Post Mort-em
Putting 2 and 2 together, I believe that Thermo-Fisher made pronouncements or provided advertisement information that went beyond the Reg -S requirements for Research Use Only designation in the U.S. This was probably inadvertent. Having external sales staffing with these types of restrictions was probably an unworkable situation from the start. The US may have zealously pursued this matter since there are many competing U.S. firms trying to rapidly expand NGS systems. In the end the systems will probably be seen to be complimentary. But initially, there may be some competition since finite dollar budgets are allocated toward genomic sequencing, companion diagnostic platforms (a relatively new area for many small to mid sized clinics and hospitals).
While Biocartis will undoubtedly have to ramp US sales staff, they will no longer be sharing the revenue with Thermo. More importantly, they will have better control of staff training an sales information that is disseminated. They will be looking to leverage partnerships to minimize the US staff investment. I was hoping to get an update on the Onco Dx prostate proof of concept testing. GHDX already has a team of sales professionals calling on Urologists. There will be a lot of synergies cross-selling an OncoDx product on Idylla.
As bad as the half year update was due to the U.S. distributor issue, I think the dearth of any news on any of the other fronts (OncoDx Breast validation, OncoDx Prostate proof of concept, China registration-Manufacturing facility, Japan registration, FDA 510 filing, etc.) was equally bad. Past announcements have timed a positive news flow to coincide with the release of financial updates. There was no such flow of positive news this time.
I'm still long. My Biocartis shares are frozen in my Schwab due to the Reg S violation. I'd be selling if the product reviews were identifying performance problems or if new Onco IVD competition was apparent. Neither of these conditions are apparent. The Idylla reviews are very positive. The problem is definitely a business execution issue. With that in mind we need to see how management learns and responds to this setback. They deserve a second chance, mostly since the distribution agreement was inherited from prior management. That said they need to be closely scrutinized to see if they are capable of delivering on tremendous product potential or even their own guidance.
FL