John Kelly comments in March about share price. It's already been posted here, but worth reading again.
Why do you think the market’s been not quite as excited as you might have expected?
I think the Australian market likes household names and products that do well locally. More than 90 per cent of our business in customers and sales are overseas and I don’t think that’s fully recognised. I think the disruptive nature of our technology is also not fully appreciated in Australia because Australia’s still a very slow adopter of point of care testing. Australia has a very entrenched incumbent lab market that’s got influence over reimbursement, influence over public policy as we’re seeing with Australia’s lack of acceptance of rapid testing. Whereas, overseas rapid resting for COVID is much more prevalent. I think there’s structural buyers in Australia that mean that people aren’t really aware of the impact of point of care.The US has gone gangbusters now on telehealth and the delivery of health into the home and the diagnostics underpin that. I think that’s not really on most investors' radars in Australia and I think they’re playing catch up. The strength that we provide in the market are not fully appreciated in the Australian healthcare market because of the way it’s structured and I think that’s why we get a much more exciting reception from overseas funds than we do typically from local funds who I suspect don’t appreciate the disruptive nature of our technology.
Has Access Bio actually put in an order for some?
Yes, they have, they’ve ordered the first two containers and they’re obligated to order up to two million units between 9th and 30th of September.And can you tell us the unit price?Well, no, we haven’t disclosed the unit price but we have said that it’s a revenue share which means that we get a certain guaranteed minimum and that guaranteed minimum is equivalent to the pricing that’s being secured for the Engie contract in France. But in addition to that, we also get a share of the upside beyond that minimum number. So if they can get a premium for getting into a point of care channel or into a premium contract, then we also get a bit of upside on that. Importantly, that agreement also has them co-branded, so that means that the Atomo logo is on the box and we’re starting to get our brand recognition now into healthcare clinics in the US.
Well, since it’s a take or pay, can’t you tell us how much you’re going to make out of it?We haven’t disclosed that to the market and we’re not going to…
It’s definite money, isn’t it? Why can’t you tell us?
Well, it’s definite money, but it provides a competitive position to our other ongoing contracts. We have a number of ongoing engagements in the US for access of our platform for other applications and I think if we were to disclose some of the granularity around that contract, it might prejudice our commercial engagements, I’d rather not.Okay.
Are we talking in the millions of dollars or the hundreds of thousands?
'We’re talking in the millions.Right, okay. Well, that’s significant because your quarterly revenue in the December quarter was $2.7 million.Yeah, we’ve announced on some of the earlier announcements kind of what the Engie numbers look like, so I think if people unpack that, they can probably get a ballpark. But I think once we put our June 30 numbers in our quarterlies, I think that’ll start to become more obvious as we get that US revenue disclosed.
Right, so it’s fair to say that 11 years on from starting the business, you’re now starting to get somewhere, right?
Yeah, and developing a concept into a product and launching it globally from Australia as a private company is no easy task and it’s taken time to develop the world’s best technology and to get it proven for HIV and to get World Health pre-qualification and to sign a global partnership arrangement with a large pharma company and off the back of that, start to roll out OEM contracts, pivot into COVID, sell two million units immediately in COVID and move into the US market. It’s been a long journey and that’s how medical device companies grow. ResMed took time to get there and so did Cochlear. There’s no easy answers to becoming a global leader in what you do, but we feel like we’re well on the road tonight, doing that and I think with the capital that we’ve got and the visibility in the market and the partners overseas, the hard yards have been done and we’re very excited about the future.Great to talk to you, John, thanks.Yeah, thanks for your time.
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