AMDL: Red Chip Conference Presentation Transcript

TRANSCRIPT SPONSOR

AMDL, Inc. (ADL)
Red Chip Conference
February 12, 2007 3:15 pm ET

Executives

Gary Dreher - President & CEO

Presentation

Gary Dreher

I'd like to talk to you today about a company called AMDL. It was the first company to be listed on the American Stock Exchange after 9/11. And our focus is diagnostics treatment and diagnostics and other sorts of diseases. What you see here is -- you can see here -- anyone see that in the back -- that's a virtual tour of -- will be of our building in Tustin, California, our US headquarters.

All right. So that's Tustin, California, our corporate headquarters in the United States. This is Shenzhen, China, a beautiful place and its corporate headquarters there. We're in the tallest building in Shenzhen.

We have two factories within China proper, PRC. One of them is in Northern China, a place called Jilin, and the other one is in place called Jangxi. These companies have been around for a while. We acquired them in September. They are wholly-owned. And they produce somewhere around 135 products and licenses for many more products, which we would get into.

It took about a year to get this deal done with the Chinese, but it took us five years to decide we're really going to do it. These just happen to be the right people. We feel comfortable with then, because we've worked with them and we know them and we know we can work well together.

This again is Tustin, California. We're doing a little R&D there -- R&D/QC. And this would be for our DR-70 blood test. It's very simple to have the test done. Obviously, you wouldn't see all this as a patient. You would go into your local doctor. You'd go into a local clinic. They draw your blood, and that's all you know about it, but this is kind of what goes on behind the scenes.

This is Jilin again, one of the factories. Everything is China as of two years ago had to be GMP approved. And so about half of the pharmaceutical companies in China went out of business or have to go out of business. We're all GMP approved. It took a lot of money to get there.

Our next step would be to be SFDA approved -- State FDA meaning China FDA approved. Our next step will be to be US FDA approved. That way we can make US drugs up to US standards in our factories with their labor cost. So that would be significant, obviously, and will be.

Everything over there -- pretty much everything is stainless. You know, the best water filtration money can buy. We do reinject, we do injectables, we do pills, we do capsules, and we've also started doing our consumer products very shortly like vitamins and that type of thing.

The Chinese are actually getting to the point now where it's not just "am I going to die" or "does it fit me when I'm sick." But they're going -- they want to stay better. They want wellness. And they can afford to have the wellness, because they have money now. As you all know here, the Chinese economy is going actually crazy. There was the largest IPO ever that was done in China with China Bank about three or four months ago.

A big part of doing business in the China is getting together with the local provincial governments and the national government. They can help you get things done or they can take it so you don't get things done. The people we deal with over there are pretty savvy politically. And they have really shown the ability to get drugs approved just in the short period of time that we've been their partners.

Can everybody hear me okay? Okay. Good.

China has made a big commitment as far as their GDP. They want to be number one in biotech. They've taken their commitment in GDP from -- I believe, it was 1.3 to 2.5% just recently.

This is the other factory. That's pretty much it. It's a real growing concern. It's profitable, and they've got somewhere around 130 products online. And they're due to add, we are due to add, and they are adding products that we'll talk about in this presentation.

Okay. As I said before, we're in Tustin, California. The corporate office for Jade Pharmaceuticals is in Shenzhen, China. We're on the American Stock Exchange. Our symbol is ADL.

Why don't we skip to the next slide? Or do I have that control? I have that control. Okay. This one? Okay. Thanks.

Okay. We are uniquely positioned internationally as a biopharma company. One of the first to really get into China, and getting to China early is very important, because the Chinese government is only going to allow us so many pharmaceutical companies to get into so many products. Otherwise it would just be -- it would be crazy.

We have profitable operations in China, as I mentioned before. We have a strong and diverse management team, which we'll get into in a little bit and a Board of Directors. We have known the regulatory path for getting existing products approved. And we have significant new products developed and actually being developed. And we are undervalued according to most comparisons -- most comparatives, I should say.

And to give you an idea of the management team, Dr. Bill Thomson is a surgeon in Orange County -- a cancer surgeon -- been with the Company for about 14, 15 years. I have been with the Company for seven years. I have been with Warner Lambert, Mead Johnson, Bristol-Myers.

Mr. Jia is an integral part of the Chinese group. He knows Asia very, very well. He was with one of the biggest import-export companies within China. Douglas MacLellan is on our board. He's the Audit Committee Chairman. He has been to China -- he's not sure exactly, somewhere between 200 and 250 times. So he knows the lay of the land pretty well and he understands how they work and how to get things done. He's a real big help.

Ed Arquilla is better known to us, as we call him Quincy. He's an anatomical and a clinical pathologist, meaning that he not only gets involved in tissue sections but he also gets involved in slides or rather chemistries. In other words, when you go in and have a chemistry panel done and you physician can't figure out why it doesn't fit, this is the guy that they take the results to and he figures out what's really going on.

He is also the guy that invented the pregnancy tests that's used now -- the one that's used in homes. It's actually the same one that's used in hospitals. It's like seven days after conception rather than having to wait, you know, 30 days. That's his technology.

Akio Ariura is a new addition to AMDL. He's an SCU grad, and he is the Chief Financial Officer. Andrea Small-Howard is a protein chemist, probably one of the best in the world. We hired her just recently to help take our DR-70 blood test for cancer and to characterize what makes that test work for the FDA.

Mr. Zheng is President or Director, I should say, of Jade Pharmaceuticals in China. And Mr. Shaw is an individual who makes all our staff really talented. He is the kind of guy that can have 20 or 30 different kinds of pies going on at the same time and dark burn any of them.

Okay. So again, Jade and AMDL is diagnostics for life and products for health. And our mission is to build a dynamic healthcare enterprise with global reach and significant earnings -- which I mentioned, they already have significant earnings, and they're going to get a whole lot better.

We're going to accomplish this goal by combining AMDL's historic R&D in cancer, because that's our forte. We gave them -- what they really have is a bunch of generic drugs, which are good, but they don't have the products that can really put them on the nap -- the homerun products that we have, which are unique and patented.

Okay. To give you an idea like some of these pharmaceuticals that we're talking about. Zofran is a pretty well known drug. It's $2 billion worldwide market drug. That's a drug that's used for people who are in chemotherapy and radiation. When they have nausea and, of course, if they have nausea and you got to take the patient off that, chemotherapy and radiation, and the cancer starts back up.

So this is a very important drug. Drugs -- the drug in China, we figured, initially would be worth about $5 million to $7 million. So a nice addition to their product line, but worldwide, this product is worth $2 billion.

Let's see. Some of these other drugs, you might recognize. Let's see. We'll switch over to the bottom new six, because these are the exciting ones. The others are ones that are actually paying the bills now. Although, in the last year, they started emphasizing the drugs more and profits came up considerably.

TRANSCRIPT SPONSOR RedChip Companies, Inc., is a well-established source of independent research and information on the small-cap market. Dedicated to "discovering tomorrow's blue chips today(tm)," its analysts seek out up-and-coming and undiscovered small-cap companies before they show up on Wall Street's radar screen. Through RedChip Review(tm), the Company's flagship publication, analysts provide a unique breadth of coverage and depth of research on relatively unknown small-cap companies. RedChip Visibility(tm) provides publicly-traded small-cap companies an opportunity to present their business to institutional and individual investors by holding investor conferences across the country. For an investor kit click here or call 1-800-REDCHIP. Read all Red Chip Conference presentation transcripts here. To sponsor an investor conference presentation transcript please contact us.

As I said, we have quite a few new drugs. Actually, there are six on this list. And yesterday, we added another one. So -- and that's in our press release that we did this morning. So if anybody bought stock in this company today, you made money today. You made about $0.40. You made about, let's see, what about 15%.

We have erythromycin drugs, which is Roxithromycin. Two of the biggest drugs are Lomefloxacin and Levofloxacin. These are basically broad-spectrum antibiotics. The one that we added today and we did the press release on and we said we're going to announce it here, something called Docetaxel, and that basically is used for many types of cancers. It's used for breast cancer and it's used for lung cancer, very broad-spectrum that the value of that worldwide is $2 billion. And in China, it's estimated to be around $200 million.

Okay. The benefits to AMDL, Jade is the access to world's fastest growing pharmaceutical and consumer market. That’s a new path for US manufactured goods as I talked about earlier mainly because of the cost differential, the wages.

It's a platform to license North American drugs and to manufacture these in China, possibility to build $100 million annual sales. We feel that to be very, very attainable, very conservative projections.

And the big thing is to expand AMDL’s, DR-70 and CIT market, DR-70, again, being the blood test and the other factor I haven't talked to you about, yet, but we'll in just a second here. And that's a technology for actually treating cancer or preventing cancer.

China has the fastest growing economy in the world. And since you have the GDP growth as projected at 8% to 10% -- actually I was watching Chinese news here today, and it's actually 12% now. In 2003, the Chinese pharmaceutical market was approximately $46.8 billion and it’s growing by 20% to 24%. Those numbers still pretty much hold through.

There are 168 cities in China with over 1 million people. That was news to me. Yes. What is -- one -- somewhere between 1.2 and 1.4 billion people, but actually it's more than that, because they just can't count them all. Given the whole story, that’s uncountable.

There are approximately 400 million people, that's a surprise in China, with health care and that's growing by 28% a year. So it’s a growing up quite a lot. But by health care, I don't mean just stay health care. I mean insurance type health care.

Okay. I will tell you about the DR-70 test. DR-70 test is a very simple test. You have it done when you go to get your blood drawn for a physical, especially in Europe, in Asia and anywhere else, but the United States, because anywhere else than the United States you can have this test done as a screen.

And in the United States they want approvals for one type of cancer at a time, that is we have to get it for colon cancer, and then we have to move on to lung cancer. And so they make us jump through more and smaller hoops. But in other parts of the world, basically what it tells you is that you have cancer and that the physician needs to go in and check where it is.

Everybody has their cholesterol done once a year probably. This is a same type of thing. You have it done. If it starts to go up, the physician looks for it, finds it, treats it and everything is good. Matter of fact, when you're treating a patient with one of these types of cancer, this is a good tool because if it continuous to go up, it tells you that whatever medication or treatment the physician has you on isn't working.

Okay. The CIT technology I was talking about is all Combination Immune Therapy or genetherapy. Way it works is that you inject one of these genes into the patient's tumor, the body then recognizes it as a foreign body. The second gene goes in and builds the immune system. And so those genes go in the white cells and the T-cells, go in and attack the foreign body.

Now the guy that designed this technology actually feels that what you can do is you could take, let's say, a lady has a family history of breast cancer. Rather than wait till she gets a breast cancer, you could actually take breast cancer cells from another breast cancer patient, make a cocktail of our technology, put them together. And so, if anytime during that patient's life she develops breast cancer cells, they're immediately eradicated. It's a great step forward.

We have three partners in China that -- we have a military and we have two pharmaceutical companies that want to partner up on this technology. China is the only nation in the world that has genetherapy. As I said, they want to be known for biotech, they're putting money into it. They're being very aggressive and they're going to get there first on many different things.

On the CIT. Actually getting closer to home here, at Johns Hopkins University they did a study just recently, pancreatic cancer. I don't know if anybody knows pancreatic cancer how bad it is, very painful and moves very quickly, usually, the patient only last six to nine months.

When they gave in this technology, the patients were lasting 30% of more lasting more than a year, and a few of those patients were actually lasting 30 months. What you really need to do in the clinical is to figure out how big a dose, and how often to give the dose? That’s the secret to the clinical trials and beginning that they approved. So we're real close on this.

As I mentioned, we have several partners looking to be -- to join us with, we may have more than one, for this Combination Immunogene Therapy. Because it’s -- the market for gene therapy is been estimated to be like well for cancer treatment, somewhere around $55 billion today. And to give you the exact numbers, and that we're give in our time.

Okay. Good. Cancer diagnostic and treatment is currently a $40 billion industry and it will arise to $72 billion by year 2001. And those goals to gain a small portion of this market initially.

The market for CIT globally is growing very fast and therapeutics is currently around $30 billion, actually that was in '05. By the year 2011 it will be $60 billions, so you can see it's growing at a fantastic rate. The market for the blood test and cancer diagnostic is $10 billions and it will be growing to like $12 billion by 20% growth. This is just comparatives to other companies in the same space, and you can see that they all do pretty well financially.

Okay. With that, I'd be happy to answer any questions. And we'll have a break as well.

Unidentified Company Speaker

Yes. I would just ask if you do have questions hold those and either see Gary at the booth or in the breakout session. He'll be there for an hour

Gary Dreher

Good. Well, with that I'll say thank you very much.

Unidentified Company Speaker

Thanks so much, Gary.

Gary Dreher

We'll meet.

TRANSCRIPT SPONSOR RedChip Companies, Inc., is a well-established source of independent research and information on the small-cap market. Dedicated to "discovering tomorrow's blue chips today(tm)," its analysts seek out up-and-coming and undiscovered small-cap companies before they show up on Wall Street's radar screen. Through RedChip Review(tm), the Company's flagship publication, analysts provide a unique breadth of coverage and depth of research on relatively unknown small-cap companies. RedChip Visibility(tm) provides publicly-traded small-cap companies an opportunity to present their business to institutional and individual investors by holding investor conferences across the country. For an investor kit click here or call 1-800-REDCHIP. Read all Red Chip Conference presentation transcripts here. To sponsor an investor conference presentation transcript please contact us.

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