I have been accumulating Biotech Holdings (BIO:ASE) stock since spring. This Vancouver, B.C. company has a new drug (Diab II) for Type II Diabetes sufferers. The company expects that patients who start Diab II treatment will remain on the drug for the rest of their lives!
BIO received very high level co-operation from the Chinese government to complete clinical trials in China (2 year trial, 60 doctors participated, 370 patients completed trial, controlled diet and blood tested twice a week at 30,60,90, and 120 minute intervals after glucose loading.)
Equivalent trials in the U.S. would cost $40-60 million. Diab II has received New Drug Approval number in China. The first purchase order has been received.
Effective market of 29 million (!) in China alone (Type II sufferers living in towns and cities).
"Diab II increases intra-cellular insulin allowing the uptake and metabolization of glucose in a more normal fashion."
Multi-national drug companies are kicking BIO's tires.
Application has been made to the S.E.C. for Form 20F registration of the stock in the U.S.; approval will allow listing on OTC Bulletin Board (apparently market makers in place); NASDAQ Small Cap Listing to be applied for but US$3.00 stock price necessary - currently under CAN$2.00).
Completing supplementary trials in Carribean, marketing in 1997. Next Latin America. Also Europe and U.S.licensing.
Projected EPS in 12-month period ending Oct 97 $.05 per share (revenues $7m), year 2 $1.40 ($125m)," based on very modest penetration of markets."
I've had many doubts about this story. Events haven't occurred as quickly as indicated since BIO became public (ignoring all the development efforts prior to becoming a public company), but for a small company to develop, test, and market a "world-class" drug is obviously a situation that needs very careful handling. If Biotech has
an effective drug, this is stunning. And it looks like they do.
Apart from holding BIO's stock, I have no connection with the company.
I haven't felt confident enough in the story to post this message until now.
BIO has a web page at "http;//www.biotechltd.com", giving the usual coporate info plus an explanation of the action of the drug. By itself it wouldn't convince a newcomer to buy the stock, but it's a good starting point.
Robin Peterson |
