My report from the AGM

G'day all,

I apologize in advance if the following rambles but I am going to try to pass on my impressions and make some sense of my notes. I won't bother repeating what is in the address as you are able to read it for yourself.

Firstly, one of my main personal reasons for attending was to see the Directors face-to-face to be able to make a personal assesment of their sincerity, honesty etc. What I have to say is that these guys are totally 100% focussed on what they are doing. They seem to have a very clear understanding of what they are doing - not only from the obvious technical point of view but also from the view of building a successfull company. Not inconsequential is the observation that they really seem to be enjoying what they are doing.

I did get the opportunity to very briefly meet both Dr Rothell and Dr Radford after the meeting and they both came across as "nice" guys. Pesonally, I am 100% convinced that they are not pulling any shifty business against us, the shareholders. Somebody mentioned to Dr Radford a comparison with the shonky "dot-com" operators and his answer was something like "why pull something like that when the alternative is to build a successfull company".


I mentioned earlier that these guys are totally focussed. That strength of direction came through in the sum of their presentations and has assisted me in understanding a little more about where we are going.

QFTBMk2 is going to be an absolute winner for us and I will come back to that later. The company however is totally commited at this stage to the building of sales of QFTB(Mk1) in the US. This test has been designed and packaged specifically for that market. The US has never used the BCG vaccine (although many immigrants have been vaccinated). A question that didnt get asked but should have been is whether they will ultimately run with 2 separate products or use Mk1 in the US and Mk2 in Japan. My feeling is that Mk2 will probably supercede Mk1 in all markets - assuming the cost of production is similar. From the preliminary figures it seems that Mk2 is more accurate that Mk1 in all cases (not just BCG vaccinate dpatients).

Mark 1 is going to turn us into a profitable company. It seems to me that it is important to understand that. The company are not blowing smoke about some "golden future" to disguise a less than expected present. All indications are that Mk1 is running to plan and that all prospectus forescasts will be met.

I think it has already been mentioned that the Mk2 timing seems to be moving more into the broker (Lodge) prediction timing range. The statement made at the meeting was that the first regulatory approval may be as soon as 1 year and sales may be as soon as 2 years. As they did for Mk1, the CDC are funding testing of Mk2 (both in Vietnam and the US). The CDC are very much behind Quantiferon.

Dr Rothell was asked about the potential for the arrival of competing products. Part of his answer was very telling in that he told us the CDC are funding multiple tests of the Quantiferon technology thropughout the US but are not funding any other tests at this time

It seems by putting together a number of points that QFTBMk2 will be used in the US as there was talk about FDA approval. Dr Rothell said that they are hopefull that they may get "501k" approval which, I believe, is a sort of extension or variation to an existing FDA approval. He also said that if that turns out not to be the case then the approval should be quicker that Mk1 anyway because the common base technology means that 2/3 of the paperwork is already done.


CDC guidlines. As we have previously surmised, it was confirmed that a number of US sales are dependant upon the CDC report. Dr Radford confirmed that the report has been written and is currently with the CDC Publishing Division. CST have no control over when it will be published but he said they are hopefull that it will be within a month but we may have to wait up to 3 months.

As Ridge has already mentioned some small sales have been made in the last month. It was emphasized that these are small sales. They expect sales to be flowing in quantity by April/May 2003 and to reach profitability by end 2003. Incidentaly, someone asked the question about the often mentioned 700k sales breakeven point. Dr, Rothell said that in fact the breakeven point was substantially less than that.


Ok. Ill leave it there for the moment. If I manage to glean more from my notes or memory I will pass them on. I am happy, if able, to answer any questions.

Finally, I came away from the meeting feeling very positive and in fact picked up a handfull more shares yesterday.

I'm not very good at estimating numbers but I would think that there were 200+ people at the meeting.