Bioprogress is a stock I have been in and out of quite a few times since it floated in May but not much mention here on the Investors' Room. Does anyone else follow this stock. I see it is up 1.5p today and a few good buyers seem to have appeared.

Somewhat long but very good post from Elikkos Georghaides on Ample and worth a read.

The purpose of this post is to hopefully clarify the fiasco created by Stanelcos incorrect and misleading announcements.

1) Yesterday they issued an AFX purporting to correct an allegedly misleading statement put out by BPRG that the former had been ordered to pay the latter damages. Stanelco were incorrect as BPRG NEVER made such a claim. They quite clearly referred to the court order for costs which Stanelco had been ordered to pay.

This was evidenced by STANELCOs further AFX put out today correcting its previous misleading one. In particular todays RNS which appears to come from STANELCO states:


"(Correcting this item from yesterday to show BioProgress never claimed that Stanelco had been ordered to pay damages, but rather at this point only costs)."

There at least appears to be some agreement on the FACT that "the court had made an order for Stanelco to pay costs to it,( i.e. BPRG) and must make an interim payment towards these costs of about 180,000 stg within two weeks"

2) ISSUE OF DAMAGES

i) As to the issue of damages STANELCOs latest AFX reads " the UK Patents Court has not ordered it to pay damages to BioProgress PLC in a dispute over patent applications."

On its own this statement is also misleading since it superficially implies that the court has actually made a decision (i.e. refused to make an order) pertaining to the issue of damages whereas in fact it has not. This confusion is further compounded by the contents of their subsequent paragraph which states that " the court will not make a final order".

ii) The reality and accurate position is that the only financial order which the court apparently made related to the issue of COSTS and since (on application of basic principles) such orders usually follow the courts finding on the principle issue, namely of breach of primary patent, it is not surprising that STANELCO were ordered to pay a substantial amount of BPRGs legal costs.

Nor is it surprising that the issue of damages (which is far more complex and more difficult to assess) was postponed to to a future hearing date.

iii) However, again (and also applying general priniciples) the courts decision on the question of damages usually follows its findings as to the main issue.

This finding is accurately encapsulated in BPRGs AFX the contents of which are undisputed and which reads as follows:

" In its earlier judgement the court held that Stanelco had MISUSED BPRGS CONFIDENTIAL INFORMATION by making the fillings which founded the 3 families of patents."

iv) However, STANELCO apparently wishing to cause yet further confusion added that:

" the court will not make a final order until the company's APPLICATION to admit further evidence, which may result in a reconsideration of some of the judge's findings, has been determined."

Indeed they seek to persuade the reader and no doubt (particularly) their shareholders that, the court is unlikely to order them to pay any damages and certainly not more than nominal ones.

v) Before dealing with the principle point raised by STANELCO in this part of the AFX, (namely their belief that they would have to pay no more than nominal damages), it is worth pointing out that that there is a distinction between evidence which is really only relevant to the quantum of damages and which arises only following the courts finding as to the main issue, from evidence which is relevant to that main issue and which should have been adduced during the original hearing of that issue.

The admission of the latter kind of evidence would require an application for leave of the court since it effectively amounts to a request of the court to reconsider its original decision as to its main finding. In short it would amount to an appeal to the same court to set aside all or part of its original finding. This would be quite extraordinary and whilst as I have previously stated this area of law is not my speciality, I would find it quite extraordinary to believe that such a procedure exists. But assuming it does, (again applying general principles), before granting such leave, the court would have to be satisfied that there was very good reason for not introducing such evidence during the main hearing.

I believe the above point is hypothetical, since STANELCO themselves have stated that their belief that such evidence would affect the amount of damages. The reason I dealt with it above was because,

a) STANELCO referred to their APPLICATION to admit further evidence, and such evidence relating purely to quantum of damages would not ( I believe), ordinarily have to be the subject of a special application for leave. having said that, I should point out that it would appear from AFX issued by BPRG that " At the end of the hearing, Stanelco indicated that it had commenced an application to request the Court to reconsider CERTAIN ASPECTS of the previous judgment. Stanelco was ordered to file its evidence within seven days."

b) STANELCO stated that such evidence "may result in a reconsideration of some of the judge's findings". This again is ambiguous and misleading, since it superficially implies that such evidence could result in "a reconsideration of some of the judge's findings" on the main issue. That is clearly not the case, because STANELCO go on to say that its effect would be on the amount of damages and nothing else.

vi) And that brings me back to the principle point conveyed in this part of STANELCOS AFX. This appears to be their own belief in the fact that the effect of such evidence would at worse reduce their damages to a nominal level.

I confess, that as a lawyer, I find their belief difficult to accept for the following reasons.

i) The order to pay damages, usually follows the courts main finding which was that "STANELCO had misused BPRGS confidential information"

ii) Evidence relevant to or having a bearing on the issue of damages, would ordinarily (though not necessarilly) have some bearing on the issue of costs. And we know that STANELCO have been ordered to pay more than nominal costs.

iii) "Yesterday, the Court made an Order for the commencement of the procedure for assessing the amount to be paid in damages by Stanelco to BioProgress for breach of confidence"

iv) It should not be forgotten or overlooked that as part of its main findings on the principle of breach of confidentiality that the "Court made various declarations ....(which)... made reference to BioProgress' SOLE entitlement to the MAIN claim and ALL except three subsidiary claims in the Master Patent." It also "clarified that BioProgress' entitlement to the main patent claims in the Master Patent conferred NO RIGHT upon Stanelco TO USE any of the (3) subsidiary processes WITHOUT the PERMISSION of BioProgress.

In summary the following appears quite clear to me:

1) That the courts judgement on the principale issue was completely in favour of BPRG.

2) That as a direct consequence even STANELCOS claimed victory as to the 3 subsidiary processes is an empty one because it cannot use them without permission of BPRG. This is partly why "Stanelco was ordered to disclose details of its foreign patent applications, so that ownership of all patents and patent applications in the Master Patent family can be dealt with at a further, final hearing in approximately 4-6 weeks time."

3) That pursuant to the courts judgement on the main issue of breach of confidentiality by Stanelco, they were ordered to pay costs with an immediate interim order for 180,000 within 2 weeks.

4) That pursuant to the same finding the court has made a further "order for the commencement of the procedure for assessing the amount to be paid in damages by Stanelco to BPRG for breach of confidence."

5) That Stanelco have been given leave to submit further evidence within 7 days the object of which is to persuade the court to "reconsider certain aspects of its decision", but the effect of which at best (in Stanelcos own rather "optimistic" opinion) is limited to affecting only the quantum of damages payable by them. My own opinion, (for what its worth) is that Stanelco have an uphill task, to put it mildly, bearing in mind the courts principal finding.

6) That ever since the original judgement, AFXs issued by Stanelco have at best been ambiguous and confusing, and at worse downright misleading. Indeed, this is why they even had to issue a further AFX withdrawing their erroneous allegation that BPRGs previous AFX was incorrect.

As a lawyer, I dont believe for one moment that any of the misleading AFXs were approved by Stanelcos lawyers.

This has been a rather long post, but I have taken the time and trouble to explain matters and have hopefully clarified certain issues of understandable concern to fellow BPRG shareholders. In my view there is NOTHING whatsoever to be concerned about. The judgement is very clear, and whats more, I believe that after all the hot air blown by Stanelco has dissipated, they will be ordered and will have to pay a rather hefty bill in damages to BPRG. I also dont believe for one moment that Stanelco are serious about appealing the courts main findings. The judgement is based primarily on fact and unless there is any point of law giving rise to an appeal the Court of Appeal will not interfere with a judges findings on facts.

Morning all,,lets hope for a slight bounce..

i didnt think i would be able to buy back at 102p last week, now i am wary of buying way below that price.

the sums quoted wrt damages seem paltry wrt market cap etc, so i think the old cliche "the market hates uncertainty " is strongly in force here.

superrod: No sums of money have been mentioned yet in respect of DAMAGES. The monies mentioned to date relate to Court costs. It does not take a genuis to work out that an award of costs to BPRG strongly suggests that this is a slam dunk case in favour of BPRG. The recent flurry of incorrect AFX news stories are not too surprising (I use Bloomberg/Reuters)...hence the need for STANELCO to clarify them. It just underlines the need to verify the source of the information. Once BPRG's legal beavers have had a look at STANELCO's Court submissions the damage claim can then be processed.

Re recent SP movements, I agree the mkt does not like uncertainty, but there isn't any and once punters catch up with the true situation the picture should change. I hope this clarifies events for you.

thanks

i should read news more carefully. still looking for an entry point.

A bit flat with posts here today ??

I didn't want to upset anyone.

Why has it gone down today?

Because the shares were overvalued and kept aloft on a high octain mixture of hype and hope. I like BPRG and will look to buy in at around 70p. This is not a deramp, but just my own valuation of the coy as it currently stands.
I have held both BPRG and SEO and would like to see them settle their differences in a way that gives value to both companies. The current fight to the death will do neither of them any good. Only the leagl eagles will make any money out of this. I think that SEO are on a pasting to nothing, but in the long term they will come good. Their own technology is a potential market leader.

Share heavily oversold and has met lower Bollinger Band indicating a buy signal. Should in theory see a bounce tomorrow!

BioProgress PLC
09 November 2004

Press Release 9 November 2004

BioProgress plc

('BioProgress' or 'the Company')

BioProgress reaches agreement to provide new UK film manufacturing capacity and
unveils new 'LOCUM' virtual manufacturing strategy

BioProgress plc (AIM: BPRG; NASDAQ: BPRG), the provider of innovative delivery
mechanisms for the pharmaceutical oral dosage markets, announces that it has
reached agreement with Custom Pharmaceuticals Limited ('Custom') on the terms
under which BioProgress will install a film manufacturing line in Custom's new
pharmaceutical contract manufacturing facility currently being built at
Moulescoombe, near Brighton, in the south of England. A letter of intent has
been exchanged, incorporating the primary commercial terms, and the legal
documents are being prepared for signature.

Custom (
www.custompharm.com
) is a privately owned contract pharmaceutical
manufacturer, established in 1979, which manufactures prescription and
over-the-counter (OTC) medicines, vitamins and herbal supplements. Under these
proposals, BioProgress will occupy a segregated part of the new Moulescoombe
facility and will install one of the film casting lines purchased from Valence
Technology BV, which was announced on 17 August 2004.

The film line and associated film manufacturing equipment will remain the
property of BioProgress. Custom will provide the building space to full
pharmaceutical standard, and will be responsible for maintaining full European
and US FDA regulatory manufacturing approvals for the production of
pharmaceutical grade film and film containing pharmaceutical actives in
BioProgress's SOLULEAVES(TM), WAFERTAB(TM) and FOAMBURST(TM) technologies, as
well as films required for the SWOLLO(TM) TABWRAP(TM) and NROBE(TM)
technologies.

Custom will provide the necessary personnel for film manufacturing, quality
control and quality assurance, as well as the qualified staff to sign off
batches of pharmaceutical film products on a cost plus basis. Custom will
provide raw material and finished goods storage, and access to extensive
state-of-the-art technical and analytical laboratories. BioProgress will have
dedicated office space and meeting facilities for the use of BioProgress staff
and customers on site.

Nigel Richardson, Chairman of Custom Pharmaceuticals said 'Contract
manufacturing of medicines is becoming a fiercely competitive global business
requiring us to invest in state of the art facilities like Moulescoombe in order
to stay competitive as new low cost pharmaceutical manufacturing capacity is
coming on line from China and India.

This agreement with BioProgress enables us to participate in an exciting new
business opportunity which utilises our high quality pharmaceutical
infrastructure as well as our core skills and expertise to enhance our revenues
and profits. It gives BioProgress a much lower cost and faster track entry into
pharmaceutical manufacturing of its films, so it is an agreement where everyone
wins..

As we will be manufacturing BioProgress films on site we are also keen to have
early access to the new BioProgress dosage forms like SWOLLO(TM), TABWRAP(TM)
and WAFERTAB(TM) which we can see could have a serious impact on the traditional
pharmaceutical manufacturing cost model and could offer Custom a significant
competitive advantage in our contract manufacturing core business.'

BioProgress also announces a new business model and strategy called 'LOCUM'
which stands for Low Cost, Out Sourced, Capital Based, Unrestricted,
Manufacturing. By utilising the already established infrastructure, skills and
expertise of existing approved pharmaceutical contract manufacturers,
BioProgress will be able to bring on line film manufacturing capacity in various
parts of the world much faster and at a fraction of the cost of building and
staffing its own facilities. The agreement with Custom is the first
demonstration of this new strategy.

These 'virtual manufacturing' partnerships also enable BioProgress, as a second
stage, to showpiece its new dosage form technologies like SOLULEAVES(TM),
TABWRAP(TM), SWOLLO(TM) and WAFERTAB(TM) in real manufacturing locations, and to
provide initial contract manufacturing capacity for customers wishing to adopt
these technologies, where they fall outside of exclusive licensing agreements.

Graham Hind, Chief Executive of BioProgress said: 'We are very pleased with this
agreement with Custom which will serve as a template in the discussions we are
currently having to reach similar agreements with pharmaceutical contract
manufacturers in other parts of the world. Our film casting line at the new
Custom facility near Brighton is expected to be operational by May 2005 and will
have three times the capacity of our existing Tampa facility in the US.

One of the challenges we have faced is to be able to provide high quality film
production capacity to support companies like Wyeth (NYSE: WYE), Perrigo
(NASDAQ: PRGO), FMC (NYSE: FMC) and Colgate Palmolive (NYSE: CL) who for
security demand multiple sources of supply from suppliers with the capability to
follow and support them as they globalise products. Our LOCUM strategy will
enable us to properly service the future requirements of both existing and new
customers in an extremely cost-effective way, while giving us the added
flexibility of being able to rapidly gear up additional production capacity.'

- Ends -

Forward-Looking Information.

The Ordinary Shares of BioProgress plc are registered under the US Securities
and Exchange Act of 1934. This announcement contains certain 'forward-looking
statements' within the meaning of the Private Securities Litigation Reform Act
of 1995. These statements are based on management's current expectations and
are subject to uncertainty and changes in circumstances. Actual results may
vary materially from the expectations contained in the forward-looking
statements. The forward-looking statements in this release include statements
addressing future financial and operating results and the timing and benefits of
the reorganisation. Detailed information about factors pertinent to the
business of the company that could cause actual results to differ is set forth
in the Company's filings with the Securities and Exchange Commission. The
Company is under no obligation to (and expressly disclaim any such obligation
to) update or alter its forward-looking statements whether as a result of new
information, future events or otherwise. This announcement is for information
only and does not constitute an offer or invitation to acquire or dispose of any
securities or investment advice. The distribution of the announcement and/or
issue of securities in certain jurisdictions may be restricted by law. Persons
into whose possession this announcement comes are required to inform themselves
about and to observe such restrictions.

Cheers emailpat.

morning all

dd-are you a buyer yet?

Emailpat yes.

At 60p they may be worth a look.

Dil-keep up....that was back in july;-)

160 (short term) more like, this company is going places. 360 long term. Keep a look for even more agreements/contracts in the very near future. Excellent prospects at last.

Good news yet down today!!!! Don't understand, glad I switched most of my money into Filtronic short term.

Gotta hold 90p today or it's 80p again pdq, IMO

Will start to look at re-entering in the 70's or below as before.