obj blog link, page-4

Hi Coppertop01

I came upon a post on another forum here at Hotcopper and thought that it had some relevance to OBJ so decided to run the same exercise. The poster was hottod #7582012, so credit for this idea should go to him. The idea relates to an article on the ASX website here and relates to “Valuing Bio Tech Stocks”, there are 10 points to consider so I will evaluate OBJ against these 10 points. All relevant information is sourced from OBJ’s announcements and from OBJ’s website. All can then draw their own conclusions.

Stage of development: Assess what stage of development the company is at in order to estimate the time frame in which earnings can be expected. The process to commercialisation can be long - the development of a successful new drug can take many years from the first stages through to distribution. Companies with a drug candidate in late stage clinical trials would be expected to earn revenue sooner than a company with drugs in the early stages of development. This does not mean that later stage companies are necessarily better investments over the longer term - they are just closer to generating income and so are probably less risky.

OBJ – Stages of Development:
• As part of the Company's research programs, over 25 different drugs and compounds have now been tested to determine their suitability for magnetic enhanced delivery. The Company is now defining product applications that it wishes to pursue into the developmental phase. OBJ has held a series of discussions with selected international pharmaceutical and cosmetic companies with a view to engaging with the most suitable partners to further develop the selected product applications (2009)
• Statement of Intent from International FMCG Company (08.02.2010)
• Strategic Alliance with Global FMCG Company (28.09.2010)
• Material Transfer with 3M – OBJ conducted a program with U.S manufacturer 3M and as a result OBJ is now able to offer to its potential partnering companies, the means of manufacturing its patches & applicators to the highest standards in the industry. (30.11.2010)
• Glaxosmithkline & OBJ in Collaborative Development Agreement (17.05.2011)
• Pain Patch Development Program (16.08.2011)
• Joint Development Agreement (JDA) Global FMCG Company to secure Access rights for Beauty Care (25.10.2011)
• U.S patent Granted (03.11.2011)

Product pipeline: Look at how many products the company has in development. A company that diversifies across a range of product types will be less volatile than a company with only one product in the pipeline. Companies that have a spread of drug candidates through each trial stage are probably less risky.

OBJ – Product Pipeline:
Partnering Services
• Transdermal and Intra-Dermal Drug Delivery
• Therapeutic and Dermatological skincare
• Cosmetic and non-medicinal active ingredient and peptide delivery
• Oral Health strips, applicators and advanced technology tooth brushes
• Haircare enhanced brushes and applicators
• High Penetration surface hygiene technologies
• Fabric and Carpet cleaning technologies
• Advanced industrial surface interface systems

Cash reserves: Early stage biotech companies can consume large amounts of capital for research and development, and may not report earnings for a number of years. For this reason it is important to look at whether the company has adequate cash reserves.

OBJ – Cash reserves: As at 30.06.2011 are
• $4,848,485.00
• Burn rate approx <$1,000,000.00/year
• Partner Funded Research

Quality research and development: Understanding the research activities and results of a biotech company can be difficult. Some factors that may indicate quality research and development include the award of government R&D grants, investment in the company by venture capitalists and interest in the company from industry specialists. Look at the reputation of the scientists involved, and for collaborations with respected research institutions.

OBJ – Research & Development:
• Collaborating partners – GSK,FMCG U.K, FMCG U.S, FMCG Global & 3M
• Bradford University – Dr Steve Britland
• AzoPharma (USA) NSAID Patch development and ex vivo efficacy study
• Modus Labs (UK) Oral Health - ex vivo enhanced uptake evaluations
• Rivers Diagnostics In vivo Raman spectrographic evaluation of Diclofenac delivery
• Queensland University Enhanced transdermal delivery of Nano-particles in vivo
• Curtin University Enhanced Di-peptide delivery ex vivo
• Murdoch University In vivo transdermal peptide vaccine study (animal)
• Curtin University Double blind human pilot study into topical
• Anesthetic delivery by Dermaportation
• First-in-man clinical study program in an oral health collaboration with GlaxoSmithKline (GSK) (2011)
• OBJ won independent Ethic Committee approval for the use of human tissues in our medical research which has allowed the Company to develop excellent working arrangements with local medical facilities to ensure that the supply of this key research tool will be maintained in the future. Access to sufficient quantities of high quality epidermal materials has already resulted in an acceleration of client sponsored programs and a number of studies into the application of magnetic micro array technology to the activation of cosmetic, depilatory and hygiene ingredients.
• The Company's International Partnering Manager, Dr Kevin Hammond presented the Company's technologies and partnering opportunities at the BioPartnering Europe conference in London on 11th & 12th October (2011). The presentation was used by Dr Hammond to further the Company's partnering activities in the pharmaceutical and regulated medicines field. Discussions with pharmaceutical companies resulted which are being followed up with a view to expanding the Company's activities in the regulated medical sector.

Regulatory considerations: Look at the type of Biotechnology Company and its products. Regulatory approval time will vary according to the type of product. Regulatory approval for devices and equipment in the healthcare sector is swifter than approval for prescription drugs.

OBJ – Regulatory Considerations:
• Homecare and Hygiene applications were new areas of consideration last year, but along with personal care these areas offer opportunities for a shorter time to market

Intellectual property: Biotech companies protect their technology with patents. Much of the value of a biotech company comes from the knowledge contained in their patents and staff. Patents for new drugs and therapeutic products give the owner the right to exclusive exploitation for a period of 20 years. When the patent for a prescription drug expires, other companies are allowed to begin production of that product.

OBJ – Intellectual property:
• U.S Patent granted (03.11.2011)
• The Company has undertaken significant expansion to its IP and Patent portfolios with the lodgment of 6 additional "Field of Use" patent applications covering the major commercial areas of interest to OBJ's partner companies and the progression of its foundation patents through to final examination in both the USA and Europe. These programs are designed to provide OBJ with broad exclusivity across key markets and to allow efficient and effective licensing across key market sectors (2011)

Platform technology: Platform technology has the potential to yield a range of many different drug candidates, as opposed to a technology that yields only a single or limited amount of products. Assess whether a company has platform technology, as it is generally more valuable and less volatile.

OBJ – Platform Technology:

eM Patch
• A film based micro-array technology ideal for patches, masks, dressings and other topical applications. The magnetic micro-array film replaces the traditional plastic backing layer imparting new levels of product performance with minimal cost impact.

Field in Motion (FIM)
• A magnetic micro-array film that is integrated into brushes, applicators and wipes captures the energy of motion of normal usage behaviour and redirects this to achieve new levels of product performance

Dermaportation
• A precision delivery system generating precise time-varying magnetic fields by an onboard micro-processor. Designed for applications where repeat applications, extended usage and multi-formulation requirements make a powered reusable device the best solution. Able to be implemented as a power-patch, a wand, an instrument or an iPod-like device

Markets: Think about what disease the company’s products are targeting. Look to see whether there are existing drugs to treat the disease, and what the estimated demand for the new drugs would be.

OBJ – Markets:
• Pharmaceuticals
Consumer Healthcare
Dermatological
Skincare
Cosmetics
Oral Health
Haircare
Surface Hygiene Applications
Fabric care
• GSK - Collaboration will cover a number of phases for both in vitro and in vivo testing and focuses on the possible development of products using our technologies in the $29 billion oral healthcare market.
• When clear business opportunities are identified OBJ is prepared to adopt a first-mover approach

Senior management and other key staff: Look at whether the management of the company has a good track record in delivering successful research milestones. It is also important to consider the commercialisation strategy of the company and the quality of scientific advisers. Strong financial management is vital given the early cash burning nature of biotech companies.

OBJ – Senior Management & Key Staff:

Mr Glyn Denison
• 30 years experience in international business development including 16 years in technology intensive industries. Glyn Denison is a qualified professional engineer and operates his own business consultancy advising companies in their development internationally. Mr Denison was one of the founders of the ERG Group and held several senior executive positions over the period from 1987 to 2003. These positions included President of the Americas for the ERG fare collection business and the New Business Development Director for ERG Transit. Prior to ERG, Mr Denison held several commercial positions with Bunning’s Forest Products (now part of the Wesfarmers Group).

Mr Jeff Edwards – Technical Director
• Founder of International Scientific, with over 20 years experience in managing new technology innovations. He is experienced in Production, Intellectual Property, Regulatory Affairs & Quality Systems. He has worked across a range of Medical & Technology fields with organizations including Pharmanet Group, Omni Lifesciences, Colltech Australia, IBM, NCR & Intellect Electronics.

Dr Kevin Hammond - International Partnering Manager
• Dr Hammond has over 30 years experience with leading pharmaceutical, FMCG and Cosmetic companies where he held responsibilities in directing partnering, licensing and new product innovations for companies such as Reckitt Benckiser, Unilever, PZ Cussons, CB Fleet (US) and GSK. Dr Hammond is a visiting lecturer at London College and a member of the Editorial Board of the International Journal of Cosmetic Science. Dr Hammond is based in the UK and manages OBJ’s European base for partnering, evaluation and product development activities.

Dr Chris Quirk – Director & Scientific Advisory Board (SAB)
• Is an Australian Dermatologist who has been a teaching Hospital Consultant for 27 years and has conducted numerous trials for international pharmaceutical companies such as Roche, Novartis & 3M, and has served on Advisory Boards for Merck, Allergen & Roche. He has presented at the World Congress of Dermatology in Paris and the World Congress on Cancers of the Skin in Seville

Dr Matt McIldowie - Research Manager
• Dr McIldowie is responsible for partnering programs at the technical and study level. Dr McIldowie holds a PhD in chemistry and has many years of experience in diverse fields such as medicinal/pharmaceutical chemistry, biological chemistry, industrial processes and materials.

Dr Maud Eijkenboom – Scientific Liaison Officer
• Has worked for Bayer Healthcare as a Senior drug development scientist, has also worked with Millennium, Janssen (J & J) & Novartis.
• Experience in drug development & evaluation programs.

Dr Ravi Kiron – Consultant to OBJ
• Experience in Drug Delivery Licensing & Technology Evaluation, and has worked for Alza Corp (J & J) responsible for New Technology Assessment, Strategic Planning and Intellectual Property

Dr Heather Benson – Scientific Advisory Board (SAB)
• Is a Transdermal Scientist, heads up the Transdermal Research Laboratory at Curtin University, presented OBJ data at the 3rd Symposium of Skin Formulation & 10th Skin Forum, held in Versailles, France (2009)

Dr Lucio van Rooijen – European Business Activities

Clinical trials: Monitor the results of clinical trials to see how the drug/product performed

OBJ – Clinical Trials:
• results of in vivo skin hydration and tooth whitening research were released with both programs resulting in ongoing discussions with major international brand leaders (2010)
• Development work with GlaxoSmithKline (GSK). The results showed statistically significant levels of enhancement in an in vitro testing model in a consumer healthcare product. This program highlighted the first successful series of tests using the new FIM technology
• The first-in-man clinical study program in oral health collaboration with GlaxoSmithKline (GSK) following continued successes in pre-clinical studies.
• In the more lucrative medium to long-term Pharmaceutical and Healthcare sectors, we were pleased to announce in May this year (2011) our securing of a collaborative research and development agreement with GSK Healthcare. Since the announcement, further and more compelling data has been generated. Both static and FIM magnetic arrays - and in vivo clinical studies are now well advanced (2011)
• The potential personal care applications for magnetic arrays have continued to receive substantial interest from several FMCG and prestige Cosmetic companies. A key achievement in this area was the announcement in September 2010, of a Strategic Alliance program with one of the world's largest FMCG companies. Work on this latter program has proved particularly encouraging, with magnetic array technology now demonstrated to improve the delivery of several key therapeutic agents - both ex vivo and in vivo. The most effective approach to bringing one or more applications to market is now the focus of discussions (2011)
• OBJ won independent Ethic Committee approval for the use of human tissues in our medical research which has allowed the Company to develop excellent working arrangements with local medical facilities to ensure that the supply of this key research tool will be maintained in the future. Access to sufficient quantities of high quality epidermal materials has already resulted in an acceleration of client sponsored programs and a number of studies into the application of magnetic micro array technology to the activation of cosmetic, depilatory and hygiene ingredients.
• The laboratory program has allowed the Company to grow its in-house expertise which has resulted in a new range of study methodologies being developed for in vivo programs. This type of data is highly effective in partnering programs as it is generally regarded as the best evidence for substantiation of cosmetic/skincare benefits. This has also proven a fertile technique rapidly resulting in the attainment of positive results
• A number of close scientific collaborations being established in the UK and in the USA. Such scientific collaborations have already yielded at least one proprietary test methodology for the cosmetic industry that has already attracted the interest of one of our FMCG partners
• OBJ’s technologies continue to be validated by academic, commercial partners and leading CRO’s in Australia, USA, UK and Europe

The above is purely for general discussion

As always please D Y O R & D Y O D D