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MktMuser, You have a good point concerning the alternative sales organizations having the visibility of the Doctor. However, I have to disagree when you say that TGX cannot afford the coverage. I believe $24 million a year added to the revenue is sufficient to pay for all expenses and add money to the bottom line. Just look at what happened this past quarter. When JNJ exited the scene, I believe TGX had little or no sales force. In spite of this, the following quarter, TGX produced 29% of the total sales, which added $2 million dollars to the top line. And they did it without any sophisticated sales force. Now I'm not saying they shouldn't have some partners selling for them. For instance, in Europe it would be more practical to have a distributor familiar with that area selling the product for them. However, in the US, I think they could do the majority of sales themselves without jeopardizing their market position or causing any sales drop off.
With the additional money generated by selling the TheraSeed, they could pour this money into more R & D projects as suggested by �theysaidwhatwhen�. It�s more important to develop additional products as soon as possible than worrying about who is selling the product. If TGX doesn�t come up with more items to generate a revenue stream, then they will slowly wither on the vine.
BTW, I guess it interesting to argue and debate both aspects of selling the product internally versus externally. However, we all know that nothing is going to change and the company will continue to use outside sources to sell the TheraSeed.
I agree with your comments. TGX could not afford to let sales fall while they develop a sales force to acheive the same market penetration. I would prefer good commissioned sales reps. with an in house sales/marketing to direct and stimulate their efforts. Increasing sales is imperative since the last 4 years has been spent expanding manufacturing capability. R&D efforts are good but the benefit will be too far in the future to please current shareholders like me.
TGX cannot afford the breadth of coverage needed to see doctors. Furthermore, the credibility of the alternative sales organizations is igher because they come to the door with many products that make the Doc's investment of time worthwhile. Thus, I cannot see how an internal sales force can readily do the job.
Thanks. I appreciate the info on "Oak Ridge".
Found the discussion on marketing versus research & development efforts curious since TGX has had a very modest R&D Budget over the years. We established that marketing in not their principal interest either.
I believe they spend considerable time and effort buildinr capacity,and controlling manufacturing production and quality. Now since that effort is complete, they could be at a cross road. Should they define themselves as a "developement & manufacturing" company? Or should they be a totally intergrated company? In the short run intergrating marketing into the business would have the biggest payoff. The larger margins resulting from saving the marketing partner's costs could be used to support a larger R & D effort.
At least that is what I think.
Once again, I�m not that informed concerning the Oak Ridge. However, this except from their annual report deals with the subject. The key phase to notice is the one that states: �The Company also believes that the PSP Project may allow it to explore options for applying this technology to other uses, including the production of isotopically engineered materials for use in medical and non-medical applications, though there are no assurances that this will be achieved.�
>>>>The U.S. Department of Energy (DOE) has granted Theragenics access to unique DOE technology, known as the Plasma Separation Process (PSP), for use in production of isotopes, including Pd-103 (the ";PSP Project";). This technology venture represents part of a DOE initiative to redirect Cold War assets to peacetime use and cushion the economic impact of U.S. Defense Department cutbacks. The Company expects that the use of the PSP technology could significantly increase its Pd-103 capacity and allow for expanded use of Pd-103 and TheraSeed� beyond treatment of prostate cancer to new medical applications. The Company also believes that the PSP Project may allow it to explore options for applying this technology to other uses, including the production of isotopically engineered materials for use in medical and non-medical applications, though there are no assurances that this will be achieved. The Company is constructing a facility in the Oak Ridge, Tennessee area to house the equipment, infrastructure and work force necessary to support the production of isotopes, including Pd-103, using this DOE technology. Construction costs of approximately $17.9 million have been incurred on the PSP Project through December 31, 2000, and the Company expects to invest an additional $7.1 million - $12.1 million through 2001 to complete this manufacturing and R&D facility.
The PSP Project is expected to become operational in 2001, though no revenues are expected to be generated from the PSP Project in 2001. Accordingly, the PSP Project is expected to increase operating expenses by approximately $2.0 million in 2001, with the significant portion of these expenses incurred in the second half of the year. Additionally, costs to be incurred in the production of stable isotopes are expected to require an investment in inventory of up to $5.0 million.
As part of the PSP Project, the Company has leased land in the Oak Ridge, Tennessee area and equipment previously used by the government to produce isotopes. <<<<
Hope this helps answer your question.
Retired investor with some sales/marketing experience. I have owned stock in TGX since 1993.I believe the stock is cheap now. Solid current earnings and opportunities to grow the use of Theraseed.
Also Pd103 appears to have potential in other medical applications. It is a soft gamma with a short half life. Also I understand it is not very toxic. I would not be surprised to see Pd103 being used in non prostate medical applications. Will TGX be able to create a demand for Pd103 selling through marketing partners is questionable.
I am not clear on the potential of their Oakridge facility.Have you heard anything specific on what they hope to get out of Oakridge?
Very good observation and comments. Once you see the financial impact of the company selling their own product versus using distributors, it is definitely an eye opener. The question is: Why is TGX so insistent on using distributors when the financial benefits of selling your own product produce far better returns?
BTW: do you work for a University?
Theraseed is argueably the best treatment for early stage prostate cancer. Efficacy second to none. Lowest side effects of all treatments. First J&J could not improve Theraseed's market share. Now with four outside marketing partners, unit sales show no improvement.The sales growth slowed when TGX gave up the sales responsibility.
Reviewing this quarter's report, it is painfully obvious that the amount of revenues given up by TGX to the marketing partners is huge.It would appear to be in excess of $6,000,000 per quarter if all sales were credited to the marketing partners. Couldn't TGX build a marketing organization for less than $24,000,000 a year? Such a captive organization would be dedicated to selling Theraseeds; unlike the J&J or the other current marketing/sales partners that have other responsibilities that distract them. TGX must control the Theraseed sales and marketing effort and no longer be a stepchild.It certainly can afford to build their own marketing organization with the money curretly wasted on marketing partners. TGX can't do any worse than the current marketing partners. If nothing else, the medical community would be dealing directly with TGX making it easier to get the" benefits of Theraseed" message across.
At least, that is my opinion.