For many here they will not like to read this again from ASX...

For many here they will not like to read this again from ASX Longtail and be reminded of the facts of where ADO's Nano Glue sits in the 'margin chain' and pecking order as a platform technology for Dx whether it be POC or more traditional pathology labs.   CB has nailed this 'elephant in the room' here re ADO's market prospects.

As an example Bangs sell their beads to a number of IVD suppliers and these beads make up a fraction of the cost of a test (eg. I'm talking about $0.0013 per test for a test that costs 'all-in' royalty stack included of approximately $5.00 to $7.00) .  Note that is 0.0187% to 0.0261%.  This is the number upon which ADO might be able to charge a small single % royalty.

Food for thought here to all those long and wrong ADO know that it has gone back to the core business post DiaSource.

Caveat emptor !

Excerpt from ASX LongTail below.....

Even if ADO has in fact done a deal with Philips and the “revolutionary” Minicare system based on the astounding “Magnotech” technology (yeah, no marketing there) incorporating ADO’s technology, who cares? You are still not going to get rich. By the way, anyone who has ever wielded a pipette in a laboratory (and I will be the first to admit, I am not personally that accomplished in terms of lab skills) knows that this kind of magnetic bead technology is neither here nor there. Philips is using concepts that have been around for at least a decade – the magic of Philips is in their productisation and their consumer marketing. Unfortunately most ADO shareholders don’t seem to get this.
So let us look specifically at the widely discussed troponin Minicare application.

Let’s ignore the existing players in the high-throughput testing area – like Siemens and Roche (both of whom have about a 30% market share). Let’s ignore some of the small players that already have approved products in the troponin PoC space (like Trinity). Let’s be SOS-style evangelists and take the position that emergency room / ambulatory applications for troponin testing (and maybe a few other things like CRP, etc.) is an exclusively accessible $350m global market (out of a $1.2Bn market, inclusive of centralised testing).
Now make a few very “reasonable” assumptions:

• That $350m addressable market is available today. Hmmmm…
• Philips does what Philips does … and becomes a top-three player, and captures 30% of the PoC cardiac biomarker market. That would be a stunning accomplishment by the way. Let’s call it a $100m business.
• We can ignore that this will take between 5 and 8 years to accomplish and let’s also be kind and forget about the time-value of money or the investment $ that need to be recovered.
• Assume that in terms of the intellectual property stack, less the machine, the reagents, the magnetic doo-dah system, etc. ADO manages to pick up 1% of net sales as a royalty. No, dammit, let’s be optimistic and imagine that they do a phenomenal job of inserting themselves in to the patent stack for the product and pick up 3% (that would be amazing for a surface chemistry by the way).

That’s THREE MILLION DOLLARS OF REVENUE.
Now let’s ignore profitability and just focus on the top-line. If ADO were PerkinElmer, they would have a market cap based on approximately 12 x revenue (keep the math simple and take 2014 GAAP top line as $500m). This is a reasonable benchmark for a life-sciences company. In this scenario, at steady-state, the valuation contribution of a Philips deal to ADO would be USD $36m. As an approximate rule of thumb.
With a current market cap of AUD $67m, I think it is fair to say that the company is overpriced. If you apply a reasonable NPV (with a discount factor suitable for a growth-stage company) and generously allow that full market capture will happen in 5 years, the story is even less compelling. If anyone is confused by this and trades on the stock market but doesn’t know how to use Microsoft Excel, send me an email and I will send you a spreadsheet (DYOR).
Now both the SOS and the Whinger will tell you that I have this wrong, that Philips isn’t the only deal in town, that ADO has a veritable pipeline of partnerships just waiting to be disclosed at the appropriate juncture. Unfortunately, I have seen exactly ZERO proof of this other than some dodgy comments from punters on HotCopper, who have allegedly had “wink wink nudge nudge” suggestions from the CEO. We don’t even know if Philips gives a shit about ADO technology, the only real evidence we have is an accidental comment a couple of years ago and some keen correlative shenanigans around the timing of press releases and marketing information from Philips.

The bottom line is this.

One day, ADO may indeed pull off a collaboration for its technology. It may even be a “big one” as far as top-line device/consumable sales go. But because it is a platform technology, and because its “contribution” to an overall product will be fairly minor, the “piece of the pie” for ADO is going to be inherently small, and it is going to take some time to get there.