The company has just gone through a restructuring and refocusing process.
A key part of this has been to relocate resources to the centre of operations in New Jersey and to use those resources to build up the strategic, sales and R&D functions of SBL. This is now largely in place.
The company has also just completed a successful capital raising, has retired all debt, acquired 100% ownership of unique and valuable IP and has plenty of cash in the bank to get through the current economic downturn.
As good as all that is, it’s not what really excites me.
The core thing for me is the recent success that SBN has had (with just one flawed product) in the context of the exponential progress that will be made in the next four months.
You know the recent successes. They’ve been trumpeted here on HC if not always by SBN). They include the SiYi joint venture (the most likely ‘company maker’), Nuevo Leon schools testing, the Latvian roadside testing and a range of exclusive deals with distributors around the world (CMM in Australia, Medinat in Russia, Wellcare in the Middle East), each with a huge amount of potential.
All with Oraline iv – a flawed product (in today’s market) because it only tests for 4 drugs which is equal to the lowest number for all competing multi-drug saliva testing devices. An increasingly significant lack in Oraline iv is the lack of a prescription drug measurement capacity. This is important given the recent world-wide surge in the abuse of these drug types.
However, the other attributes of Oraline iv (the superior one-step saliva collecting technology, the superior THC measurement capacity, the competitive price) are so significant that they have offset the shortcomings for a range of end-users (such as the Latvian Police and the Nuevo Leon Department of Education). They have also apparently impressed the distributors who have recently entered exclusive distribution deals.
With that as the background, I see the launch of Oraline 8 at the Medica Conference in November as a pivotal point for the company.
This will launch the company well to the front of the saliva testing pack at a time when we are seeing the testing world increasingly turn to saliva as the preferred testing medium (as demonstrated in our recent posts re the workplace testing in the Australian mining industry and the Canadian construction industry and the recent commencement of roadside saliva testing in France and Latvia).
To borrow a metaphor from the Olympics, Oraline 8 will be the Usain Bolt of saliva testing (not just the Asafa Powell).
Not only will Oraline 8 cover the most used illicit drugs (as does Oraline iv) but it will also cover the full range of prescription types, methadone, and (mainly for China) ketamine. And two formats will be available – 10 drugs altogether. No other saliva device does this to my knowledge – and they certainly don’t have the other attributes of Oraline mentioned above.
And there’s more. Oraline 8 will have ‘an improved saliva collection device’. Improving on the best. That’s not bad!
Given the emerging success of Oraline iv, Jack Kerins and his recently expanded sales team should have a ‘field day’ with Oraline8.
And to launch Oraline 8 at Medica in Germany is a VERY smart move. Most of the big potential markets for Oraline 8 are out of the USA (where the FDA has no influence). This is the biggest non-USA medical technology show in the world. But it also attracts massive interest from the USA (with 400 exhibitors just from the US expected at this year’s show). It’s really the perfect platform – and if they do it well, it could open doors to many more potential distributors.
But, as good as the Oraline 8 development is, it’s not the only thing in the pipeline to get excited about.
We’ve also got Visualine, Visualine/Bioscreens split cup and Probeline dancing on the sidelines, raring to go.
So, we’re not going to be a one-horse race for much longer (or even a 3-horse race – with Oraline iv and the 2 versions of Oraline 8).
The re-engineered Visualine and the Visualine/Bioscreens JV are apparently on track to be completed in December and, with Probeline, we have a very interesting 2,000 unit trial happening this month.
With any luck, we will move, in the space of just 4 months, from our current one-product situation to an exponentially healthier 6 products (Oraline x 3 versions; probeline; visualine; bioscreens split cup).
Think of the market leverage we will get for these new products from the existing (and emerging) distributorships and the experience and leads these distributors would already have developed with Oraline iv.
Significant impacts on the bottom line are likely to show up in the December qtr, and even more so in the March qtr next year.
And, along with the product development, we have the marketing reach. China, Mexico, Russia and Eastern Europe and most recently (through Wellcare and CMM) the mid east and Australia.
According to the recent Preliminary Final Report, the geographical spread is also under expansion.
There are plans to market into the UK following the Medica launch of Oraline 8 as well as an initiative to promote Oraline in 4 Latin American countries, using assistance provided by the US Department of Commerce.
In terms of news and/or announcements, this is my guess of what we are likely to be in for over the next 4 months.
SEPTEMBER
1. Mexico import license approval
2. Oraline order for Nuevo Leon schools testing
3. Final approvals for sales of Oraline by Top Med in Poland
4. Significant orders in Russia (perhaps including the Latvian roadside testing)
OCTOBER
1. MPS approval of Oraline and commencement of field testing in 15 cities
2. Results of Probeline trials
3. Commencement of drug testing in Nuevo Leon schools
4. Sept Qtr results and Investor Update
NOVEMBER
1. Launch of Oraline 8
DECEMBER
1. Relaunch of Visualine (with 2 additional drugs and lower price point)
2. Launch of Bioscreens split cup
3. UK distributorship agreement(s)
4. Completion of Chinese field trials and commencement of production/sales
Other possible news items, but which can’t be time estimated, include CMM’s progress with identifying required changes to Oraline to comply with Australian Standards in workplace testing and possible increases in US and other distributorships.
All in all, it looks like a great 4 months to me.
But having said all that, there will be plenty here who won’t have the patience to hang around for that long – or will get sick of management’s reticence in releasing information to the market. Those who stay, though, will be well rewarded.
I’ve never been more certain of SBN’s future.
Congratulations to all those who got to the end of this. Easily my longest post and certainly the last (this length) for a while.
SBN Price at posting:
1.0¢ Sentiment: LT Buy Disclosure: Held
