Forgot to say what made it for me
Looked through the ann and saw this newsletter.
Amid all the hype the comment that the loss of >$700k was likely to be exceeded in the future 1/4's was more than balanced by the fact they had >$8.25mill COHand
CELLESTIS LIMITED 2002-03-19 ASX-SIGNAL-G
HOMEX - Melbourne
+++++++++++++++++++++++++
LETTER TO SHAREHOLDERS
I am pleased to provide you with a brief update on the progress of
your company over the last six months.
HIGHLIGHTS
The six months from the last annual report has been a period of
continual activity for Cellestis, and represents a half-year of solid
achievements. Heading the list of achieved objectives was the
pre-marketing approval of QuantiFERON(R)(TB) on 29 November 2001 by
the US Food and Drug Administration (FDA). Going through the scrutiny
of a full FDA pre-marketing approval was a tough and exciting
experience. Achieving this approval within an accelerated time-frame
was a great achievement for the Cellestis team.
As part of the FDA approval process, Cellestis was required to deal
with some minor issues relating to test reproducibility and the
wording of our QuantiFERON(R)-TB test kit instructions. Having dealt
with these issues, the test is now able to be sold in the USA.
MARKETING - THE TASK AT HAND
Marketing is now the key task and focus of the Company. As we have
previously noted, we are concentrating our initial marketing efforts
on a number of large organisations, mainly based in the USA, such as
hospitals, the military, prisons and public health organizations.
As the Company's principle and most accessible market is in the USA,
Dr Tony Radford (Managing Director), Dr Jim Rothel (Chief Scientific
Officer) and Mr Mark Boyle (Head of Sales and Marketing) have been
travelling extensively. Meetings are being held with key clinical
opinion leaders, laboratory heads, TB controllers and representatives
of other public health bodies with a view to promoting and selling
our QuantiFERON(R)-TB product.
Our initial marketing efforts lead us to conclude that the size of,
and opportunity afforded by, our target market remains at least as
large as that described in the Company's prospectus.
The task ahead for Cellestis is turning this customer enthusiasm into
initial commercial acceptance of our product, and then into a solid
customer base. To meet the challenges of the American market, we are
establishing an office in Los Angeles, have contracted a professional
diagnostics logistics centre to store and distribute
QuantiFERON(R)-TB in the USA, and are in the process of expanding our
sales team both locally and in the USA.
During the year ahead a significant marketing effort is required,
which is expected to include the implementation of pilot programs with
major customers. Numerous presentations are planned at key
conferences over the next year, starting with a major presentation,
which was made at the International Union Against Tuberculosis and
Lung Disease meeting in Vancouver at the end of February. In this
forum a workshop specifically on QantiFERON(R)-TB was run in
conjunction with the US Centres for Disease Control, presenting the
product to around 100 key opinion leaders and customers - nearly
half the total attendees at the conference - and obtaining feedback
as to where and how they wish to use QuantiFERON(R)-TB. The
reception of QuantiFERON(R)-TB was very positive, and similar
workshops are planned for a number of other critical conferences
over the next year.
WHAT OF OTHER MARKETS?
Cellestis strategy is to focus on direct Marketing in the USA and to
sell via diagnostic distribution companies in all other markets
outside Australia. We have chosen distributors to sell
QuantiFERON(R)-TB in select major world markets. This process has
been greatly assisted by FDA approval, as we have been approached by
numbers of potential distributors in many countries, indicating the
strong interest in the product. We are now in various stages of
contract agreement in most major markets, and expect a number of
distribution agreements to be finalised by the end of the next
quarter.
RESEARCH & DEVELOPMENT
There were a number of research highlights in the six months to
December 2001. An important item for the Company was the publication
in the Journal of the American Medical Association of a paper
describing the clinical trials conducted by the Centers for Disease
Control in the USA using QuantiFERON(R)-TB. Having this paper
published in the most widely circulated medical journal in the USA,
has substantially raised the profile of QuantiFERON(R)-TB in the
medical community.
Cellestis has been active in other R&D, and we look forward to being
able to announce material progress to shareholders in the future.
FINANCIALS
The expedited FDA review raised expenses as it compressed six months
of work into 12 weeks. As a result we depended heavily on US and
local regulatory consultants to assist us in meeting the demands and
questions of the FDA.
Nevertheless, overall expenditure remains in line with expectations.
Key points are:
* Net operating loss was $772,000 for the six-month period ending
31 December 2001.
* Losses will increase over the next year as marketing expenses and
customer pilot program costs increase. Initial sales are expected to
be lower, while customers are in the testing and adoption phase.
* R&D expenses were less than expected at only $52,984 for the
six-month period. This is primarily due to third parties meeting the
costs of clinical trial expenditures. It is anticipated that R&D
expenditures will increase over the next 12 months as we expand into
new trials and products.
* As at 31 December 2001, cash reserves, allowing for license
payments and all operating expenditures to that date, totalled $8.27M.
SUMMARY
Cellestis is on track in both its marketing and R&D targets. The
Company looks forward to commencing sales over the course of this
calendar year, with a goal of reaching substantial revenue by the end
of 2003 and securing a significant market share in the following
period.
Dr T Radford
MANAGING DIRECTOR
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