Thanks Gareth for sharing the investor stream chat.
This helped consolidate my thoughts on the company's progress with regard to future sales of EuGeni. I am very satisfied with their strategy in an industry that has extremely strict requirements and an extensive amount of due diligence. I regard the company's progress to date through these challenging times to be excellent and well thought out.
As Derek stated in the investor chat, the progress with saliva testing is difficult because of the likely amount of contaminants in the mouth. If saliva testing was relatively simple, then our testing authorities would be using it for PCR testing. The nasal swab provides the best results because the samples are less likely to be contaminated. I am not that sure that the saliva testing offers major advantages over nasal swabs anyway.
Anteotech's target market is medical facilities because it is important that proper practitioners use the product. I am sure most medical staff would prefer to take nasal swabs because there is likely to be less contamination with the samples. While saliva testing might be more appealing to the end user, I don't think too many patients are too worried about the nasal swab. Therefore, I am not that convinced that the saliva swab would give the company a significant competitive advantage. Sure young children might not be too happy with nasal swabs but I doubt they would be all that comfortable with a saliva swab that needs to be taken from around the tonsils either.
One only has to look at the number of people turning up to have PCR testing each day in NSW and Victoria with the current outbreaks. They are all using nasal swabs and the main complaint coming from the community relates more to the time to get results. Hence the media is pushing for rapid testing as most people want the results now. I understand that most people would prefer saliva testing but it doesn't appear to be the main source of complaint from the public being tested. It is more important to get tested than complaining about a nasal swab test.
While I am still confident that the company will be successful with its saliva testing, I don't consider it will offer a significant market advantage in the market the company is targeting.
Selling to the medical facilities and not the end users requires quality assurance and this is where I consider Anteotech is going to obtain a competitive advantage.
If the product was put in the hands of an end user that did not take the swab sample correctly, then the product would soon loose credibility.
With countries now opening up and achieving vaccination targets, it will not be long for those countries to stop providing testing sites and say to the population, please go to your doctor or the hospital for testing as the government can no longer provide this level of support. Medical facilities would much rather have rapid testing devices available, otherwise they would have to go through the cumbersome PCR testing process. This is where the competitive advantage exists and justifies Derek's confidence in meeting supply.
Engaging distributors to sell the company's product is the right strategy. These companies have the staff and expertise to sell in the countries where they have all the contacts and communication skills to sell the product. They signed agreements with Anteotech because they are also confident of selling the product.
The market didn't over react to the announcements and I am sure that if the market read delay into the announcements we would have seen a 50 to 100% drop in the share price.
Countries that are now opening based on certain percentages of the population being vaccinated are reconsidering their strategy and still encouraging testing and full vaccination. However, I don't think it will be too long before they say enough is enough and stop mass vaccination centres and testing sites and force the testing and vaccination on local doctors, pharmacies and medical facilities. Affordable rapid testing devices will be a major advantage for the medical profession and end users particularly if borders open and testing is required before travel.
ADO Price at posting:
23.0¢ Sentiment: Buy Disclosure: Held
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