$10m mc bio potentially worth $500m

The story behind GBI’s technology is truly compelling. They haven’t had the best track record but the company has been making progress and I believe 2014/2015 will be the turning point for GBI under the guidance of new Chairman Lou Panaccio (appointed in 2011).


Products:
- AmpaSand Multiplexing Platform: Core IP/technology used to develop a diverse menu of multiplexed test solutions for the $4BN global molecular diagnostic testing industry. Estimated “$50M revenue opportunity from AmpaSand platform based tests that could be worth over $500M US to a global IVD partner” (AGM 2013)

- Sirocco automated Platform: machine specifically designed to automate diagnostic test derived from the company’s own AmpaSand Multiplexing platform.

- Q-Sand Platform: GBI’s next generation ultra-sensitive testing platform targeting “POC” testing market


History:
GBI had a pre-commercial agreement with a “Top 10 Global Diagnostic Company” back in 2010. The due diligence went on for 15 months before the partnership CEASED. At the time of interest, GBI focused on commercializing diagnostic tested derived from its unique AmpaSand multiplexing platform. The major setback wasn't due to the company’s core technology/IP but the “LACK OF AUTOMATION” in running those diagnostic tests.

In late 2011, the company addressed the problem by developing a low-cost automated platform (The Sirocco) specifically to “AUTOMATE” diagnostic test derive from the AmpaSand Multiplexing platform. Sirocco is a high volume testing instrument well suited for high volume diagnostic laboratories (more tests per run = more revenue $$). Just as a comparison, market competitors Filmarray & AD-8 are low volume testing instruments more suitable for small clinical settings (e.g. local doctor/small pathology labs). BioFire Diagnostics (developer of Filmarray) was recently bought out for US$450M (September 2013).

Filmarray - http://www.youtube.com/watch?v=7Vq4S9_EHHg

Sirroco (GBI) - http://www.youtube.com/watch?v=m0O-WwPgmO4


Key points from the 2013 AGM presentation:
- Q-Sand (GBI’s latest technology) can revolutionize traditional approach to MDx with ability to develop ultra-sensitive Point-of-Care (POC) tests. “IVD companies will NOT ignore the potential of POC market – worth Billions in the global IVD market!!!”
- Recent acquisition of similar companies range from US$200-500M (some deals were PRE-REVENUE!!!)
- Genera has over $50 million revenue opportunity from AmpaSand platform based tests that could be worth over $500M to a global IVD partner
- Genera will decide on optimal path forward WITHIN the next THREE to SIX MONTHS which may involve one or a mix of the possible commercial outcomes (outlined below).

Possible commercial outcomes in the next 3-6 months:
- IVD company acquires GBI
- IVD company acquires rights to AmpaSand Platform
- IVD Company and GBI develop JV


Conclusion:
GBI is in a strong position to capitalise on its IP & technology in the near future. The company is required to demonstrate significant value of its IP & tech to substantial global IVD companies. Direct partnership with diagnostic laboratories will facilitate future discussions with global IVDs. Current discussions with several potential partners have been proceeding well (commenced 6 months ago). “GBI is confident of demonstrating significant platform value by end of Q1 2014.”

Company facts:
>> Market Cap = ~10 Million
>> Outstanding shares = ~ 84 Million shares (tightly held – low trading volume for the last 5 years)
>> Cash position = not much cash. Operating cost is backed up “SMALL” placements (Assume this management’s way to keep this registry tight)


Disclaimer: info posted is from my own understanding of the company and may not be fully accurate.