- The Washington Times - Tuesday, March 25, 2003

Shares of Igen International Inc., a Gaithersburg company that makes biological-testing equipment, spiked last week after the company said it sold some of its products to the U.S. Air Force.

Igen announced on Thursday that the Air Force bought tests designed to detect biological agents such as anthrax and botulinum toxin, which could be used against U.S. troops.

Shares were down 67 cents yesterday to close at $36.61. They rose $3.90, or 11.7 percent, on Thursday and Friday.

Analysts said they weren't sure whether Thursday's announcement led directly to the increase in Igen's share price. Dennis Roth, director of research for Chesapeake Security Research in Baltimore, said the spike could have come from rumblings that a 6-year-old legal dispute will be resolved within the next two months.

Igen won a $505 million verdict in a licensing dispute with Roche Diagnostics in April after years of legal wrangling. Roche appealed the decision, and a judge heard oral arguments in the case last month. Igen and Roche have said they are in discussions about a settlement.

"The perception is that this could be resolved shortly," Mr. Roth said.

Regardless of the reasons for last week's price increase, analysts said Igen has positioned itself to take advantage of increased government spending on tests for biological agents as part of homeland security efforts. The company now has agreements with seven government agencies, including the Army, the Department of Agriculture and the Centers for Disease Control and Prevention, which use hand-held testers to find harmful biological agents.

Igen sped delivery of some testing equipment to the Pentagon in October because of increased demand. Members of the U.S. Army are using Igen's systems in tests at Fort Detrick, Md.

Igen officials declined to comment on specifics of the Air Force contract, but have said that they expect at least $5 million in revenue from biological-defense initiatives for the quarter ending March 31. The company earned $1.1 million from the same efforts last year.

For the quarter ended Dec. 31, Igen reported that net losses decreased 53 percent to $4.3 million (18 cents per share), compared with a loss of $9.2 million (48 cents) during the comparable quarter of 2001. Revenues for the latest quarter rose more than 56 percent, to $16.3 million from $10.4 million during the like period the previous year.

Mr. Roth, who does not own shares of Igen, said the business of making systems to detect biological threats is "about as hot as it gets" and that Igen's systems are among the best on the market.

Igen's trademark system, known as Origen, is based on a process called electrochemiluminescence, in which certain chemical mixtures emit light when stimulated by electrical and chemical energy. The process has been known to detect some biological agents in less than 30 minutes.

Previous technologies took hours or days.

Igen's systems are also used to test purity of food and water, detect cancer and test strains of disease for resistance to antibiotics.

"Igen is gobbling up shares of the marketplace around the world," Mr. Roth said. "They are clearly superior to anything else that's out there."

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