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Gold/Mining/Energy : Response Biomedical (V.RBM) -- Ignore unavailable to you. Want to Upgrade?

To: Starowl who wrote (479)	2/6/2004 5:03:17 PM
From: Starowl	Respond to of 655

Golden Capital Securities did a 2004 first quarter look at several microcap stocks it follows. The report was issued in early January. The stock price was around $0.40 Canadian about then. The report projected the price to fall to $0.30 and recommended a "short-term" sell. Needless to say, the projections were inaccurate, but the write-up is not bad. Here's what is in the report: "Response Biomedical (TSX Venture-RBM) Unlike many of the other medical diagnostic companies in our Report, Response Biomedical was able to undertake an offering late in 2003. In fact, the private placement was increased to $1.72 million, from $1.5 million, as the offering was oversubscribed. After the closing of the financing there will be 53.4 million shares outstanding and approximately 64.5 million fully diluted. This is a significant number of shares across which to spread any earnings when that time finally comes. Plus, we anticipate that the Company will have to undertake yet another offering in the middle of 2005 in order to fund their inventory build-up for their forecasted sales. "Response Biomedical’s medical test kit for Myoglobin and the testing unit have both been approved by the US FDA. The Company’s twin cardiac marker tests for CK-MB and TroponinI have been sent to the FDA for approval, after which they will be able to begin marketing these tests in the United States. While these tests are definitely needed by medical practitioners, we believe that Response is trying to play catch-up in a very competitive marketplace with a “Me Too!” product. Several other companies, including two in this report, already have commercial CK-MB and TroponinI tests available for sale in the U.S. Without a major marketing partner, RBM will have a difficult time cracking the medical market with these products. "Of greater interest to Investors should be the series of Environmental and Biodefense test kits which Response is developing, many of which are already commercially available. The reduced approval process and shorter development period, make financial payback rapid and potentially more lucrative than the medical test kits, based on funds invested. Testing kits for Anthrax, West Nile, Ricin, Botulinum and Small Pox have all been developed and we believe offer greater niche potential for the Company than products for the medical industry. ADAPCO, the largest distributor of mosquito control products in the US, will distribute the West Nile test kit beginning in early 2004. Management hopes to begin Sales in Q1-04, with significant sales in Q2. The RAMP Anthrax test has received several validation reports from important and respected potential users of the test including the US Army and the US Center for Disease Control (CDC). Both organizations have validated the RAMP tests to have a high degree of sensitivity, with a low level of false positives. "Over at least the next three months, until details about the success of the West Nile test begin to be released, we expect that there will be continued weakness in the price of Response’s stock price. Plus, the added shares from the recent private placement will become freely tradable around the end of March 2004. A further financing may also be undertaken at about this time, depending on the level of commercial success of West Nile virus kits. Finally, in May we should have additional information about the Company’s level of success marketing their medical diagnostic test kits. "Therefore, we are going to maintain our Short-Term Sell recommendation and 30¢ target price for at least the next three months. By that time we will have further information about the initial response to the West Nile test and any potential dilution from subsequent equity offerings required to fund the on-going operations of the Company." goldencapital.com