Abbott, Quest, Timelines, Licenses
So there were no direct responses to my post #2582 on December 15th regarding Abbott.
Yes I’m new to the stock, and sometimes newbies go over the same ground that has been covered a million times, but in my post I gave evidence which indicates that so far Abbott has not accepted the results of Phases 1 and 2, which were apparently completed by August by the third party doing that work.
If this is correct, it is interesting for three reasons.
1. We know what to look for next. HDVY should be receiving the $250,000 milestone payment due when those results are accepted. That should come far before the 510(k) draft.
2. There is a legitimate question about what is taking so long for Abbott to accept these results. Maybe 4+ months is really not so long for something like this, and maybe this question could be easily answered by the company. Last Friday I phoned the number for Scott Tobin in the latest PR. Dr. Madyastha answered the phone and he directed me to Mr. Tobin and was kind enough to give me the correct number, but Mr.Tobin was not there. I didn’t leave a voicemail and haven’t yet tried again.
3. Will Quest be able to develop its test more quickly?
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There were no direct responses to my post, but I think a couple of subsequent posts were indirect responses.
MONEY DUE FROM ABBOTT
AccipiterQ wrote (#2588), “…at this juncture how much more are we potentially owed by Abbott? 200K? That's a blip basically; big money's in Quest's results.”
This is what is due from Abbott in development milestone payments alone:
$ 250,000 upon acceptance of Phases 1 and 2 results
$ 250,000 upon successful completion of Phases 3 and 4
$ 500,000 upon filing of 510(k) or PMA
$ 500,000 upon approval of either of these
Then royalty and sales milestone payments.
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ABBOTT VS. QUEST
Degreed wrote (#2583), “Just to bring everyone back on focus we are waiting for Quest not Abbott Labs….”
I assume that Abbott does not have testing laboratories such as Quest and Lab Corp, but as I understand it, this is what is licensed:
QUEST has the right to develop and use a “Laboratory Developed Test” for urine for its own use.
ABBOTT has the right to develop and use a “Laboratory Developed Test” for urine and also for biopsied tissue, and it will develop “test kits” for these tests for sale to all the other labs in the world.
Can someone let me know why Quest is considered so much more important than Abbott? Do the tests Abbott can sell require FDA approval before they can sell them in the U.S.? Is my understanding of the licenses incorrect?
(INITIAL FEES. One interesting note which may have been discussed already (but I could not find it posted on the board) – and which may mean nothing or may mean something – is that it appears that Abbott paid $100,000 up front while Quest paid only $50,000. 10Q, Note B, Revenue Recognition: “The Company received $150,000 in cash in February 2009 in connection with two licensing agreements completed in the first quarter of 2009. Deferred revenue of $150,000 was recorded and will be recognized as income over the 15 year remaining term of the underlying patents.”)
