Tiresias; Unleash the Power

"Unleashed the power of our platform digital technology"

Camile Farah, CEO Optiscan Imaging

My friends,

Tiresias is sometimes bemused when he surveys the vagaries and valuations in the share market. At close the market this week, Optiscan’s capitalisation was $AUD50.1 million. At the end of the current capital raising Optiscan will have $19.5 million in cash. It is in the process application to the FDA, that organ of the Washington bureaucracy, for the unique in vivo, cellular level 3-dimensional, confocal, laser microscope, for the oral medicine clinic sur diagnosis of oral cancer and preclinical lesions; for the operating room for all oral surgery; for post-operative surveillance cellular. Slightly foiled and delayed by the mega bureaucracy that is the FDA in its first application, not because of the instrument but by the ”incorrect pathway”, ie, the incorrect form which they were actually advised to use. In Tiresias’s humble opinion, with hopefully the “right form” now completed, FDA approval should now be a forgone conclusion. But, of course, one has to wait on the dead hand of the work to rules bureaucrats sitting at their screens, trying to justify their miserable existence. But this is just too big and too important to delay for too long.

Tiresias was musing on these matters, when he happened to read about another company which is at present soaring, Neuren Pharmaceuticals. This is a field and condition Tiresias’s alter ego understands very very well indeed. Neuren Pharmaceuticals had signed a partnership deal with an American company, which no doubt facilitated its FDA approval for Neuren’s maiden drug, for a treatment of a very rare condition, Rett’s Syndrome. Now, at close of market Neuren Pharmaceuticals is capitalised at $AUD1.5 billion, yes billion. That is a handy capitalisation. That is 30X the capitalisation of Optiscan. Well, Tiresias, in his humble opinion thinks “the Market” may have this somewhat back to front. Not to take away anything from Neuren, ands with due respect its hard work, its joint venture partner, it’s FDA success, the promotion it has been able to mount, or the efficacy or otherwise of its drug. He also does understand the magical effect of the words “FDA approval” and the difference of this to “FDA Application” that justify the market action. However, Tiresias has to point out a tiny detail which questions the “wisdom of the market” and its” valuations”. But never mind that, say Tiresias’s young broker friends riding the latest rise.” Neuren have an FDA approved drug”! One need say nothing more. Nothing else matters, does it. This drug is a treatment for Rett’s Syndrome. Not a cure, “thankfully”. And what exactly is this Rett’s Syndrome. Rett’s is an unfortunate genetic disorder, one of thousands of rare genetic disorders. It is very rare, affection almost exclusively girls, one in 20,000 live female births (that’s something like one 40,000 to 50,000 all births). That doesn’t impugn the veracity of the “earning potential” in the recent Neuren announcements to the market? And why should it? When you on a roll, stay with it. “The trend is my friend”, “Buy low sell high, that’s my motto!”. Oops, buy low? Sell High? “Buy sheep, sell deer.”. Well you get the idea. Will Neuren reach $3billion before Optiscan reaches 16 cents. Well, the market certainly appears to think so.

But enough with Neuren and back to Optiscan, and again Tiresias wishes only the best to his friends who might hold Neuren shares. Let’s just look at the oral market for Optiscan. Five percent, and rising, of the population have possible precancerous oral lesions who need examination and microscopic examination. That’s 1.5 million people in Australia. And Rett’s syndrome in Australia, about 5 to 10 per year. Hmm?
But the oral market for Optiscan is small beer. It’s just the beginning. Waiting in the wings breast cancer surgery. The study, now under way Melbourne, are coming. One in 7 women get breast cancer; that’s 2 million in Australia, and all will have surgery, and all will need Optiscan’s microscope, but that just a fraction of course, because 10X as many women have breast lumps who will need surgery and Optiscan technology. But again, that's not all folks. As outlined in the prospectus Is in vivo Gastro-intestinal pathology. How many of Tiresias’s friends have had endoscopy? At present to have any microscopic examination of any spot in the upper or lower gut the endoscopist has to pinch with forceps and then tear off a piece of the gut, hold the tissue in the pincers, pull it up the biopsy channel of the endoscope, drop it in a little jar of preserving fluid, taken to pathology, have it stained sliced up and then examined by a pathologist. This takes about 2 weeks. It risks bleeding it risks perforation of the gut, a very serious complication. Tiresias sees the day that endoscopies without an Optiscan endomicroscope in the endoscopy suite will unconscionable. As his friends know, Optiscan has a flexible endomicroscope, already tested, proven, and ready to go. Tiresias eyes $50 million capitalisation. Tiresias understands that dropping share price brings out sellers and a rising share price brings out buyers. Well of course. My friends, Tiresias sees, and hopes his friends see with him.

"The things I have seen you people wouldn't believe", Rutger Hauer