CEMI
1. Name, symbol, bid-ask, shares out Chembio Diagnostics, CEMI, 62 million on 11/4/09, fully diluted 75 million
2. 10Q and/or 10K link: sec.gov sec.gov
3. Brief Description of debt: NO convertibles. 2.2 million accts payable (appears to be mostly future revenue sharing with Inverness), 360k deferred rev (disappears when/if future conditions are met), 875k license fee payable (for use of patent tech, one time payment due dec 2010).
4. Other financial info of interest: cash 1.8 million 9/30, cash from ops 9 mos 950k, real revs 10.3 vs 8.6 million first 9 mos, profitable first 9 mos, over 300 most recent qtr.
5. Main product/technology: HIV diagnostic
6. Why credible? Partners, Independent validation..: Inverness, 110 ees
7. Why the stock may be a "homerun": Oral over the counter HIV test expect approval in 2011, US sales of existing test up substantially from 1.88 to 3.45 in 9 mos, which are higher margin, other non-HIV items in pipeline (*see below)
8. Any other issues of possible interest: management, recent PRs, legal issues, competitive position, etc..: 3rd qtr was first profitable ever,
"Based on our year-to-date product sales in the HIV U.S. market of $3.45 million, and our current backlog, we anticipate that for the full 2009 year we will reach at least $5 million of sales of our rapid HIV tests being sold in the U.S. market, which would be substantially more than a 100% increase from $2.1 million in 2008. We also anticipate that we will be profitable for the fourth quarter of 2009, and therefore for the full year. Our profitability will be reduced to the extent of expenditures, related to clinical evaluations we are commencing for our anticipated 2010 submission of a Pre-Marketing Approval application to the FDA for our DPP® HIV 1/2 Screening Assay for use with oral fluid or blood samples.
As we complete 2009 and begin 2010, we believe that the products for which we are waiting for regulatory approval in Brazil will provide the Company with an important new stream of revenues, and important cash flow from technology transfer fees that will help to underwrite our clinical testing. These and other milestones that we expect to achieve, such as our completion of the product development phase for the multiplex product for Bio-Rad laboratories, Inc., will provide us with further validation of our DPP® technology. During these next twelve months, our efforts will be focused on the launch of our initial DPP® products in Brazil, and on commercializing our DPP® HIV 1/2 screening test for use with oral fluids and our DPP® Syphilis Screen and Confirm test. We also anticipate that we will make progress in our development of tests for Hepatitis C and Influenza, also on our DPP®. We also have certain opportunities for our lateral flow HIV tests in new markets which, if realized, will complement our base business of lateral flow HIV test sales."
*From the 10Q:
CE Mark for FDA approved HIV tests – All testing and related documentation that was requested by our Notified Body during the second quarter has been completed and based on the results of the testing we believe that our CE Mark filing is now complete for our HIV 1/2 STAT PAK® and it has been submitted. We now expect to receive the CE Mark for this product in the beginning of 2010. Under our agreement with Inverness, we are to obtain a CE Marking for the Clearview® Complete HIV 1/2. However Inverness has a rapid HIV test product that is already CE marked in Europe and so they recently informed us that they have chosen to focus their marketing resources in Europe exclusively on that product. Accordingly we expect that we will reclaim marketing rights for this product in Europe, and will complete the CE mark filing for this product under the Chembio brand Sure Check® HIV 1/2. At that time, we intend to arrange for alternative distribution partners in Europe for this product.
Regulatory Approvals in Brazil through the Oswaldo Cruz Foundation (FIOCRUZ) – We anticipate that FIOCRUZ will receive required approvals from its regulatory agencies during 2009 or early 2010 for the DPP® Leishmaniasis, HIV Confirmatory, and the DPP® HIV screening tests. This will trigger approximately $900,000 of technology transfer fees payable to the Company and, soon after these approvals are granted, is likely to result in receipt of orders from FIOCRUZ for these products. We initially believed that these approvals would be granted during 2009. Due to a variety of factors, none of which relate to the anticipated demand for the products or their performance, we believe these approvals will be granted either during the remainder of 2009 or during the first quarter of 2010.
DPP® HIV 1/2 Screening Assay for Oral Fluid - During the third quarter we were notified that this product met the performance and other criteria established by the United States President’s Emergency Plan for AIDS Relief (PEPFAR) for inclusion on the USAID waiver list, enabling procurement by countries and other beneficiaries of this US taxpayer-funded program. This evaluation was based on, among other criteria, sensitivity and specificity studies using serum panels and FDA approved reference tests that are approved for serum. We will be supplementing these studies with studies that are ongoing in Africa, one of which we expect to be completed during the fourth quarter, as well as with our clinical studies in the US as they are completed. During the third quarter, and continuing during the fourth quarter, we have made significant progress toward commencing the regulatory approval process for this product in the United States. We have identified and have completed one agreement with a clinical testing site, and we are working on other agreements which are pending. We anticipate completing a portion of the clinical trials in support of a Pre-Marketing Approval (PMA) application for this product during the fourth quarter of fiscal 2009. We also anticipate the remainder of the testing to be completed during the first half of 2010, and a PMA approval during early 2011. This product will enable Chembio to participate in the oral fluid testing market segments in the United States and globally, where we believe there is a significant opportunity not available to blood tests. In addition, upon satisfactory completion of the PMA, we would consider moving forward for over-the-counter approval of this product.
DPP® Syphilis Screen & Confirm - The first phase of a multi-center evaluation sponsored by the World Health Organization commenced during the third quarter and we expect to have the first phase results before the end of the fourth quarter. During the third quarter, we submitted a proposed clinical plan to the FDA (Pre-IDE “Investigational Device Exemption”) and we are currently reviewing the FDA response. We have also begun to identify clinical testing sites, have performed additional validation, interfering substance, and cross-reactivity studies on the product at Chembio and at external laboratories. There is no point-of-care test for syphilis cleared for marketing in the United States, and we believe that our product, with its multiplexed capacity to identify both treponemal and non-treponemal markers, provides a reliable indication of an active, untreated case of syphilis at the point of care. |
