peninsula capital article on tis

Tissue Therapies
08 October 2011

Tissue Therapies (ASX code TIS) is a feel good story. The patented technology targets slow healing and no healing open wounds such as venous and foot ulcers.Younger people are often not aware of how many diabetics and elderly people suffer from the pain of lower limb ulcers caused by poor circulation, excess of blood sugars, diet, alcoholism or smoking. Sometimes several of these conditions combine to make healing difficult and in some cases impossible. In the UK over 2000 lower limb amputations occur a year - an unnecessary cost to the National Health System. The cost of immobility afterwards adds to the cost.

Peninsula is very confident that TIS has the right ingredients to bring VitroGro to the market effectively within self set timelines. As the trial results are unambiguous VitrGro should have no difficulty passing pending European approvals which will be quick since it will be classified as a non-harmful "device" for external application.

Just as importantly the CEO Is a former senior executive with Smith & Nephew, the large UK bio-med research and distribution group. As a former GP and surgeon he headed up its surgical products division and so had direct professional experience of  wound treatment practice.

Typically companies taking devices and drugs to market enter a crowded international field. While there are a number of competitors working on broadly similar lines, none have results like these, or have products this close to distribution.

International sales will be helped by the cost and flexibility of VitroGro. It needs application only once or twice a week, is low cost and relatively easy to administer. We also like the prospect of the broader market for wound treatments. Burns, cosmetic surgery and the more intractable post operational wounds provide a wide additional market.

Given the professioanl reaction to date, a fair expectation is thet VitroGro will take a market lead quickly on grounds of cost, effectiveness and also for the immediate impact on national health budgets at this time of severe constraint. At any one time anythng from 70,0000 to 150,000 people are being treated for lower limb ulcers in the UK and if this tecnology reduces this by a third, the impact is significant. Globally that means substantial revenue.

Tissue is also likely to come to the attention of companies like Smith & Nephew or Johnson & Johnson as as it offers a long tail income stream and could get global distribution more quickly if incorporated into a international biomed giant.

One thing we can be sure of: the Australian market will discount Tissue until an off-shore bid arrives and then there will be the usual lamentations at the loss of local technology.