Hi 123enen,You've asked specifically why a prospective partner...

Hi 123enen,

You've asked specifically why a prospective partner would wish to consider Vitrogro for commercial purposes. I'll make a few points.

1. The direct costs globally to treat both venous (80% of the costs) and diabetic ulcers are estimated to be in the several billion dollar range. This is not small change to any company, no matter how big.

2. In most areas of medicine (and I'll argue that this includes ulcer treatments) you'll find that 10-20% of the patients soak up 80-90% of the total cost (revenue to the medical provider) to treat. This applies from areas as diverse as emergency admissions to diabetes.

This is why I mentioned in an earlier post that not all ulcers are created equal. Some patients will present with an ulcer that will take all of two weeks to heal at a direct cost of no more than $100. There's no market here for Vitrogro.

Other ulcers on the other hand, if they're serious enough and last long enough, could push the direct cost to treat past the $10,000 mark. Here compression bandages, dressings, etc act more as simple wound covers than as any healing agents. This is where there is a clear and compelling need (demand from the patient) for superior treatment.

Therefore I would argue that the 50% of ulcers that heal within an average period of six months are unlikely to account for 50% of the costs (and therefore revenues and profits) in treating venous ulcers. It's more likely that these faster and easier to treat ulcers account for no more than 15-25% of the overall treatment costs and therefore treatment revenues and profits to the medical providers. The other 80% of costs (profits, etc) of this very large market is where TIS and it's Vitrogro product are aiming at.

3. Now this begs the question. Why introduce a new product that could cannabilise an existing product line, particularly and cynically when the existing treatment is having precious little impact on these hard to treat patients yet at the same time you're still obtaining substantial revenues and profits from servicing them?

Answer: The answer of course is that it depends. The value of Vitrogro will to any particular company be composed of both the profits derived from the sale of Vitrogro minus the profits lost through product cannabilisation (if any) due to faster healing times.

To me TIS might find that the most receptive companies to commercialise Vitrogro may not be those with the largest presence in the ulcer care market. They afterall are the ones who have the most to lose from a successful competitive treatment.

But those companies with limited exposure to wound care (ulcers in particular) would almost certainly see significant commercial value in any treatment that offers something more than merely bandages and a good luck wish to this very large and thirsty for superior treatments market. And it's a market that remains essentially untapped.

4. Finally, you asked why a prospective commercial partner would get all excited over a complete healing rate of "just" 16% after 24 days. Wrong people to ask. Ask the patient whose had an ulcer for a year or two on what they would think of a 16% chance of complete healing over a few weeks and they'll tell you that it sounds like nirvana. And they'll pay for the chance to go there. Marketing isn't about what you think you're selling, it's about what the customer thinks they're buying.

Cheers