I thought I would post a summary view of what attracted me to invest in CGNH and ask others on this board to comment on my thoughts.

During my career in healthcare I have become convinced of the need for personalized medicine. Many of the drugs approved by regulatory authorities do not work in patients who present with diseases for which such drugs are approved. Consequently when Genentech commercialized a diagnostic test to support the use of its breast cancer therapeutic herceptin, the medical and commercial success of combining a diagnostic test with a treatment was a signal to me that companies with emerging diagnostic technologies offer significant investment opportunities.

An initial market search indicated that the global point of care market generated more that $14 billion in 2009 and is estimated to grow to close to $20 billion by 2015. Some of the individual segments of this global market are very attractive. For example the blood chemistry and electrolyte market alone generated more than $2 billion in sales in 2009 and is predicted to grow to approximately $4 billion in 2015.

While conducting research on Merck KGaA's business I discovered their collaboration with CGNH to pursue the development of specially coated paramagnetic beads. CGNH's proprietary process of coating traditional iron oxide beads with silver, thus making them more sensitive to light was intriguing and appeared to me to offer a significant commercial opportunity for Merck. Continuing to research these silver coated beads, I discovered that CGNH's beads increase the testing sensitivity by a factor of five over currently available beads and that Merck held an exclusive license to these beads via a fully executed licensing agreement.

At this point in time I concluded that the potential of these beads held much greater value to CGNH than to Merck, especially as to their potential influence on CGNH's share price. And with the recent announcement of a second agreement with Merck, CGNH has positioned itself to be the recipient of significant potential revenue by

1. Receiving 30% of the Net Sales generated by Merck with the silver coated beads
2. Selling Merck bulk beads that Merck will coat with proprietary formulations for specific diagnostic markets separate from the market in which the silver coated beads will be used.

Through research into CGNH I discovered that CGNH developed the beads to support their development of a proprietary IVD POC analyzer with an initial test for heart attacks. The advantages of such a device presented clear commercial opportunities to me

1. the first POC analyzer to use chemiluminesence, the best detection technology available and used by the majority of large laboratory analyzers
2. a portable, stand-alone and fully automated POC analyzer
3. a proprietary triggering mechanism that is covered by several patents
4. a POC analyzer capable of producing within 15 minutes the sensitivity and accuracy of tests currently performed in large laboratory facilities with a time lag of 2 hours or longer
5. use of proprietary, self-metering disposable cartridges specific to the POC analyzer

Thus the POC analyzer presents CGNH with the opportunity to execute a razor and razor-blade business model. CGNH can sell the IVD analyzer at a price with a small mark-up above its costs to ensure as wide a placement as possible and then establish a significant revenue stream by selling a variety of "razors" specific to the analyzer. At present CGNH has four such "razors" in development

1. Troponin I
2. Plasminogen Activator Inhibitor Type-1
3. Heart Failure Risk Stratification
4. Heart Failure Genomics Risk

CGNH's business model calls for a licensing deal with an established (hopefully one of the majors) IVD company to manufacture and commercialize their analyzer and cartridges. CGNH's decision to avoid the costs and risks associated with establishing a cGMP manufactruring facility IMO dramatically reduces the risks that will confront the commercial success of their products.