Anteo Diagnostics and BBI/Alere - Putting the pieces together

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Some observations on time frames in Contract Assay Development

 

After doing some further research following the recent news on the heads of terms agreement between Anteo Diagnostics (ASX:ADO) and BBI Solutions (Part of the ALERE Group NYSE:ALR) I thought I would try and investigate further with the information I had what the typical stages are of development pre product launch.

 

If you have read my previous post on Anteo and BBI Solutions you will know that they are working together with the aim of launching a "Next Generation" lateral flow platform into the market in the second half of 2014. ALERE/BBI are the market leader with a 40% share of the global Rapid Test market with sales in excess of $2 billion in lateral flow pa.

 

There was quite a bit of information in Anteo's Quarterly activity reports over the last year signalling that substantial paid work was being undertaken to validate Anteo's Mixngo technology.

 

After going back over some of the quarterly reports and visiting the BBI Solutions website I believe I found some relevant information. Firstly see below the typical assay development schedule taken from the BBI website. My notes are on the right hand side indicating where I believe ADO are in this development stage.

 

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Ok so this gives us a good idea of what the usual time frames are - remember BBI Solutions/ALERE chose to increase manpower on this project to reduce time to product launch from 12 months down to 8 months. This speaks loudly to me that a global leading healthcare company wants to fast track this project to incorporate Mixngo.

 

See below snapshot from Anteo Diagnostics's quarterly report dated 29th July 2013.

This clearly shows the same wording to correspond with the development chart taken from the BBI Solutions website.

My feeling is the confidence shown recently by CEO Dr Geoff Cumming in the Microcap Investor Video that I posted in my last blog post may be that this paid work that ADO are currently undertaking as part of the HOT agreement is actually scaling up ready for production?

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My Thoughts?

This is well and truly powering ahead - It is not a matter of "IF" but "WHEN"

If Anteo are at Phase 3 "Scale Up to Production" then it is only a matter of time before the market hears about a binding commercial agreement with BBI/ALERE that could see revenues anywhere from $20-$40m depending on if it is an exclusive contract to the lateral flow market. If product launch is due around mid year 2014 then I would expect to hear something perhaps first quarter 2014 that would value the company much much higher than current share price of 17 cents or $130m MCAP.

WHAT ARE YOUR THOUGHTS?

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Disclosure : The author holds shares in this company. This research is not a recommendation to buy or sell shares in this company. The author may at any time buy or sell shares without notice. Please do your own research