July '98 Letter
President's Letter to the Shareholders - July 1998
Dear Immucor Shareholder:
June began an exciting new fiscal year for Immucor. I want to take a few minutes with you to discuss the state of the company-where we've been, where we are now, and where we're headed in the future. By the time you've finished reading this letter, I think you'll agree the future of Immucor looks very bright indeed.
On July 6, 1998, we announced FDA clearance for Immucor to market the ABS2000 in the United States. While this is an exciting end to a process that began over five years ago, it is the beginning of a new era for Immucor and as a result we are in the middle of an extremely busy summer!
We appreciate everyone's patience during the FDA review process, and look forward to reporting the exciting updates in future editions of this correspondence. While the delay in obtaining FDA approval for the ABS2000 was frustrating for everyone, the intervening time presented us with several excellent opportunities, and we think we've taken full advantage of them. For example, extra time has allowed us to develop a solid infrastructure to support instrument programs. That infrastructure will be used to support other product lines, thus we've expanded our family of instrument products faster than we might have had we received FDA approval for the ABS2000 a year ago.
We now have three major instruments to sell to the transfusion laboratory marketplace. Between them, these instruments can serve any size laboratory or institution, no matter how great or small the requirements for throughput, turnaround time, etc. By concentrating our efforts on obtaining the exclusive marketing rights to additional instrument systems during the past year, we're now in a better position than ever to make major market share gains in all market segments, and to increase our revenues significantly. The ABS2000 is important, and it's our flagship instrument, but we strongly believe that to be successful in the instrument business, it's vital to broaden our instrument offering by adding new systems allowing our sales force to focus on providing solutions for the specific needs of our customers.
The two new systems are the DIAS PLUS and the ROSYS Plato. The DIAS PLUS is a high-volume, microplate processing system that can process over 300 tests per hour. It provides continuous access processing, tracks samples throughout the process using barcodes, and transports plates among modules by robot carrier, and when combined with our Inverness Reader, electronic interpretation of results eliminates the subjectivity traditionally associated with blood serology testing.
The DIAS PLUS has been on the market for almost a year, and the instrument has proven to provide tremendous productivity improvement with one large center reporting a 234% increase in productivity since implementing the DIAS PLUS system 10 months ago. The early returns are encouraging, and we expect to capture even more market share with the DIAS PLUS during the next two quarters.
The ROSYS Plato is a medium-to-high-volume walkaway instrument that offers the capability to process a broad menu of microplate assays. Immucor has exclusive rights to sell the ROSYS Plato to the Transfusion Service markets in North America. The system is already 510(k) cleared, which frees us to take it to market as soon as we have completed our internal validation procedure. We've already managed to generate a tremendous amount of interest in the ROSYS Plato, and we anticipate installing our first systems in August.
Immucor is the only company in the United States that can offer such a high level of instrumentation to each market segment. There is only one competitor that even comes close, but their only product offering is a liquid handler that doesn't include any robotics to minimize operator attended time, or a reader to perform electronic interpretation of results. Without those key components, they can not improve productivity or eliminate the subjectivity of test reporting, and therefore, do not positively impact the customer's need to automate! So to summarize, Immucor is the first U.S. company to offer automation for the Transfusion Service, and we're also the only one.
Immucor's instrument offerings are very impressive especially when you consider our competitor's have yet to launch a single system in the United States. And the major plus to the equation is that all three instruments-the ABS2000, the ROSYS Plato and the DIAS PLUS-use Immucor's proprietary Capture assay system. Once a system is installed, the user's need for our reagents is ongoing. Sales of our Capture reagent system will drive increased growth for Immucor. The more systems we sell, the more reagents they'll use, and the more growth Immucor will see. That's perpetual downstream revenue while providing much needed solutions for our customer base.
At Immucor, our mission is to partner with our customers to solve problems they face in blood banking. While the ABS2000, the ROSYS Plato and the DIAS PLUS do an excellent job of handling the testing component of blood administration, there are pre-analytical and post-analytical issues that need attention. Before he left the FDA, the administration's former chief, Dr. David Kessler, said that he believed there were about 2,600 unrecorded deaths in the U.S. annually due to improper administration of blood. In the traditional mode of transfusion, there is no "fail safe" system to validate the collection of blood from the patient, the testing of the correct sample, the matching of the proper patient sample to the right donor unit, and then confirms that the correct units of blood are transfused to the correct patient.
This situation clearly presents considerable safety and liability concerns, and Immucor has solved the problem by adding a new product to our line: the I-TRAC system. I-TRAC's hardware is portable, handheld terminals that are used at the bedside to ensure that the right samples are drawn, that those samples are tracked through testing, and that the proper units are transfused. To accomplish all this, the nurse simply scans a barcode label with a wand, and the I-TRAC confirms that the units to be transfused are the correct units for the patient. We perceive there is a universal need for Immucor's
I-TRAC system in the healthcare marketplace worldwide....the need to minimize the potential danger associated with blood administration. We expect to install our first system in the US in the 2nd fiscal quarter of this year.
While our 1998 fiscal results are not yet final, we finished the year with strong growth in sales. Bear in mind that this growth took place without our new instrument product line even being available for sale in the US! That's why, in our new fiscal year, we're excited about the potential for some solid, double-digit growth-not just in revenue, but in earnings, as well.
To help us manage that growth, we've brought Steven C. Ramsey on board as Immucor's new Chief Financial Officer. Steve has an impressive record as a senior financial manager, and he is also well acquainted with the medical testing instrument market, having been CFO of International Murex Technologies Corp. before accepting his position with Immucor. Steve has also served as Vice President Finance and Administration with Novamax Technologies, and he rose to Vice President Operational Accounting at Sprint Communications during the well-known long distance company's early years. We selected Steve Ramsey as CFO because we believe he has the experience and the vision to manage Immucor's growth as we transition into instrumentation manufacturing and marketing.
In the interest of maximizing future growth, we're looking at global business strategy now that we have the initial phases of our instrument product line developed. We are currently evaluating and modifying our commercial operations to achieve continuity worldwide as we bring our product family to market. One of those modifications is that Dr. Nino De Chirico has become Immucor's European operations. Nino's outstanding success in Italy makes him the ideal candidate to help us make a consistent effort in marketing our products throughout Europe. Nino has recently hired Eduardo Graells, a seasoned veteran in diagnostics, as our new General Manager in Spain. Spain is the fourth largest market opportunity in Europe, and we expect that Eduardo's experience and leadership will establish Immucor as a major player in this important market.
Again, I want to thank our shareholders for their patience during the lengthy approval process of the ABS2000. We're justifiably very excited about the future at Immucor. The process is complete and we are now in the position to change the face of what serology testing and transfusion diagnostics will be in the next ten years. What a great place to be.
Everyone at Immucor is grateful for your continuing support.
Sincerely yours,
Edward L. Gallup
President and CEO
This correspondence may contain forward-looking statements as that term is defined in the Private Securities Reform Act of 1995, including, without limitation, statements concerning the Company's expectations, beliefs, intentions or strategies regarding the future. All forward-looking statements included in this document are based on information available to the Company on the date hereof, and the Company assumes no obligation to update any such forward-looking statements. Further risks are detailed in the Company's filings with the Securities and Exchange Commission, including those set forth in the Company's most recent Form 10-K and Quarterly Reports on Form 10-Q. |
