F4Q07 (Qtr End 7/31/07) Earnings Call
December 3, 2007 10:30 am ET
Dr. James Smith - Vice President of Corporate Affairs
Mr. Hermes Chan - President & CEO
Mr. Steve Cummings – CFO
Good morning ladies and gentlemen, thank you for standing by. Welcome to the MedMira year end 2007 conference call. At this time all participants are in a listen-only mode. Following the presentation we will conduct a question-and-answer session. Instructions will be provided at that time if you have a question. (Operator Instructions) I would like to remind everyone this conference call is being recorded on Monday December 3rd 2007 at 10:30 am Eastern time. I will now turn the conference over to Dr James Smith, VP of Corporate Affairs. Please go ahead.
Dr James Smith
Thank you, operator, and good morning ladies and gentlemen. Welcome to the end of year 2007 conference call for analysts. My name is Jim Smith and I am the Vice President of Corporate Affairs with our company. Joining me on the call this morning are Mr. Hermes Chan, President and CEO and Mr. Steve Cummings, interim CFO. Each of these gentlemen will be available to answer your questions later on in the call.
Our call this morning will include a detailed statement by Mr. Chan followed by a brief statement by Mr. Cummings and then a question-and-answer period immediately following. Financial comments made during the call are taken from the year-end results for 2007. To ensure that we are all referring to the same document, you each should have received a copy of our press release announcing our year-end results in 2007 and management discussion and analysis of the results for the 12 month period ended July 31st 2007. If you did not receive these documents they are available on our website at www.medmira.com or on sedar.com.
The purpose of our call this morning is to allow analysts an opportunity to ask questions of company management regarding our 2007 year-end results and to learn about the current and near-future strategic plan for the coming year. Any shareholders or members of the press who may be listening and who have questions they wish to ask the company can contact me following the call. Any member of the press who wish to quote anyone on the call other than company management should seek the approval of the individual before quoting them.
During this conference call, management may make forward-looking statements which involve risk and uncertainties and reflect the company’s current expectation regarding future events. Actual events could materially differ from those projected and depend on a number of factors including, but not limited to, changing market conditions, successful and timely completion of clinical studies, uncertainties related to the regulatory approval process, establishment of corporate alliances and other risks detailed from time to time in the company’s quarterly filings.
I will now turn the call over to Mr. Hermes Chan, President and Chief Executive Officer of MedMira, Mr. Chan.
Thank you Dr Smith. Ladies and Gentlemen, thank you for joining us on the call today. It is an exciting time here at MedMira and I’m pleased that you have joined us today to learn more about our company and initiatives we have underway.
Our update today is very much about looking forward. We released our 2007 financials last week and our interim CFO Steve Cummings will make brief comments about our financial prospects and provide our applications in regards to our fiscal year 2007 in a short while.
It was very much a year of perseverance and continual pursuit of [step up] in the diagnostic world for MedMira. However, we did overcome many financial and market challenges capitalizing on the opportunities and we have made progress. Constantly reassessing and examining the path that we are on enables MedMira to stay ahead of the herd. With this approach in mind, we are more focused than ever on our core expertise as a leading developer of quality diagnostics and our commitments to innovations.
We are actively pursuing strategic alliance with preferred partners and cooperators in order to bring leading edge diagnostics to the marketplace. As we learned more about the [compact] emerging market with a growing demand for quality diagnostics we know that in order to succeed, we must find the path of least resistance. A streamlined approach is necessary. We are working with strategic partners to bring the best that each of us has to offer in order to ensure that MedMira products are first in the marketplace.
We have already found success in India and Russia with this model. In India, which is quickly emerging as a critical global market, we are working with a partner that knows this market intimately and has proven success in our particular sectors. Relationships such as this one enable MedMira to succeed in opening markets that were once impenetrable because of pricing wars and in-country restrictions. In addition to strategic partnerships that can help us build market presence in key global markets we are also seeking partnerships for out-licensing of (operator interruption).
What MedMira does best is develop quality diagnostics. We already bring this expertise to bear in our own line of rapid test and the bio-sensor technology we are developing under Maple Biosciences. MedMira is now ready to share our expertise and our unique testing platforms to develop diagnostics for and with other quality manufacturers.
We are steadfast in our belief that we have the best diagnostics platforms in the world today. We have proven this time and time again meeting the world’s highest quality standards and regular approvals process. MedMira achievements are now the first in the diagnostic world this past year with the launch of our new multiple rapid test technology. The potential for development of tests utilizing this testing platform is endless.
Our plan in the coming months is to tap into the opportunities to collaborate with other diagnostics, pharmaceuticals and healthcare providers to bring the market new and advanced tests. MedMira is building on the fundamentals with which we have established within the company since 1994.
Fiscal year 2008 is a year for us to aggressively pursue the opportunities that we have on hand. We have expanded our sales and marketing front by establishing the new business development department which will be led by an executive with over 20 years experience in the diagnostic industry. We are at the final stage of the recruitment effort and expect to make our announcement shortly.
The new team will work very closely with our partners within the focused market such as India, Russia, Europe, Latin America and US expanding the current [part] of market shares as well as taking steps to bring in our new line of multiple products at the earliest possible timeframe.
It is a year which we will put key focus on expanding our short and long term product development plans utilizing our newest Multiplo platforms for HIV and Hepatitis C, Herpes and Syphilis and other sexually transmitted diseases. Our patented three minute rapid flow-through technologies can be easily utilized to produce a rapid test for emerging cardiac markers for early detections of potential heart diseases.
Many other diagnostic companies are restricted to develop tests for this lucrative market, due to the patent infringement on the others rapid test platforms. MedMira is the only company that can operate this market sector freely utilizing our own patented rapid flow-through technology.
Now I would like to make some brief comments about the market values for our recently patented rapid flow-through technology.
According to Frost and Sullivan’s estimate, the 2007 in-vitro diagnostic market is being valued at about $30 billion and by 2011, such a market will increase up to $43 billion. 75% of the industry revenue is actually coming from the North Americas, West Europe, as well as Japan. The point of care market where our tests will be used comprise over 25% of the total IVD market. Assuming we could capture 10% of the point of care and over the counter market, even with a 50% discount, our IV value can be valued at close to $1 billion for the first five years of our patent terms based on the Frost and Sullivan’s estimate.
The recent so called hockey stick event on our stock performance can be analyzed in two ways. Investors who have seen the great opportunities for our products to be distributed to more than 100 different developing countries as it has now been approved by the US AIDS initiatives.
But more importantly, I believe that many sophisticated investors have valued our patented technology patents similar to what I have commented earlier and acknowledge the potential list of unlimited rapid diagnostic products which can be developed.
Further more, MedMira, as a technology power house, is not just about rapid diagnostic tests. Earlier this year, the Canadian Federal Agency granted $3 million in funding for the Bio-sensor development through our wholly owned subsidiaries Maple Biosciences.
The overall bio-sensor technology that we own has a strong IP patent that currently three patents granted in Europe and North Americas as well as other patents pending. The development of these technologies is in the field of molecular diagnostics with focus on personal matters and area. We are excited about the current developments and expect various out-licensing as well as cooperation opportunities coming our way in the near future.
I hope that you will continue to follow MedMira’s progress over the coming months. Our focus continues to be clear and remains on growing this company’s and increasing shareholders’ value.
Thank you once again for your time today. I will now turn over the call to my interim CFO Steven Cummings for his comment. Steve.
Thank you, Hermes. Good morning ladies and gentlemen, I will now take a few minutes and make some brief comments about our 2007 year-end results, which ended July 31, 2007.
As Hermes indicated earlier, fiscal year ’07 was the year for MedMira to refocus on our global business initiatives and reposition the company to meet the upcoming challenges and opportunities that we are expecting this current fiscal year. These preparations were initiated during the most difficult period in the history of our company. Despite the financial challenges that the company faced in the past year, management did not let up, but continued to persevere and make progress on a number of fronts.
We entered new key markets such as India and Russia. We executed an out-licensing agreement and we initiated a new OEM partnership. We focused on select high volume, low margin markets such as India and Africa. We also introduced niche products that will result in high margins and significant market share within markets such as the Russian Federation and former CIS states.
The anticipated growth in the coming quarters will allow MedMira to further capture market share through the introduction of a new line of Multiplo products in the lucrative US and European markets.
The financial result for fiscal year 2007 was no doubt disappointing as marketing plans for international sales have been slower than anticipated. Restructuring of the China SDFA has virtually stopped our product sales in china and as a result has wasted the progress we have made over the past couple of years.
Given that china is still one of the largest markets with great potential growth, we chose to partner with an experienced health care company in Hong Kong based on a profit sharing model. Our partner will further development market for our patented Multiplo platform with a new line of products, adapting and reacting to any market changes far more effectively than we can do from the other side of the globe.
During the last quarter of the fiscal year, our greatest challenge was to further reduce our debts. I am pleased with the results as we have made significant reduction in overall debt, therefore significantly reducing our interest costs. We have further reduced operating expenses and sought various ways to cut costs without compromising on our product quality and manufacturing efficiency.
As previously stated by our CEO, this analyst call is about our future performance. I will provide any clarification of our past year end financial results during the question and answer section. We anticipate strong growth on the revenue side based on various approvals we have obtained in recent months. Approval from the India regulator with 100% accuracy of our rapid HIV test resulting in an initial 1 million test sales, shipment will start before the end of the year. Approval from the Russian Ministry of Health for our new Multiplo HIV, HBV, HCV rapid test, initial shipment has been delivered. MedMira is the only company in the world that has the technology to offer this multiple testing product.
Approval from the US AIDS initiative with product sales opportunity from over 100 countries, countries include India and other developing countries in Africa, can now order our Reveal rapid HIV test through authorized Crown agent located in England.
I would also like to take this opportunity to once again congratulate our CEO Hermes Chan for his recent winning of the prestigious innovation award in the field of Bioscience from Economist magazine. Such an international recognition further increases the true value of our patented rapid flow-through technology, one of two rapid diagnostic technologies in the world.
I would like to thank you call for your continued interest in MedMira and I will now turn over the call to the operator to begin the question and answer period.
Thank you. Ladies and gentleman we will now conduct the question and answer session. (Operator instructions). One moment please for your first question.
Dr. Smith there are no questions at this time, please continue.
Dr James Smith
Thank you operator. Once again ladies and gentlemen, thank you for joining us this morning for this conference call. If you have any further questions of any member of the management team you can contact me at 902-450-1588 or by email at firstname.lastname@example.org. Thank you and good day.
Ladies and gentlemen, this concludes the conference call today. Thank you for participating, please disconnect your line.