CMTR-CHEMTRAK FDA OK Message Board

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Biotech / Medical : CMTR-CHEMTRAK FDA OK

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To: Louis DeMartini who wrote (84)	12/2/1996 9:24:00 PM
From: Larry Hartman	of 1172

According to Chemtrak's most recent 10Q (quarterly filing mandated by the Securities laws) Chemtrak started shipping the revamped Cholestrak out the door starting the end of September. Johnson & Johnson stopped marketing Cholestrak's predecessor (same product but under a Johnson & Johnson name) because of what it deemed a "lack of interest". However, Chemtrak going it alone has reduced the price by about $6.00 and is more clearly focusing and targeting on people more likely to use the product (i.e. overwieght people and people with health problems). Furthermore, the H. Pylori Test was also only going to start being shipped during the 4th quarter of 1996. Chemtrak was smart enough (more like lucky enough) to team up with Astra Merck, which supposedly has the largest market share for the product that treats ulcers in their presently understood form. Chemtrak's diagnostic product will be jointly marketed to the doctor's with this number one treatment product. These two potential large revenue sources will therefore only start producing from now going forward. FDA approval for the HIV Test will hopefully arrive early 1997 and Chemtrak will then be one of the few players in that field (only 2 others are in the market now with another due to arrive soon) for a market that is estimated at $200 million annually within the next few years. Finally there is some concern regarding Chemtrak's financial staying power. During the course of the last 12 months Chemtrak has lost about $6 million (give or take). The company currently has a little more than $6 million in cash and short term investment reserves, an amount sufficient to tide it over for a year assuming the company continued to badly market the quality products it has managed to produce. I think the company has made an effort on the management side by hiring new individuals and it remains to be seen whether the company can capitalize on its products. This company is not going under soon, but the eventual risk is there if it can't capitalize on its innovations.

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