Ann: Ellex Sales Trading Update, page-22

Hi Dunjo, I just had a look at VTI and here's my opinion on them.

The key product that will determine their success is their NatureVue Multifocal contact lenses. When I read up about it, I believe their "neurofocus technology" is based on a new multifocal design that was designed from memory by Brian Holden Institute in UNSW (But I could be wrong). The problem with the current market multifocal design is that it doesn't work for everybody and the success rate is below 50%, so I believe these NatureVue lenses could become the market leader if it shows to have a better success fitting rate. The only thing I couldn't find if they have a patent on these newer designs, and if they don't what will stop bigger contact lenses companies like Alcon, Coopervision, Bausch and Lomb to offer something similar.

Furthermore, in theory, the NatureVue multifocal could be used as a myopia progression management but I don't see a strong adoption rate as there aren't any clinical studies to suggests their new multifocal designs slow myopia progression. The only available studies are based on the current multifocal designs and even that doesn't show strong evidence for it. The new paradigm in which we are currently heading towards is atropine drops. So in summary, don't bet on many practitioners to use these lenses for this particular reason.

Also, I find it hard to recommend their spherical and toric lenses to patients. I don't see any key differentiator for these lenses compare to other available lenses in the market. The key differentiator I look for is how many hours for the lenses to dry up and costs. All the studies on these lenses are done by them, not by a 3rd party, therefore I wouldn't completely trust what they state on their website.

Overall, I don't VTI will be a wise investment at this current time. First of all, they are an unknown company that's competing with billion dollars companies. Second, of all, they only have one product they could be a lot more superior than others - that is their multifocal lenses. But I only see one market for that, and that is only the presbyopia market, not the myopia control market - but this could change if there strong evidence for their use but it could be many years away before that happens.

For me, I would prefer if VTI license out their designs so we could live off the dividends, but if I were to invest in them, I probably will go for an acquisition play, which I could see like many other small contact lenses maker companies before them. E.g Sauflon Pharmaceuticals.

Cheers