Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Erik Schneider - UBS.
Erik Schneider - UBS
Hi, good morning. I think just two quick questions, one on the Abaxis royalty; did it flow through the revenue component for license and royalties? Did you sign any costs to those types of royalty payments?
Ron Zwanziger
We assigned generally cost of royalties to management of our IP portfolio, but when something like this comes in generally there is very little costs associated with it.
Erik Schneider – UBS
Is it essentially 100% gross profit?
David Teitel
Essentially so, yes.
Erik Schneider – UBS
Then future royalty payments on that, I guess $500,000 or $1 million a year will those flow through in other income or those be added to the license and royalty revenue in future years?
David Teitel
No, those that show up on that are royalty line.
Erik Schneider - UBS
Then, with all of the news on swine flu today, do you have any comment about the testing portfolio associated and applicability to swine flu test?
Ron Zwanziger
Well, my first comment is that I hope that none of our products will be needed at all, but we expect that we are in touch with the CDC and we will do our peace to make sure that what’s needed to help contain the epidemic is available, and then our products will obviously be available. We have inventory and we can turn on production at the moment noticed if it’s necessary, but let’s just hope none of this is necessary.
Operator
Your next question comes from Bruce Cranna - Leerink Swann.
Bruce Cranna - Leerink Swann
Good morning. Ron, I guess just thinking about physician office sales in general, is there any way we can or you can comment about net of what’s going on with flu season. I know you mentioned there has been weakness in this challenge, just trying to figure out can we tease out the flu part of it and get some sense as to, I guess for lack of a better term patient volumes or physician office visits, net of the flu noise in the quarter?
Ron Zwanziger
Well, I mean we’ve given all the different growth numbers. I think probably most important thing is what’s going on; you’re essentially asking what’s going. We recently did an in-house survey to see what’s going on and it’s hard to say that we’re seeing deterioration beyond what’s happened before. That’s why we made the comment earlier that we haven’t seen any changes, any additional so the negative factors affecting our business beyond the factor that there has been this reduction. There is no sense that it’s accelerating in other words there is increasing absence of doctor’s visit, but there has been this reduction so far.
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