No, I read it in todays S S Times by Keith Woodford
Printable View
It's the final article in a three-part series by Woodford in the SST, and will probably be available on his blogsite tomorrow or the next day at:
http://keithwoodford.wordpress.com/feed/
The first two articles, which are already on his site, described the new clinical research that is confirming the risk factor in A1 milk, and the commercial danger this poses the NZ dairy industry. This third article in today's SST discusses why the NZ industry has failed to switch to A2 - largely due to industry politics and Fonterra's scaredness to admit there is anything wrong with the A1 milk it has been selling all these years.
Today's article has some interesting info about ATM's patents on testing cows for A1/A2. The patents don't actually apply in NZ and will start to run out in overseas countries from 2016. This helps explain the urgency of getting A2 milk on the market quickly in the UK and US.
It's a good series that in many ways sums up where the whole A1/A2 issue is at. Essential for every ATM shareholder, regardless of whether or not they already have Woodford's book.
Im wondering if, with the patents running out in 2016, how much of that is factored into the current price?
No I have not but then most of the "sellers" may not have either MAC. In other words its just the perception (like mine) that could be holding back new investors.
I would doubt whether investors are aware of all this, Harrie. I've been following A2 for years but am not familiar with the IP details (though I probably should be). Anyway, in addition to the tail-hair test to verify whether a cow is pure A2 or not, on which A2MC gets a fee (offshore), there's also quite a lot of trademarking around whether you can market your milk as A2 even if you know it is. There may of course be ways around this like saying it is "A1-free" - not sure how tight the restrictions are pr whenthey run out.
This is why I was asking the question the other day seeing if anyone had done the sums to see if ATM could make it as a 'standard milk producer', meaning if the whole a2 premium thing 'comes to an end' via clever marketing etc, are ATM big enough (or when will they be) to just compete as a me too company (worst case - unlikely I know but not my point).
Cheers,
NBT
Well that is the issue NT. Nobody really knows or understands how relevant the IP and patents are to ATM's value proposition both until 2016 and thereafter.
All any investor reads about is that offshore patents run out in 2016. There is no qualification to that statement, so I for one have no idea how that will affect ATM's future prospects and therefore future SP. MAC seems to think that it is not an issue because of the multi level patents which exist, but I wonder if the market is aware of all that.
Based on the headline that patents expire in 2016, I'm just putting it out there that with that doubt, maybe new money is staying out?
No, Woodford did not say offshore patents run out in 2016. What he said was (and I'm sure he won't mind this being reproduced here, so that we are getting our facts right, bearing in mind that he is talking ):
"Most countries are currently constrained by patents held by the A2 Milk Company which are perceived as controlling the right to select herds free of A1 beta-casein. These patents, which are not effective in New Zealand, run out in most other countries starting in 2016. So we [i.e. the NZ dairy industry] have less than two years to build our lead. Thereafter, other countries, and particularly the USA with its mega-sized herds and the use of sex-selected semen, can quickly catch up.
"From a purely business perspective, the other key issue is the role of the NZX-listed A2 Milk Company. To date they have used their patents to good effect outside New Zealand to keep others at bay. They have made spectacular progress in Australia, but have yet to transfer this success on to the world stage."
Some details about ATM's IP suite including patent expiry dates were given in its 2012 strategic plan, pages 15-17.
http://thea2milkcompany.com/wp-conte...-Plan-2012.pdf
NB the annotation shown in very small type, that the expiry dates shown are the first that apply anywhere, and do not apply to all markets.
Actually there's a lot more in that strategic plan that's worth re-reading, including the section that makes clear the Australian model will be adopted in other markets - in other words, no more mucking around.