What a momentous week with David Cameron exercising his veto at the EU summit. Having heaved a hearty sigh of relief, my views are as follows:
- The further the UK can detach itself from the expensive, inefficient and unelected decision making processes which lie at the heart of the EU the better.
- The UK is now really under pressure to rebalance the economy so as to reduce consumption and increase manufacturing and exports.
In this regard, Immunodiagnostic Systems Holdings (IDH - in which I have a shareholding) exemplifies the Mittelstand type company which the UK needs to foster many more of. However, the recent share price movement from 1200p in August 2011 to 445p today displays the heavy handed way in which the share price formation process functions. The fall arose on the back of fear about the impact of emerging competition in the Vitamin D market. At 1200p, the price was stretched but at 445p IDH is in my opinion very attractively priced. I see the company as having four growth modules, namely:
From Manual to Automated
The acquisition of the IDS-iSYS instrument in 2007 provided IDH with the platform to expand from the manual assay market into the automated assay market. The latter is some four times bigger than the former. However, being involved in the manual assay market exposes IDH to research scientists and hence to some of the leading developers of new assays, the benefit of which is described in point 2, below.
2. New assays
IDH's focus is on diseases associated with aging (a growth market), namely osteoporosis, rheumatoid and osteoarthritis, renal and cardiovascular disease. Its development programme involves identifying opportunities for new assays which can be used in a panel of assays on IDS-iSYS and thereby enable more information to be obtained about a sample from a single run through the instrument. It also seeks to develop assays which produce more accurate data (which can lead to better patient outcomes) than existing diagnostic approaches. Because of the relationship with the research market, the platform technology for some assays is sourced from third parties rather than being developed in-house. This enables third parties to access an automated platform (IDS-iSYS), which they might otherwise find difficult to achieve.
In identifying opportunities, IDH seeks to complement the products supplied by the main diagnostic providers rather than compete with them.
3.…
