MDM medical monitors limited

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    Even though it is from last year, it gives more understanding to what they actually do.


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    Market Cap (Undiluted): 12,096,362


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    MEDICAL MONITORS:
    IMPRESSIVE CREDENTIALS FOR MEDICAL DEVICES COMPANY
    By Jenny Prabhu and Gerald Stanley
    (May 2002)


    Medical Monitors, whose ECG and blood pressure monitoring products have been developed over the last five years, listed in the shell of Defiance Mining last year .
    While in the short term MDM is cash strapped and raising funds through Terrain Securities from sophisticated investors, even if it doesn't spend another penny, the manufactured products already available and the sales outlined below will start producing revenue.
    While there are several types of blood pressure monitors in the market, MDM's BPfone® and the highly sophisticated monitoring service it provides to practitioners, physicians and hospitals is unique.
    The market for blood pressure monitoring products is huge. In the US some 40/50m people suffer from high blood pressure. In the UK, some 10/12m. In Australia, 2/3 million.
    Retailing at $US100 each plus depending on the level of service required, the device is affordable.

    *In the US, MDM has FDA approval for its blood pressure monitoring technology. In mid May, the largest direct TV sales organisation in the US, QVC, is rolling out a market campaign, managed by an MDM subsidiary WELLness Monitoring Inc, through its home shopping channel.
    (QVC from time to time hosts a Blood Pressure program, this time it features MDMQVC has sold some $US20m of consumer equipment for blood pressure products in earlier marketing programs).
    MDM also has a relationship with ADE the US subsidiary of Japanese based A&D Co and the second largest in the US for blood pressure.
    On Feb 21 Medical Monitors announced it will be providing its unique FDA registered BPfone® blood pressure monitoring system for a blood pressure management trial at the Robert Wood Johnson University Hospital associated with the University of Medicine and Dentistry of New Jersey.
    Medical Monitors wholly owned US subsidiary WELLness Monitoring Inc has contracted with this prestigious university group to provide the blood pressure monitoring component for the trial. The university hospital group conducts contracted clinical trials to evaluate new drugs and therapies on behalf of a number of the major Clinical Research Organisations.

    *In the UK, its joint venture partner Primary Care Group provides IT based services in medical management to local health authority primary care trusts within the National Health System.
    On Feb 22 Medical Monitors announced Primary Care Group has contracted with the Watford Primary Care Trust to provide the BPfone® blood pressure monitoring system as a model for the UK National Health Services National Medicines Management Services program.
    If proven successful, this model could become the basis for the management and monitoring of blood pressure throughout the 302 Primary Care Trusts (PCTs) in the UK.
    This initial program will be provided in collaboration with AstraZeneca Pharmaceutical.
    The UK government is planning to invest at least 30 million British pounds over the next three years to reshape care around the patient, improve quality and make better use of the skills and knowledge of its staff. As part of this process every PCT across the country will develop and deliver medicines management services by 2004.
    In January Medical Monitors announced its blood pressure monitoring technology product was selected as one of the major prize winners for Best Use of IT in Primary & Community Care in the UK's 2002 Healthcare IT Effectiveness Awards.
    Medical Monitors BPfone® was entered in the category by its UK j/v partner .
    The UK's National Health Scheme and the NHS Information authority are two of the five key healthcare IT organisations behind the award.

    *In Europe, MDM has CE Mark from the German manufacturer of its devices, Bosch + Sohn, the leading European manufacturer of blood pressure instrumentation which has specialised in quality blood pressure instrumentation for the past 35 years.
    Bosch + Sohn has the first production run of 4,000 BPfone ® completed and an additional 5,000 BPfone® prepared for manufacture. MDM is finalising an MOU with Bosch + Sohn for a j/v to undertake the distribution and marketing of the WELLness Monitoring Service into Europe.

    *In Australia, it is TGA listed and expects further sales in the second half from the WELLness blood pressure monitoring service and the BPfone® blood pressure monitors in addition to the HEARTLINE monitoring service using the Portable ECG Recorder. MDM has a marketing association with Health Communication Network (HCN) in Australia which offers access to more than 14,000 of the 23,000 active medical care practitioners listed who use the HCN service.

    While Medical Monitors expects to be cashflow positive in the third quarter (calendar year) and make profits by end 2004, an investor community, buffetted by a number of announcements downgrading profits, is likely to take a wait-and-see attitude. However, the company's products and its impressive marketing, manufacturing and partnership deals position it well.
    The value of internet access to all facets of the health care industry becomes increasingly indispensable, a hi tech blood pressure monitoring device whose information can be transmitted over the internet via a sophisticated computerised receiving system - at the forefront of its field - would certainly seem to have a bright future.

    MEDICAL MONITORS - A SNAPSHOT

    Medical Monitors provides both ECG systems and high blood pressure monitoring systems that are ahead of the field. The automated ECG and blood pressure monitoring devices can be downloaded any time of day or night by a highly sophisticated computer receiving system.
    MDM has several patents pending in the international phase covering various aspects including low battery usage and transmission of information from the blood pressure device.
    (Batteries in the MDM system last two to three months, vs 2 to 3 days in other monitoring systems).
    The blood pressure monitoring market is 4 to 5 times as big a much larger market than the ECG, with control of blood pressure important to delay the onset of heart trouble and other illnesses.
    In the US there is a large consumer market as well as the doctors clinic, pharmacy and hospital markets that are universal in the rest of the world.
    Medical Monitors products are TGA listed. Sales in Australia are expected to be 4,500 units in 2002, with each unit of sale including at least one year's service. Initial supplies to the retail market are expected in 2003 via pharmacy outlets.
    Revenue from Australia is forecast to be $1.4m in 2002.
    In the US, MDM forecasts 550 units will be sold in 2002, expanding the year after.
    Pharmaceutical companies will distribute the units as promotional products to doctors whose patients are testing their drugs, with expected sales to this market for 2002 forecast as 5000 units.
    In the UK, Medical Monitors has an MOU with the Primary Care Group Plc and is finalising a 50/50 j/v. The j/v will provide the WELLness monitoring service for blood pressure.
    Primary Care Group provides IT based services in medical management to local health authority primary care trusts within the National Health System. PCG has developed a number of management programs aimed at improving health cost outcomes for the local Primary Care Trusts in meeting their National Health Schemes budgetary targets.
    Total profit contribution from the UK in 2002 is forecast as $2.3m.

    The products
    MDM's Personal ECG recorder (PER) has been commercialised and is sold in Australia.
    It can be comfortably worn by the patient daily and is activated by the patient when symptoms occur. The recorder also has the unique ability to automatically detect abnormal cardiac rhythm and make an auto trigger ECG recording which can then be transferred by telephone or internet to the centralised computing facility for analysis.
    This central monitoring service owned and operated by the company in j/v with HCNcalled the HEARTLINE Monitoring Service and accessible 24 hours per day.
    Cardiologists qualify the readings and the report generated by the service provides feedback to the prescribing physician. HEARTLINE has established an 85% diagnostic outcome, well beyond that of the only widely used Australian alternative, the Holter monitor.
    The second product, the Micro, for general and post surgical monitoring of a patients heart will soon be distributed directly in Australia and the US. It is the world's smallest transtelephonic ECG recorder transmitter, about half a credit card in size. The Micro was awarded an Australian Design Mark for innovation.
    The third product, the Station (Cardiocom ®) automatically receives the ECG recording by telephone and then analyses the information and produces a cardiac diagnostic report.
    It has significant application with other diagnostic vital signs recorders/monitors.

    Some further notes on marketing:
    In Australia
    *In November 2000 Medical Monitors integrated a HEARTLINE Monitoring System flag into HCN's Medical Director (approximately 85% of computerised general practices use Medical Director to write over 50 million prescriptions each year in Australia). A screen flashes the HEARTLINE Monitoring System onto the Medical Director system if the GP accesses the patient records and the patient has an existing heart condition and has been prescribed drugs relating to a heart condition.
    If the GP then believes that the patient requires a diagnostic ECG, the HEARTLINE Monitoring System can be accessed. It is fully automated.
    The HEARTLINE service attracts Medicare reimbursement.

    In the US
    In the US WELLness Monitoring, will provide internet based e-health services including the duplication of the Australian HEARTLINE Monitoring Service, similar to the alliance with HCN in Australia, using the Station.
    *WELLness Monitoring intends to also establish alliances with Walmart pharmacy outlets and Kaiser the single largest HMO in the US accounting for approximately 60% of the HMO market.
    *MDM's two senior executives in the US manage the WELLness monitoring program and look for other joint ventures.

    THE MARKETPLACE AND THE COMPETITORS
    *In Australia the only significant out of hospital cardiac monitoring procedure so far has been the Holter monitor recording system. Over 65,000 Holter procedures were performed in Australia in 1998. The market size of Holter monitors in Australia is approx $6.5m per annum, with its growth associated with the Medicare reimbursements available only to specialist physicians/cardiologists.
    The medical service provided by MDM's HEARTLINE also attracts Medicare reimbursement.
    While the Holter device is about the size of a paperback novel, MDM's PER is matchbox size and unobtrusive.
    In the US, Omron is the number one supplier of do it yourself blood pressure monitors with ADE the second largest supplier.
    ADE sold 1.2 million blood pressure devices in the past year. Interactive health care sites in the US that provide virtual self assessment have been doing extremely well. According to Media Metrix in Feb 1999, BetterHealth and IntelliHealth averaged 700,000 visits per day. There are approximately 15 million people being treated for hypertension in the US.
    Medical Monitor's product the Micro, which is used for general and post surgical monitoring of a patient's heart will be sold to patients, and becomes their property. The patient will also take up a subscription with a 24 hour professionally operated monitoring and call service.
    Valutech in its Independent Specialist Report in the Information Memorandum last year included among competitors LifeWatch Inc who with its Israeli parent company Cart Guard have developed patented technologies for portable, user friendly cardiac monitoring devices which include wrist worn ECG looping recorders with extensive memory capabilities and a personal pacemaker pulse monitor. LifeWatch has been awarded a three year contract by Provider Select to make its cardiac monitoring and diagnostic services available to more than 44,000 physicians in the US.
    In Australia, Micromedical Industries has developed a hand held ECG monitor and recorder capable of acquiring and reviewing single lead, six lead and 12 lead ECG and providing a capability for downloading the data over the internet. The product is an expensive PC based unit and is limited to application by physicians.
    Directors:
    Dr Jerome Goldberg non exec chairman
    Dr Allan Shell, MD and chief medical officer has over 23 years experience as a medical practitioner in Australia and the UK.
    Harry Platt, exec director, more than 20 years experience in the development and management of technology projects.
    Vlad Jankov, techinical director , more than 18 years experience in medical hardware, software engineering and project management.
    John Genner, non exec

    Major shareholders:
    Directors hold about 30%, directly and indirectly

    (authors of article above stated that they held MDM shares)
 
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