First possibility: I was told that DaVita is switching from purely using concentrate to a dialysate cartridge system. From what i am aware of, Baxter and B Braum are the players with a patent on the dialysate cartridge. The dialysate cartridge still uses bicarbonate powder so that is something that Rockwell sells. I am just not entirely sure Baxter and B Braum are going to buy the Bicarbonate powder from Rockwell. Its either they buy from Rockwell or Fresenius or imports.
Second Possibility: Possible that DaVita is buying from Fresenius, but Fresenius then coming to Rockwell with a long-term contract doesn't make sense. Because this would mean that DaVita indirectly orders from Rockwell. It could be for different products but I am not certain about this.
Thanks Alex. I’m still trying to understand the landscape of competition in this industry. Regardless of the perhaps low margin nature of that lost revenue, It’s a bit unsettling that Davita can up and walk it out the door. If it’s so low margin begs the question are they replacing it even more cheaply or are they willing to pay a premium for the supply diversification.
Will be interesting to see what the upcoming announcements are that management alluded to on the CC
Yea, I agree its a bit murky how the landscape is like, since the management has clearly emphasised many time that this is a 2 player market. I do think that if they are switching to cartridges, RMTI can get orders for the bicarbonate powder from Baxter or B Braum or Fresenius as well. Cheers. Keep watch for the upcoming long-term supply contract announcement. Mgmt said it should be the end of the month.
Thanks for writing this up. Question….if this is a 2 player market does that mean the $31-38m of Davita purchases are likely going to Fresenius?
Well this is a bit of a tricky question.
First possibility: I was told that DaVita is switching from purely using concentrate to a dialysate cartridge system. From what i am aware of, Baxter and B Braum are the players with a patent on the dialysate cartridge. The dialysate cartridge still uses bicarbonate powder so that is something that Rockwell sells. I am just not entirely sure Baxter and B Braum are going to buy the Bicarbonate powder from Rockwell. Its either they buy from Rockwell or Fresenius or imports.
Second Possibility: Possible that DaVita is buying from Fresenius, but Fresenius then coming to Rockwell with a long-term contract doesn't make sense. Because this would mean that DaVita indirectly orders from Rockwell. It could be for different products but I am not certain about this.
Thanks Alex. I’m still trying to understand the landscape of competition in this industry. Regardless of the perhaps low margin nature of that lost revenue, It’s a bit unsettling that Davita can up and walk it out the door. If it’s so low margin begs the question are they replacing it even more cheaply or are they willing to pay a premium for the supply diversification.
Will be interesting to see what the upcoming announcements are that management alluded to on the CC
Cheers
Yea, I agree its a bit murky how the landscape is like, since the management has clearly emphasised many time that this is a 2 player market. I do think that if they are switching to cartridges, RMTI can get orders for the bicarbonate powder from Baxter or B Braum or Fresenius as well. Cheers. Keep watch for the upcoming long-term supply contract announcement. Mgmt said it should be the end of the month.
Thanks for writing this up. Question….if this is a 2 player market does that mean the $31-38m of Davita purchases are likely going to Fresenius?