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Wednesday, September 18, 2013 10:58:25 AM
Thanks to Valuefinder8:
A supplier contract was initiated by Walmart according to the filings. It was also renewed 2 times since the initial agreement.
Walmart is not a bad thing at all. The reason why it had a relatively bad name for the economy in the 90's was many sectors and industries prior to the year 2000 had multiple layers of middlemen. These people transacted commerce between the manufacturers and the final consumers. It used to be raw materials, then manufacturing, then large warehouse buyers en masse, then distributors and finally retailers. When Wal Mart and Sams club changed the chain of command, especially sams club, they basically set up agreements direct with manufacturers and bought product en mass to give the absolute lowest price that could be produced and they sold direct to the consumer out of the warehouse. DECN was approached because it fit their distribution bill to the tee. They see the potential too and of course know what it will mean to their bottom line. Genstrip was a no brainer for their product additions. Its a no brainer for all the stores out there, we will hear more about that in the future I think.
One of the negative things JNJ and the other big Pharma companies had to endure in order to create their 20 Billion dollar Blood Glucose monitor , was not only giving away a billion dollars in meters, but they had to spend hundreds of millions on advertising, hundreds of millions in power broker lobbying expenses, hundreds of millions in wineing and dining doctors via pharmaceutical sales reps and tens of millions in retained lawyers in order to deal with fall out and pending litigious issues. This is on top of high paying salaried jobs, large white collar salaries and bonuses corporate expenses some deemed luxurious and alot of pensions and rising costs now incurred by the larger matured company. All these expenses add up to the cost of a product, not to mention the research and development initially 15 years ago. Ever wonder why a 4 dollar pill can be sold for 20 cents 7 years later when the patent expires?
So even though the test strips are similar, Genstrip and their set up is vastly cheaper, easier, more flexible and nimble then the brand name Pharmas. And the beauty is they can reap the benefits of all those Billions big pharma invested in the key stroke of an enter button.
The court battle battle was about big pharma trying to say "we gave out a billion dollars in meters, a new company shouldn't be able to destroy us because they made something that works with our meter" Basically they are mad they laid all the ground work and it cost them billions and now a better, lower cost producer can utilize their infrastructure without those expenses. The free market economy should triumph over big pharma crying.
It is the same idea as if a mom and pop burger joint was upset McDonalds wanted to move next door. The mom and pop shop may not like it, but they have no legal reason to keep mcdonalds out. Competition is not only legal, but it keeps the country going.
For those of you talking buyout, think harder. For those wondering why the street hasn't caught wind yet, don't be upset. This is not such a bad thing that some daytrading group hasn't come in here and blown it to 5 bucks in one of their "plays". That type of volitility and lack of clear direction of what the company is worth would change potential negotiations anyways. Letting Greed and Fear enter the market at this point is not a good idea. I would rather see how the company will play with their 4 aces., they have something very powerful I suggest they use it wisely.
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