June 21 Conference Call Transcript (Part 1)
DARBY MACFARLANE
Good afternoon everyone and thank you for joining us today. We have a lot of people with us and for those of you whom I have not spoken to before, let me introduce myself. I am Darby Macfarlane, the CEO of CCSI and for all of you whom I have gotten to know so well over the past years, Hello. Congratulations to us all, and thank so many of you for being such loyal supporters of the Company through the long and arduous process we've been through in launching our TLc-BiliTest™ System with a premier marketing and distribution partner. This is an important milestone for our Company, and the main reason for this conference call with the investor community.
Before I launch into the content of our discussion on the Company, I would like to address an investor relations aspect of our Company and inform you of what I consider to be another small milestone for the Company in that area. We are in the process of setting up a website for CCSI in order to keep you updated and more readily informed. Most of you know Jen Marlar, Sheila Kempf and myself have been personally handling all of our investor relations up to now but as we receive hundreds of investor phone calls weekly, (and Sheila and I will be unable to continue this procedure), it is clear we will need to upgrade our information services. We hope this will be helpful and I will keep you informed as to our progress in this regard.
Also with us today is the Company's current SEC counsel, Jeffrey LeGueux from Patterson, Belknap, Webb & Tyler in New York and at counsel's request, I need to make the following usual formal statement…………
But now to get on with more exciting news for our Company. This will be a lengthy speech as we have much to cover after so long. At the risk of repetition for many of you who have heard this before, but as we have so many new participants on our call today, I have been asked by many to give a brief introduction of the company to those of you who are first hearing about CCSI and then I'll invite you to call our offices for Investor Packs for more details, or call Jennifer Marlar for any clarifications. Information on our new Distributor will be included in these packs.
Chromatics Color Sciences International is a color science technology Company and we are seeking to mass market consumer applications for our proprietary color science technology and instrumentation. From time to time we have been perceived as a cosmetics company, an equipment manufacturing company or more recently a medical company but in fact we are none of these. We are a Color Science technology company and we are dealing with a new industry, the Color Science Industry in which our patented technology and instrumentation has many potential commercial applications including the beauty industry for cosmetics, hair color and custom blended foundation makeup, the dental industry for matching the exact color of teeth, caps, bonding and dentures for both dentist's offices and dental laboratories which I will discuss in more detail later.
In this regard, we have worked for 10 years to achieve the miniaturization of an inexpensive color measurement instrument (an LED device) and now anticipate production of this instrument within the next 8 months.
Other markets exist for detection of soil and grain contamination, such as for oil and gas spills, the printing industry, photography including cross medium color matching, and broader consumer applications we are working on where a consumer has a pocket size color computer like a calculator they can take shopping and use to flash on a shirt or dress to select correctly coordinated colors for their wardrobe, or the consumer can us it for interior design purposes to match paint to carpet, towels to sheets, etc. The list for commercial markets goes on and on, but the market we are discussing today is an application of the Company's technology and instrumentation in the medical industry.
The Company has identified what we call “chromogenic diseases”. While technically this is not a defined medical term, it describes diseases which currently are or the Company believes can be diagnosed or monitored by the coloration of human skin, tissue or fluids. There are many of these diseases such as anemia, hepatitis, tuberculosis, many skin diseases and disorders, forms of malignancy evaluated through biopsy tissue and different fluid laboratory analyses. To develop monitoring instruments for these medical applications it would require extensive clinical trials to obtain separate FDA clearances for each monitoring system. We focused initially on one particular disease which was probably influenced by a personal experience – which is that I had a premature child and in my child's infancy lived through the nightmare of this particular disease which is called newborn bilirubinemia or infant jaundice.
This condition affects over half of all babies born and nearly 100% of all premature children. Every infant born is monitored for it. It is a liver-related disease and fundamentally occurs in varying degrees within the first two weeks of a child's life when the liver is trying to work on its own independent of the mother. If the liver doesn't take over quickly enough and the disease is not caught in time and then treated by phototherapy or exchange transfusion, the results can be varying degrees of nervous system damage/or brain damage called Kernicterus. If left untreated, it is ultimately fatal.
Scientists learned a long time ago that the disease causes a yellow staining of any affected cells. If an autopsy is performed on a child who dies from kernicterus the brain cells will be stained a yellow color. The medical community also very early on observed that the disease affected the yellow color of the baby's skin. However, the only method accurate enough to monitor it was a blood test, often taken many times a day, where a laboratory spectrophotometer would measure the stained color of the blood serum to determine in mg/dl the amount of bilirubin present.
Now with Chromatics' technology, it is possible for the health care professional to decrease blood tests and monitor the disease by using a light sensor which measures the skin of the baby's body and the incremental yellow content within the skin, painlessly and noninvasively. This is a tremendous advantage as the extensive blood drawing from infants is a truly savage procedure. Many newborns, especially preemies, don't have fully formed veins, so to obtain the blood samples the doctors or nurses have to incise and squeeze the blood out which is a bad process, leaving scars and moreover is labor intensive, especially when this procedure occurs in a good size nursery with an average of 30 babies needing multiple tests per day.
We went through all phases of FDA clinical trials and received FDA clearance for commercial marketing and more recently received ISO 9000 certification as a company and have authorization to CE Mark our products which is required for foreign distribution. This means we are now allowed to commercially market our Colormate TLc-BiliTest™ System for noninvasive monitoring of bilirubin infant jaundice to the medical community in the United States and Internationally. A peer reviewed journal article published in Pediatrics on clinical trials is available on request from our IR Department (also here Message 5703900 ). The published study of 900 infants of all gestational ages and races showed a 95% correlation to invasive blood serum tests and more recent studies conducted in 75 hospitals continued with the same high correlation.
I'm sure you all want to know what all this means. I think the most important thing it means is that all these babies born will benefit. They won't have to go through so much pain which is important by survey to the vast majority of parents and caregivers
The second most important meaning is that there is now what we believe a hallmark for establishing the credibility of color science in the eyes of the public. If Color Science technology can be used by the health care professionals to non-invasively and painlessly monitor a life and death threatening disease for newborn infants, then I believe this goes a long way toward bringing up public acceptance of Color Science as a leading edge technology for mass market consumer applications. Obviously that really helps our Company as we have spent many years developing color science technology for many mass market applications. So launching this pain free monitoring system for infants helps the Company in marketing its other applications as well.
It additionally helps the company in its R & D efforts for monitoring the many other chromogenic diseases I mentioned earlier as much of the same technology is utilized, such as in dermatology. The Company has recently completed phase 1 of clinical trials for monitoring the effect of phototherapy treatment for a number of skin diseases, including T-Cell lymphoma and psoriasis with promising results and we will be working on these and other medical applications for our technology.
The third obvious benefit is it is newsworthy. Everyone is interested in babies and new medical technology, Chromatics has been receiving very favorable press as the System is released into the marketplace and with our new distributor speeding up this process, we can begin to bring our story to the world, as it so well deserves to be told.
And the fourth benefit is that the Company now can expand operations and begin generating revenue.
(continued) |
