Letter to Shareholders
> March 20, 2003
>
> Dear Shareholder,
>
> As we continue our transition from a research-based development company
> into a revenue-producing commercial entity with a product pipeline, I'd
> like to provide an overview of the Company's future prospects by
> top-lining significant recent achievements over the past several months
> that demonstrate substantive progress toward commercializing the RAMP
> System for clinical, biodefense and home testing applications.
>
> The business strategy can be summarized and prioritized as follows:
> 1. facilitate steady growth in biodefense sales with the
> following financial goals: over $2 million revenue in 2003, and positive
> cash flow on a monthly basis by the end of the year;
> 2. establish a global network of distributors and marketing
> partners for the RAMP cardiac application rolling out internationally
> throughout the year, while pursuing FDA clearance of all three cardiac
> markers by the end of 2003; and
> 3. facilitate the widespread adoption of RAMP through technology
> enhancements funded by our Global 500 partner for new market
> opportunities.
>
> As a result of widespread fear of bioterrorism reprisals resulting from
> the conflict in Iraq, and the validation from UN weapons inspectors'
> reliance on RAMP, the Company is experiencing unprecedented interest from
> around the world. There are now more than 1,500 units in the current
> sales pipeline representing over $20 million in potential revenue. The
> steadily increasing flow of orders, month over month and week by week,
> provide the Company with confidence it is on schedule to meet its revenue
> goal of between $2 and $3 million this year.
>
> I am proud to report that since our first sale in October, 2002, the
> Company has generated revenue of approximately $300,000 having shipped 35
> RAMP Systems and an additional 50 cartridge kits strictly for use in
> biodefense. RAMP Systems have been sold in Canada, the US, Japan, Italy,
> Australia, and United Arab Emirates. Both Health Canada and the US Air
> Force has recently purchased, and major US cities currently using RAMP
> Systems include Denver (Fort Collins), Chicago, New York, and Houston.
>
> Although funding delays have resulted in a slower uptake of biodefense
> products during 2002, the recent release of government grant money in the
> US, Canada and Israel is now beginning to reach potential purchasers,
> contributing to a marked increase in RAMP sales. Furthermore, as
> biodefense initiatives become permanent budget items and money flows to
> first responders, the market opportunity for RAMP appears considerably
> larger than originally anticipated.
>
> In addition to nine distribution partners in the US, agreements are now in
> place with well-established marketing partners in Israel, Germany, Italy,
> and United Arab Emirates. Discussions are also underway with potential
> partners in Ireland and New Zealand.
>
> After a great deal of effort to unequivocally prove the strength of the
> RAMP platform, and raise awareness among potential purchasers and industry
> stakeholders, Response Biomedical's RAMP System is now front and center on
> the radar screen of biodefense opinion leaders in government and the
> private sector in North America and abroad. The Canadian Department of
> Foreign Affairs and International Trade has been particularly instrumental
> in raising the Company's profile abroad by publishing a success story on
> UNMOVIC's reliance on RAMP, and widely disseminating that information to
> international government agencies, prominent industry tradeshows, and by
> posting the article on its website
> (<www.dev.dfait-maeci.gc.ca/tna-nac/stories43-en.asp#bio>).
>
> The results from three sets of independent evaluations demonstrating the
> world-class performance of the RAMP Anthrax Test were presented earlier
> this month at the American Society for Microbiology (ASM) Biodefense
> Research: Development of Countermeasures in Baltimore, Maryland
> (www.asmusa.org). In addition, the results from the RAMP evaluation
> performed by the Maryland State Public Health Lab have been accepted for
> publication in the US CDC's Emerging Infectious Diseases. Furthermore, the
> Company has agreed to participate as the industry partner in a proposed
> development and supply agreement for hand-held assays on the RAMP platform
> with the Canadian Department of National Defence and US government
> agencies. A joint funding proposal has been recently submitted for
> review. Also, initiated at the request of UNMOVIC based on the strength of
> RAMP tests for anthrax, ricin and botulinum toxin, the Company is in
> late-stage development of a test for smallpox that has already been
> provided to the UN for evaluation.
>
> Nonetheless, the long-term business strategy remains on the clinical
> applications of RAMP, beginning with the point-of-care cardiac
> applications for detecting heart attack. The Company is committed to
> undertake clinical trials of RAMP tests for measuring cardiac markers
> troponin I and CK-MB, submit for regulatory market clearance in the US,
> and negotiate the international marketing rights with strategic partners
> in 2003.
>
> As you may know, in November, 2002, we announced initial pre-clinical
> results of RAMP tests for troponin I and CK-MB which demonstrated
> excellent agreement with the Dade RxL predicate device, a state-of-the-art
> lab-based analyzer.
>
> I am proud to announce that we have subsequently achieved a three-fold
> increase in RAMP's troponin I sensitivity, which now approaches the
> performance of the most sensitive lab equipment. These results may even
> allow RAMP to be used in the emerging area of high sensitivity troponin I
> testing for the purposes of identifying low levels of heart damage before
> the onset of heart attack, enabling rapid diagnosis and preventative
> treatment. This significant breakthrough in POC testing is expected to
> vastly improve patient survival rates. From a business perspective, these
> results have immensely impressed several top-tier healthcare and medical
> diagnostic companies that were already keenly pursuing opportunities with
> the Company for the international marketing rights.
>
> The Company is on schedule to achieve CE Mark during April, providing
> unfettered market access throughout the European Union and other
> jurisdictions. In the United Kingdom, RAMP Systems are performing well in
> evaluations underway at leading clinical facilities, and the Company's
> exclusive distributor, Axis Shield Diagnostics is executing a product
> launch beginning next month.
>
> The Company has received the initial payment in relation to the research
> collaboration announced last month with a Global Fortune 500 Company. The
> agreement to modify the RAMP System for entirely new market applications
> follows more than a year of due diligence on behalf of the multi-national
> healthcare company, and initial efforts are proceeding on schedule.
>
> In closing, Response Biomedical is extremely well positioned to meet the
> urgent needs of the international community to reduce the threat of
> bioterrorism by supplying RAMP Systems. The Company expects to achieve
> positive operating cash flow on a monthly basis by the end of this year
> with conservative sales estimates, based on substantially discounting the
> pipeline. The tremendous short and long-term commercial opportunities for
> the RAMP platform should make for a rewarding year for the Company and its
> shareholders.
>
>
>
> Sincerely,
> <<...OLE_Obj...>>
> Bill Radvak
> President & Chief Executive Officer
>
> |
