Brinks Delivery
Chicago-Based Monogen Reaches Key Milestone --
Imagine determining with SPIT with up to 99% specificity whether you have lung cancer, and differentiates among the 5 types of lung cancer, at such an early stage that you would have a very high probability of successfully beating the cancer.
Next Generation of Cytology Specimen Processors with Significant Competitive Advantages
MonoGen, Inc. (Chicago, Illinois) - Medical Device Profile
MonoGen, Inc. is a medical device and molecular diagnostics company based in the Chicago area. The Company provides high-quality and cost-effective cell and tissue-based screening and diagnostic products to healthcare providers in the anatomic pathology industry.
I have followed the MonoGen's progress for a year. I even met in early 2006 with the CEO. My average share cost is $ .715 US where the current market price is. The reason I am presenting it here now is that it has finally reached the critical value creation milestone by entering into the commercialization phase after receiving FDA approval for the commercialization of one of its initial key products to begin in the first quarter of 2007.
Monogen is a "pure-play" debt-free invitro-diagnostic medical device company that is developing an integrated suite of fully automated modules called the Savant Laboratory System for anatomic and molecular pathology laboratories. It received FDA approval in March of this year for its flagship machine and has just completed a private placement, and has $ 22 million US cash, in preparation for the manufacturing ramp of its Monoprep Processor that will perform liquid-based PAP tests. ( See the machine in action and study the backgrounds of its management and board of directors at www.monogen.com ). The Savant Laboratory System was designed to automate processes performed by clinical laboratories to reduce their costs, increase throughput, and improve the quality and consistency of results.
The Savant Laboratory System is designed to automate processes performed by clinical laboratories to reduce their costs, increase throughput, and improve the quality and consistency of results. This is particularly important for high-volume screening programs such as the existing PAP tests for cervical cancer detection and diagnosis. The system’s ability to handle a high volume of tests at low cost should promote additional screening programs for the early detection of other cancers.
MonoGen develops and markets products to automate pathology laboratories. MonoGen helps facilitate the work of the healthcare continuum by helping to improve the reliability and efficiency of the pathology laboratory. MonoGen's products and processes are covered by more than 300 patents and patent applications.
Symbol MOG.TO CDN Toronto Stock Exchange (TSE) MOGIF U.S.
Present Market Price $ .80 CDN $ .71 US
MonoGen Market Cap $ 120 Million (company has $ 22 million Cash)
stockhouse.com
CYTYC Corp. Direct Competitor $ 3.23 Billion Market Cap
finance.yahoo.com
Overview
“MonoGen develops technologies and instruments to automate anatomic and molecular pathology laboratories, which largely operate manually today. Our products target broad and well-defined segments of a diagnostic testing market currently estimated by financial analysts at $3.2 billion. Forecasts predict this market will grow to $5.1 billion over the next five years as a result of significant advances in molecular diagnostic testing, particularly in proteomics and genomics testing. These new tests offer the potential for widespread screening programs of populations at risk for cancers and infectious diseases modeled on the screening done today for cervical cancer in women.
MonoGen's MonoPrep LBP Processor employs proprietary technologies to automate the processing and preparation of liquid-based specimens, increasing our customers' efficiency and reducing their operating costs while maintaining high quality standards. At the same time, the MonoPrep processor provides unique all-in-one processing functionality. It is designed to prepare clear and highly representative samples of most specimen types for both slide-based cytology tests and liquid specimen-based molecular tests.
MonoGen has a comprehensive portfolio of more than 300 U.S. and foreign patents and pending patent applications. The following technologies are covered:
• The MonoPrep dual-flow filtration technology, which reliably produces clear, thin-layer cytology samples mounted on MonoPrep slides.
• The operational features and subsystems of the automated MonoPrep LBP processor, including the ability to prepare cuvette-based patient samples for subsequent molecular testing.
• The unique MonoPrep vial system, which facilitates the specimen collection process and seamlessly interfaces with the MonoPrep processor and the proprietary Data Management System to ensure the preparation of high-quality samples linked to patient data.
• Imaging information technology used with the Cognetix analyzer and the BioSight™ pathology workstation is being designed to improve the efficiency and accuracy of the diagnostic process.
• Molecular diagnostic technologies for improved diagnostic results.
Comprehensive trademark and copyright protection, as well as trade secrets, supplement the MonoGen patent estate.
The FDA approved the MonoPrep Pap Test (MPPT) in March 2006.” End
MonoGen is on the leading edge of the revolution in automation that will drive population-based screening as these molecular tests are developed and approved over the coming decade.
MonoGen is about to embark on the commercialization of its FDA-approved MonoPrep® Pap Test and the MonoPrep Processor system.
"MonoGen believes that its MonoPrep Processor offers significant performance and cost advantages over currently marketed products such as the ThinPrep 2000 and ThinPrep 3000 products marketed by Cytyc Corporation, including cost savings, labor savings, increased automation, greater throughput, increased flexibility, greater safety, error reduction through specimen tracking and identification and no manual slide handling..."
MonoGen’s 300 patents and patent applications developed over nine years are greater in number than industry leader Cytyc.
MonoGen has raised total cumlative capital of approximately $ 82.5 million (most of which went into development of the research and development and the 300 patents) over a nine year period and has a market cap of only $ 120 million.
MonoGen became a public company on October 31, 2006 merging into public venture capital company Oxbow Equities which was the major shareholder.
The main architect of revenues for this Cytyc from 1996 to 2000 growing from $ 0 to $ 221 million was Ted S. Geiselman, Vice President of Engineering and Operations, who retired at age 40. See Value Line of $ 3.2 Billion Cytyc attached. Note stock price today versus when Mr. Geiselman retired in 2000. Note revenues !! Mr. Geiselman knows everyone in the industry. Mr. Geiselman was getting bored in retirement and was hearing a lot about MonoGen so he called the company for a visit. Within 48 hours of the visit he decided to come out of retirement and join MonoGen as Senior Vice President and Chief Operating Officer and move his family from Mass. to Chicago.
See Press Release oxbowequities.com
“From 1993 through 2000 Mr. Geiselman assisted the growth of Cytyc Corporation from a development-stage company to a profitable commercial business focused on the use of liquid-based cytology products in a women's healthcare industry. Mr. Geiselman assumed growing responsibilities at Cytyc culminating with him being Senior Vice President responsible for R&D, Operations, Regulatory and Clinical Affairs, and Quality Assurance. During his tenure at Cytyc, Mr. Geiselman and his staff developed the ThinPrep® 2000 and the ThinPrep Imaging System, acquired and provided design support for customized automated manufacturing equipment, and created a highly efficient, "best-in-class" operations organization. Before joining Cytyc, Mr. Geiselman was a Director of Instrument Systems for the Dade Division of Baxter Diagnostics in Miami, Florida.”
TECHNOLOGY NUGGET:
Of the many points I could make, listen to this. Monogen has patented "panel assays" for the early detection of lung, bladder, and colorectal cancers. Take lung cancer: they can determine from your SPIT with up to 99% specificity whether you have lung cancer, and differentiate among the 5 types of lung cancer, at such an early stage that you would have a very high probability of successfully beating the cancer. Do you think that many investors are aware of this?
Present Opportunity and Valuation:
IMHO MonGen is extremely undervalued at the current price of $CDN.80 ($US .71).
$US 82.5 million has been invested directly into Monogen since its inception in 1997, over 1/3 in the last 45 days, at an average price of $US.50. The company now has no debt and $US 22+ million of net cash. Even more remarkable, the Weiler Trusts, the major shareholder of the Company , which have invested over $US 27 million, have an average cost of $US.57 for the 47.5 million shares that they own. It is amazing that for the last month you have been able to buy "size" only pennies above this level. This will not last much longer IMO.
Investment Thesis
After 9 years of incredible effort with very little money MonoGen is at the inflection point in its life cycle.
MonoGen has reached a critical value creation milestone by entering into the commercialization phase upon receiving FDA approval for the commercialization of its MonoPrep Pap Test in March 2006.
MonoGen believes, based on clinical data and econometric analyses, that its existing products provide customers with significant cost and performance benefits over competing products in the cytology preparation market. More specifically, MonoGen believes its products increase throughput, reduce labor, reduce errors, increase safety for laboratory personnel and create additional revenue sources for customers.
MonoGen Websites
oxbowequities.com
News
oxbowequities.com
www.monogen.com
The key document to do more due diligence is the 226 page proxy—it has tables comparing MonoGen’s products to competitors.
oxbowequities.com
SEE pages 54 to 57 of above which includes competitive advantages of Monogen including table comparisons
Note there are no analysts following the company yet and no investment newsletters following the company yet.
Monogen is holding an "investor day" in Chicago on January 11, 2007. There is no substitute for actually meeting management and having any questions you may have answered by the CEO.
This person invested $ 6.5 million CDN in 2000 at average cost of $ .57 share ! Mr. Denis has been the architect for assembling this company. IMHO an incredible feat.
André Denis, MBA, President and Chief Executive Officer
Mr. Denis is an experienced investment and merchant banker, having served in various senior positions over a 20 year career in financial services. As a merchant banker, Mr. Denis was the principal investor behind the restructuring of Securitex, a manufacturing company and more recently, NHC Communications, a publicly listed telecom switch manufacturer. Both of these investments have been realized at substantial gains over costs. As an investment banker, Mr. Denis completed over 100 private and public financings and 25 merger and acquisition transactions. Mr. Denis earned his MBA from the University of Western Ontario (1983) and his Bachelor of Commerce from the University of Montréal's École des hautes études commerciales (1979).
adenis@oxbowequities.com
Here is the person behind the Company’s 300 patents:
Norman J. Pressman, CEO, President and Chief Scientific Officer
Dr. Pressman was appointed President and CEO of MonoGen and was elected to the board of directors of MonoGen in January 2001. He has also served as a consultant reviewer for the U.S. National Institutes of Health. Prior to his appointment at MonoGen, he was President of AccuMed International, Inc. and Chairman of the Board of Oncometrics Imaging Corporation. Previously, Dr. Pressman was Manager of Biotechnology Development at Olympus America. He served as President of Cell Systems International, a company he founded, from 1989 until 1993. Dr. Pressman was at DuPont from 1986 until 1989. From 1976 until 1986, he was an Assistant Professor of Pathology at Johns Hopkins University. Dr. Pressman has a B.S. degree in electrical engineering from Columbia University, and an M.S. degree in systems engineering and a Ph.D. in biomedical engineering from the University of Pennsylvania.
Shares Outstanding 168.4 million and 198.2 million on a fully diluted basis.
Before 9/30/07 MonoGen will do a reverse stock split of 1-for-10 and will then attempt to be fully listed in the United States.
More
The MonoPrep Pap Test will be launched for commercialization in the United States market in the first quarter of 2007, together with general cytology consumables for preparation of non-gynecological specimens.
MonoGen has a razor/razorblade business model based on recurring revenue. Each slide prepared by a MonoPrep Processor requires a proprietary MonoPrep kit of consumables. Imaging systems will similarly command per-use utilization fees.
In order to penetrate the marketplace rapidly in a cost efficient manner, MonoGen has adopted a partnering strategy. Specifically, the Company has partnered with Cardinal Health for commercialization, Diamond Machine Werks (“DMW”) for manufacturing and Hoffer Plastics Corporation (“Hoffer Plastics”) for developing and supplying key and high-precision plastic components. DMW and Hoffer Plastics has invested a total of approximately $31 million.
MonoGen believes that Cardinal Health’s coverage of, and established relationships with, clinical laboratories, together with its logistics capabilities will allow MonoGen to significantly expand its sales, marketing and distribution efforts to compete effectively with established players. Moreover, MonoGen believes that these three strategic alliances provide strong validation of MonoGen’s products and market opportunities.
MonoGen also plans to co-develop a suite of proprietary molecular diagnostic tests (using antibodies and nucleotideprobes) for the early detection, diagnosis and monitoring of cancers and infectious diseases. MonoGen has patented technologies for a “panel assay” approach to the early detection and diagnosis of cancers that will enable mass screening and diagnosis of populations at risk for lung, bladder, colorectal, cervical, breast, prostate, and other cancers. The SLS is designed to become the instrument platform for preparing samples for these and additional molecular diagnostic tests developed by other companies.
Business Strategy
MonoGen’s goal is to become the leading provider of a fully integrated automated diagnostic platform for cytology and molecular diagnostics. Key elements in the Company’s strategy to achieve this goal include:
• Establish the MonoPrep Processor as the leading cytology specimen processing system, especially in the large established gynecological market for cervical cancer screening - MonoGen believes that the MonoPrep Processor offers significant performance and cost advantages over currently marketed products such as the ThinPrep 2000 and ThinPrep 3000 products marketed by Cytyc Corporation, including cost savings, labor savings, increased automation, greater throughput, increased flexibility, greater safety, error reduction through specimen tracking and identification, and eliminating manual slide handling;
• Launch new products to complete the SLS, a fully integrated automated platform for cytology and molecular diagnostics - Initially, MonoGen will be launching the MonoPrep Processor for non-gynecological and gynecological applications. MonoGen will introduce additional products to expand the SLS, including a SLS adapted slide stainer and coverslipper, and an in-house developed MonoPrep Imaging System with BioSight
Work Station; and
• Enter into co-development agreements with molecular diagnostics companies to create assays for the MonoPrep platform - MonoGen is currently in discussions with a number of molecular diagnostics companies to allow these companies’ assays to be used with specimens collected in MonoPrep vials, such as HPV assays, in addition to potentially licensing out the further development of MonoGen’s lung and other cancer panel assays that the Company has developed and patented.
Competitive Advantages
MonoGen believes that the MonoPrep Processor has key technical and operating cost advantages over its competitors’ systems that will enable MonoGen to compete effectively.
The MonoPrep Processor’s distinctive features combined with the strong clinical data of the MonoPrep Pap Test should provide the Company with a competitive product.
Among the two LBP systems with which the MonoPrep Processor will compete in the larger gynecological market, the ThinPrep 2000 represents the system that has the largest installed base and is the standard of care in the large gynecological cytology market.
The MonoPrep Processor has the following key distinctive features over the ThinPrep 2000 processor:
Labor Savings The MonoPrep Processor operates unattended for eight hours. The ThinPrep 2000 processor requires at least one full-time operator operating from one to four devices.
Higher Throughput The MonoPrep Processor prepares 40 slides per hour and operates unattended for up to eight hours. A laboratory operating for a single eight-hour shift can operate the MonoPrep Processor for 16 hours per day to produce 640 slides.
Each ThinPrep 2000 processor produces about 20 slides per hour or only 160 slides in a day, or one-quarter of the productivity of a MonoPrep system.
Greater Flexibility The MonoPrep Processor can handle all specimen types, including sputum, without significant pre-processing, due to its built-in high-speed mixing station and the ability to select different filters automatically. The device can handle specimens in any sequence and can make up to three slides from the same specimen.
The ThinPrep 2000 processor is optimized for gynecological Pap tests and requires modifications to be used on non-gynecological specimens. In addition, many nongynecological specimens require considerable time-consuming and labor-intensive pre-processing before the ThinPrep 2000 processor can prepare them successfully.
Better Safety The MonoPrep Processor automatically uncaps each vial and then seals it after processing.
The ThinPrep 2000 processor requires that the operator manually uncap and recap each vial, exposing the operator to biohazards and repetitive strain injuries.
Error Reduction The MonoPrep Processor connects to a paperless Data Management System (“DMS”) that reads and links bar codes on the vial and the slide, provides automatic specimen chain-of-custody control and recording, and generates required
laboratory reports.
The operators of the ThinPrep 2000 processor must record all information manually, increasing the risk of clerical errors.
No Manual Slide Handling The MonoPrep Processor uses a common slide cassette that is pre-loaded with 40 slides. The MonoPrep Processor automatically unloads and reloads the cassette, eliminating the need for an operator to handle bulk slides individually.
The ThinPrep 2000 processor requires that an operator load and unload an individual slide and other consumables for each test. |
