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Stephen is the President of Kilmer Lucas Inc. ( and BioTuesday Publishing Corporation ( Prior to founding both firms, he was the VP of Investor & Public Affairs for OccuLogix Inc., a Boston-based medical device company. Before managing OccuLogix’... More
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  • Tekmira partner starts human trials of ALN-TTR01

    Alnylam Pharmaceuticals (NASDAQ:ALNY), one of Tekmira Pharmaceuticals (TSX:TKM) partners, has initiated dosing in a Phase 1 clinical trial of its ALN-TTR01 product candidate in patients with transthyretin-mediated amyloidosis (ATTR), a disease that results in damage to the peripheral nerves and heart.

    ALN-TTR01 is a RNA-interference therapeutic that uses Tekmira’s lipid nanoparticle delivery technology, SNALP (stable nucleic acid-lipid particles). The placebo-controlled dose escalation study will be conducted in Portugal, Sweden, and the U.K., and is designed to enrol about 28 ATTR patients.

    The Phase 1 triggers a milestone payment to Tekmira. “We continue to support Alnylam in the advancement of their systemic product candidates, including ALN-TTR01, and provide drug product through an exclusive manufacturing agreement,” Tekmira CEO Dr. Mark J. Murray said in a statement.

    Disclosure: No position
    Jul 07 10:20 AM | Link | Comment!
  • Medical Lab division to drive Warnex

    After obtaining rights to a colorectal cancer blood screening test in May, Warnex (TSX:WNX) is looking for additional products to license into its Medical Laboratories division as it seeks to become the “unique provider” of specialized diagnostic tests in Canada.

    “Our other divisions are coming out of the recession okay, and we getting busy.  But the real excitement going forward is in the medical division,” CEO Mark Busgang says in an exclusive interview with  “These diagnostic tests are having, and will have, a major impact on the division.”

    About 18 months ago, Warnex began selling DiagnoCure’s (TSX:CUR) PCA3 molecular test for prostate cancer in Canada.  “Sales are picking up,” he says, pointing out that the company has two full-time sales reps calling on some 600 urologists across the country.  “We’re the only ones selling it in Canada.  We perform the test here in Montréal and send the results back to the urologist.”

    The diagnostic for colorectal cancer was licensed from Germany’s Epigenomics (FPS:ECX) and includes the biomarker Septin9, making Warnex the first laboratory to offer Septin9 testing in Canada.  The test, which is already available in the U.S. and Europe, is “highly accurate and very specific,” he says.

    “In many cases, it will eliminate the need for colonoscopy or at least add that to the weapons of choice for doctors. It’s ideal for people who have no history of colon cancer in the family and have none of the signs of being a high risk case for colon cancer.”

    Mr. Busgang figures the colorectal blood test has the potential to generate hundreds of millions of dollars of revenue in Canada.  “So, even if we had 1% of the potential market, we would do a lot more business than we did in the division as a whole last year.”  The company expects to launch the test in the fall and, by the end of 2011, should see revenue ramp-up, he predicts.

    The sales force in the medical group consists of six people and a general manager and should grow by two more sales reps with the launch of the colorectal test.  “We have no R&D costs, try to avoid paying an upfront license fee and just pay royalties on the license as we generate sales.  So a big investment isn’t required, and the strategy is working very well.”

    Among other things, the Medical Laboratories division conducts biochemistry tests to detect Down syndrome in the fetus and testosterone levels in men; microbiology testing for the H1N1 virus and herpes; paternity and forensic testing; molecular diagnostics to investigate disease states; and pharmacogenetic work to determine an individual’s reaction to a drug, thereby opening the door to personalized medicine.

    “If you look down the road—whether it’s five or 20 years—I believe that your DNA will be encoded on your Medicare card, so when you go into a pharmacy and swipe your card in a reader, your genetic makeup will determine which drugs are effective or ineffective,” he says.  “I’ve heard a stat that in 40% of cases, Lipitor isn’t effective because of your genetic makeup. Imagine if you identify that gene early on, use a different cholesterol drug and save the health care systems billions of dollars.”

    Warnex’s analytical division does outsourced quality control testing, stability work and validations for pharma and natural health food companies.  The group is also starting to offer tests for pesticides.  The bioanalytical division does the chemistry part of a clinical trial.

    Mr. Busgang says the opportunity in the analytical group lies outside of Québec, because Warnex has about 75% of the market share for outsourced testing in the province, making further market share growth difficult.

    “The expansion areas we’re working on are Ontario, with the hiring of a new sales rep, and the Northeast U.S., including New York, New Jersey and as far south as the Raleigh, North Carolina research triangle, where we’re actively looking for a sales rep for that area.”

    Last year, the analytical division generated about $11 million in revenue, almost all of which was in Québec.  “So, you have at least the same size market, if not bigger, in Ontario, and in the U.S., it has to be at least 10 times that,” Mr. Busgang says.  “That’s why these areas represent significant growth opportunities for the business. If anything, we would consider the acquisition of a lab in Ontario or in the U.S.”

    In the bioanalytical group, he says the opportunity is India, where Warnex has been active for a number of years, averaging about $1.5 million in revenue or 15% to 20% of the top line for the division.

    “I was in India with Jean Charest’s trade mission last February and had the opportunity to meet with some of our customers and other companies we’ve never done business with. My visit raised the profile of Warnex and opened my eyes to the opportunities with these companies.”

    As a result, he says Warnex has hired a sales rep in India and has been active quoting business.  “Over the next three years, we should double or triple our revenues from India,” he predicts.

    For the bioanalytical division as a whole, he says clinical testing is returning to more normalized levels this year after a slowdown in the middle two quarters of 2009.  “Our bioanalytical business is fully booked into October of this year, and we’re very positive that the recession is over in the division.”

    Warnex’s bioanalytical group has traditionally worked with small molecules drug candidates using mass spectrometry but is now expanding into immunoassays using antibodies for large molecule compounds, he points out.

    On the financial side, Mr. Busgang says his objectives this year are to attain profitability, by increasing revenues, managing costs and improving productivity, and to restructure the balance sheet.

    “We’re going to do our damnedest to get into the black.  Last year, we missed by $164,000.  It wasn’t a bad year given the recession.  But this year, our goal is to get into the black and stay there going forward.”  Revenue last year was $23.6 million, and Mr. Busgang suggests that on revenue of $25 million, Warnex should be profitable.

    The company is carrying about $6 million of debentures on its balance sheet, which become repayable in mid-2011. “My intention is to restructure these debentures so that we don’t need to come up with a big chunk of cash in 12 months and have the restructuring in place in 2010.  An ideal scenario would be to replace it with lower cost debt and use some of the differential in interest costs to repay capital on an ongoing basis,” he suggests.

    Not surprisingly, Mr. Busgang believes that Warnex is significantly undervalued, with a market capitalization of around $6 million. “The breakup value of the company, if you were to sell off each of the divisions, is three to four times our market cap,” he says. “And if you look at the fundamentals of our company and take a multiple of EBITDA of the divisions, for example, you come up with a market value of anywhere from $25 million to $35 million.  And the enterprise value is $12 to $13 million.  So from those perspectives, there is a serious undervaluation.”


    Disclosure: No positions
    Jul 06 7:48 AM | Link | Comment!
  • TearLab set to join Russell Microcap Index

    TearLab (NASDAQ:TEAR; TSX:TLB) is set to join the Russell Microcap Index when Russell Investments updates its comprehensive set of U.S. and global equity indexes after the close of trading this Friday, according to a preliminary list of additions posted recently on the Russell website.

    Membership in the Russell Microcap Index, which remains in place for one year, means automatic inclusion in the appropriate growth and value style indexes.  Russell determines membership for its equity indexes primarily by objective, market-capitalization rankings and style attributes, and they are reconstituted annually.  The Russell indexes are widely used by investment managers and institutional investors for index funds and as benchmarks for passive and active investment strategies.

    Various peer-reviewed journals have described TearLab’s point-of-care osmolarity test as the technology of choice to aid in the diagnosis of dry eye disease.

    Disclosure: No positions
    Jun 23 10:57 AM | Link | Comment!
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