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Also at CST agm

  1. 94 Posts.
    HI ALL,
    Having also attended the Cellestis AGM I congratulate Forrest on his very thorough report.
    I would like to add my observations also.
    The company is very pleased that their Mark 2 tb test, is virtually unaffected by bcg vaccinations. They proudly told us it is 99% accurate.
    The most important short term news I gained at this agm was a very believable explanation for the delay in early sales ie late FDA final sign off, plus the CDC delays in their finalizing the guidelines which appear to be the key to all important US sales, just as Ridge and Forrest have so correctly forecast in earlier postings. I agree with Forrest about the huge potential for the Japanese mkt, which will nicely kick in after sales in the US really get going.
    Bit unfortunate about the military being distracted short term, but the potential for early prison sales is enormous.
    Consider the following in the light of us knowing that the prison system conduct approximately 2 mill tests p/a. Dr Rothel told us that Cooktown jail in Illinois do approx 100000 tb skin tests p/a. Prisoners have to be re examined 72 hours later to have a qualified person check the size of the lump. I have copied below an extract of some comments from Dr Rothel directly related to this problem.
    Here is a problem which clearly converts to major opportunities for Cellestis to capitalise on. For one reason or another ( I guess general jail movements etc) only 30% of prisoners tested are ever re examined. In other words the tb control methods are only 30% efficient. Not very cost effective at all imho. Here is where the opportunity just jumps out for significant early sales. Evidently all prisoners are blood tested for hiv, syphilis etc, so it will be very easy for the prison to add on the quantiferon tb test to be done at the same time. The jail tb control system then has a quantum leap in efficiency, and obviously is then so much more cost effective. One would hardly imagine the rest of US jails which conduct the other 1.9 million tb tests doing things much differently.

    We were also told Senator Kennedy has introduced a bill to double the funding for tb control. Evidently the cdc already spend A$200 mill p/a on tb control.

    Cellestis are a company who manage available funds very carefully. A fellow shareholder accountant friend made that comment to me at the agm whiles't reading the annual report. An example of this occurred to me at last years agm where we did not get any morning tea etc. I simply put this down to the fact that managment were flying to Japan later that day. This year I thought we might have got a coffee or tea. A further example of their tight financial control, this year we got access to water and mints. At this point in the companies history, I find this extremely encouraging because it shows the companies attitude to cost control. Anyone who has seen their facilities at Carnegie must realize that overheads are kept as low as possible. Have we all not seen exactly the opposite in so many cases.

    Forrest was right in commenting that we should have tried to find out while we had the opportunity if the the second generation kit would ultimately take over from the mark 1 kit in the US.

    Dr Rothel: "Its main problem is it's very subjective - with a tuberculin test a
    small amount of an extract from the bacteria is injected into the skin of your
    forearm then the person comes back 2 or 3 days later and the healthcare
    worker looks for a lump at that site. It depends on the size of the lump
    whether the person has TB or not according to the test. In the US at least a
    10 mm lump means you have got TB and a 9 mm lump means you don't.
    It's very difficult to measure and healthcare workers worldwide have a lot of
    trouble in accurately measuring the tuberculin skin test. Another big
    problem is people don't come back for three or four days later to have their
    lump measured so we don't get a result for those people because they
    don't come back so we don't get to read the test. Potentially those people
    could be infected and could go on to spread the disease or from a
    economic point of view, in many situations have to be chased up by the
    health system found again and re-tested - it's a very expensive procedure."
    Ian
 
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