I was at the special shareholders' meeting. There were about 35 - 40 shareholders attending, more than they were prepared for, so some folks needed to stand out in the hall. Management had sufficient proxies to pass all 3 proposals, so voting was just a formality. After the voting, Jim O'Shea threw the meeting open to questions. I didn't take really good notes, but here's how it went, topic by topic:
Glucose Monitoring Device -
Jim talked about how he had been a test subject, in Elan's Israel development labs, for the device. They installed 3 of the patches, 2 on his chest and 1 on his arm. Readings from the patches were cross-checked with reading from blood samples. They had him fast until his glucose level was very low, then had him drink a "horrible" sugar drink which immediately sent his glucose level very high. Periodically comparing the readings from the patches with his actual blood glucose levels. Jim said that the patches proved to be very accurate, and that he felt no discomfort or awareness of the small needle probe.
He talked about competitive devices, especially the GlucoWatch from Cygnus, which is the only other portable, "continuous monitoring" device. The GlucoWatch works by extracting interstitial fluid electrically into a patch on the skin. This is not physically invasive. The test cycle takes 30 minutes, and accuracy is in question if the subject is sweating heavily. Cygnus is closer to getting its product to market than Bioject, but we have some advantages. Our device is minimally invasive, with a small needle probe, but is more reliably accurate and able to get readings much more frequently than Cygnus'.
Someone asked if we would be at a disadvantage, not being first to market. Jim's spin on that is that we will be able to take advantage of the competition's blazing the trail with regulatory authorities, and that our greater reliability / frequency will give us a good position in this HUGE market.
I asked about how the JV Sub would be capitalized, given future scheduled payments to Elan of $15.5 M. Jim's response is that we have attained this technology at an initial expense ($15M) much less than its true value, deferring further payments until later. He said that he has already been contacted by 2 large companies looking to invest/partner in this venture. There should be no problem raising capital, as we progress through the clinical testing phases.
The first clinical test will be taking place soon (in March or April - I forget), in Ireland and is expected to last just 1 week.
Biojectors -
Bioject is investigating, and probably going to develop, a spring actuated injector for subcutaneous (only) injections. This will be aimed at the insulin self-injection market. It will be much smaller than the existing device.
The Roche device is close to being released. This has been developed as a delivery system for the proprietary drug Rocephin, a broad based antibiotic. The device is larger than the Biojector 2000, having a capacity for 1500 ml, as opposed to the Biojector 2000's capacity of 1000 ml.
Jim stated that they are currently focusing marketing efforts on various public health institutions including the military and various school inoculation programs. Also, they are talking with drug companies about using the self-injector, developed for but abandoned by Schering.
Several shareholders voiced their frustration over sales results of the Biojectors. Jim said that he is also frustrated. There is formidable resistance at almost all levels of the health care system to the higher cost of jet injection. His strategy is to continue seeking drug companies as marketing partners, because they have large sales staffs with the ability to cover lots more territory than a small company like Bioject could ever hope to cover. He said that Bioject doesn't have the financial resources to build a sales staff to be knocking on all the doors which need to be knocked on. The small sales staff which Bioject can afford needs to focus its efforts on the areas which have the greatest potential return, specifically large public health institutions. In public health, patient compliance to inoculations is the key to success, and needle-free injections significantly increase patient compliance.
Afterwards, Ricky Richardson, the director of manufacturing led an informative tour of the manufacturing area, where we saw ampules being assembled in a clean room environment, and the injector assembly area. Ricky talked about quality control and the pending ISO 9001 certification. |
