounts over the next three years in conjunction with our acquisition of US Patent No. 5,856,092 and its foreign counterparts from Affymetrix in July 2001 as well as our obligation to pay St. Louis University in connection with our patent acquisition. The Affymetrix obligation was renegotiated subsequent to June 30, 2003.
(5) In connection with our acquisition of US Patent No. 5,856,092, we are also obligated to pay future minimum royalties as shown and $1.9 million until the expiration of the agreement related to these patents. This obligation was renegotiated in July of 2003.
What does this mean for DNAPrint, maybe something, maybe nothing, who knows. But I found it interesting enough that I thought I would post it here for anyone that wants to dig around some.
What did Tony say at one time, "there are other ways around the option. One way would be to buy back the option." Perhaps another way is to look for leverage elsewhere that allows you to realign strategic relationships. Especially when your original partner has problems of his own.
Later,
W2P
AI
