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From the CEO’s desk

As you are no doubt aware, Paul Wright has retired as CEO of Universal Biosensors after five years leading the company.

We are sorry to see Paul go but understand his desire to explore new professional and personal interests and wish him well.

As we conduct an international search for Paul’s replacement, I will take on his role in the interim. It’s a position I’m familiar with, having filled the role in the period prior to Paul joining us. My duties during this time will include reviewing all of the company’s programs and their status.

UBI is in a strong position – a situation we intend to maintain and strengthen. 

The company’s latest full year financial results were strong, with increasing revenues, net losses reduced substantially compared with the previous year, and operating cash flow positive. Our financial trajectory sets the company up for success in the years ahead.

We have also recently modified our collaboration agreement with Siemens to focus our development program in areas that offergreater return on investment for both of companies. Under the changes, UBI will receive US$3.75 million in milestone payments in FY2016 from Siemens. We have also agreed to reduce the transfer pricing of PT/INR strips made for Siemens to provide Siemens with greater flexibility during the early stages of product introduction.

UBI is an agile, innovative company producing and developing technology that makes a difference to people’s lives. I believe it’s one of the reasons why we have strong relationships with LifeScan and Siemens, two of the world’s leading healthcare companies. These relationships are reasons to be excited about the future.

I expect the company will continue the positive momentum it has built over the past number of years and that the solid foundation we have established will see UBI go from strength to strength. 

I look forward to updating you with announcements of our continuing progress in the months ahead and appointment of a new CEO.

Regards

Andrew Denver

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FY financial results


Universal Biosensors’ financial results for 2015 showed the company continuing to make excellent progress – operationally, developmentally and financially.

Total revenue was up 76% on the previous year, with much of that growth attributable to strong increases in Quarterly Services Fees, up 99% year on year. Revenue from sales of test strips for the Siemens Xprecia Stride™ Coagulation Analyzer began to flow and the future potential for this award winning international product appears bright. The jump in revenue saw the company’s net loss reduced to $6.6 million, from last year’s $9.3 million, and operating cash flow turn positive.

With two commercial point-of-care diagnostic tests currently in the market (LifeScan’s OneTouch Verio™ and Siemens’ Xprecia Stride™) and new products in the pipeline, the revenue outlook appears healthy.

General and administration (G&A) expenses remained stable and rolling 12 month cash consumption has reduced steadily over the past 15 months.

Work continues on developing UBI’s own PT-INR testing system for decentralised and home use. Extensive reliability and performance testing has been carried out and the company is currently reviewing technical and commercial data before committing to the expense of regulatory clinical trials in the US.

Collaboration with Siemens on further point-of-care coagulation tests continues and UBI remains excited by its immunoassay testing platform.

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What is “R&D” at UBI?


A significant part of UBI’s business activity today is in “R&D”. Indeed, the largest area of expenditure for the company is in “R&D”, with $19.8 million spent in the last financial year.  It’s a significant amount of money, but also a significant investment in our future.

Without “R&D”, UBI, and just about any other company in the medical device sector, risks being overtaken by others who are constantly searching for innovative ways to improve the lives of patients and create value in the healthcare industry.

However, the term “R&D” can be a little misleading. 

In reality, the bulk (over 90%) of our “R&D” activity is better described as “new product development”, with the small balance of activity in what is commonly considered “research” or exploratory activities with high technical risk.

The company’s core technology is a highly accurate, speedy and reliable blood testing system, consisting of test strips and hand held analysers. The fundamental research that underpins these systems has been successfully completed, and in many cases resulted in patents that protect this innovation commercially. 

What comes next is the detailed development work required to put the technology to use in the hands of a patient or a healthcare professional.

This involves the detailed engineering design of analysers, and adapting our library of test strip technology to deliver convenient, accurate and low-cost measurement of biomarkers in a drop of blood. Development work involves many activities including mechanical and industrial design, software and electronics engineering, process engineering, and lots and lots of testing. This is where we put the vast majority of our “R&D” effort – it’s largely about the “D”. 

In the end, new product development enables UBI to create future revenue streams from multiple devices and applications. Diversification of revenue sources creates a firmer foundation for the company to build on. 

In Australia, “R&D” is recognised as an important pathway for companies to create products that boost manufacturing and jobs and benefits that flow on to the wider economy. The R&D Tax Incentive, which UBI has received for the past 3 years, encourages companies onto that path.

When rebates are available, companies like UBI can use that financial leverage to accelerate product development. That means products get to the market quicker and the benefits to the company, economy and community flow faster. 

For UBI, the power of successful innovation in the market place can be seen with LifeScan’s OneTouch VerioTM blood glucose meter, with strip sales accelerating rapidly in an otherwise low growth market. 

Ensuring this innovation is utilised and repeated is a key motivation behind UBI’s development activity. So we are focused on delivering future revenue growth while always looking to increase the return on our investment in product development. 

Q & A with David Hoey, Non-Executive Director


Q: Tell us about your professional career to date?

A: I live in Boston, one of the United States’ hotbeds for technology innovation.  This is a terrific setting for the business and corporate development work that I do.  I’ve been fortunate to work in executive roles spanning information technology, environmental technology and biotech.  I’m currently CEO of Vaxxas, which is commercialising an exciting Australian technology for needle-free vaccination.  We’ve just established manufacturing operations and we’re working with some of the world’s leading pharmaceutical companies as we commence our first human clinical studies.

Q: What have been the highlights so far?

A: It’s an incredibly exciting time for the healthcare industry.  An increasingly detailed understanding of genomics and proteomics, along with advances in molecular tools and techniques, is enabling creation of powerful new products focused on improving patient experience and health outcomes.  In an inwardly focused sense, my work in single molecule analysis left me with a profound respect for the beauty of genomes and molecular machinery.  In my current work with vaccines, it is the potential to fundamentally transform this critical aspect of preventative healthcare.  In the developed world we’ll all be happy not to get a needle, but in the developing world, by avoiding the need for refrigeration Vaxxas’ technology could help save millions of lives.

Q: Why did you decide to join UBI?

A: Bringing advanced detection technology to point-of-care settings is one of the most exciting areas in the healthcare landscape.  UBI’s platform puts ultra-sensitive, accurate, and economically competitive testing directly in the hands of patients and point-of-care physicians.  Reliable, actionable information where you need it and when you need it.  I believe UBI is strongly positioned for growth as this global trend becomes a pillar for the standard of care. 

Q: How do you think your skills and experience can benefit UBI?    

A: UBI has an excellent team in place with a demonstrated record of innovation and product development.  The company has also forged strong relationships with world leaders in the pharmaceutical and medical device industries.  I’m hoping my background in business and corporate development can help bolster these activities.  I am also looking forward to helping the team grow the user base and explore new applications and partnerships.

Q: What do you like to do in your spare time?

A: My wife and I are both very active. We like to spend time hiking, biking and running in the forests around Boston and Cape Cod.  We also have an expanding repertoire of grandchildren in the north-eastern USA to keep us on our toes!

LifeScan introduces new OneTouch Verio Flex™ with colour 


Universal Biosensors’ partner LifeScan has released a new OneTouch Verio Flex™ blood glucose monitoring system that uses colour indications to make it easier for diabetics to gauge and manage their blood sugar levels. The blood glucose test strip developed by UBI is used in this new system.

The colour range quickly and simply indicates for users whether their blood sugar tests are in a low range (blue), high range (red) or an appropriate range (green). 

This new functionality takes the guess work out of patients interpreting blood glucose readings, enabling them to quickly get on with their lives.

A survey by LifeScan found that 9 out of 10 people with diabetes agreed that the meter’s colour range indicator helped them easily interpret their blood sugar readings. It also found that 7 out of 10 people with diabetes agreed that the OneTouch Verio Flex™ meter with its simple colour range indicator could encourage them to test as recommended.

Currently, there are an estimated 29 million people with diabetes in the US and many don't test their blood sugar regularly or as recommended by their healthcare professional. 

Universal Biosensors receives Quarterly Service Fees based on sales of test strips for the OneTouch Verio™ meter, so anything that encourages users to test their blood sugar levels more regularly is likely to flow through to the service fees that UBI receives. 

The OneTouch Verio Flex™ meter is currently being rolled out in the US at US$19.99 while the test strips have the lowest co-pay on the most health plans and could save users US$40 a month.

Patients can also connect the meter wirelessly with the OneTouch Reveal® mobile app available on compatible iOS and Android mobile devices to provide further insights about their blood sugar readings.

Paul Wright features in The Australian

Late last year Paul Wright was featured in The Australian advocating that Australia’s Research and Development Tax Incentive should be extended, so that companies with revenues up to $50 million may continue to be eligible to receive the R&D Tax Rebate (instead of currently becoming ineligible when revenue exceeds $20 million).

Paul has been a long-time advocate of the R&D Tax Rebate and the boost it gives to companies, such as Universal Biosensors, developing unique and innovative products.

The interview followed the announcement of the Federal Government’s National Innovation and Science Agenda.

While supporting the intention of the agenda to help build Australia’s innovation future, Paul noted that stopping a company’s access to the tax refund when it reaches $20 million revenue was arbitrary and unhelpful.
 
He says that with revenues in the $20-$50 million range, a company has proven that it can deliver successful products and services and has established business infrastructure.  However, companies of this size will still benefit enormously from the financial support for product development to accelerate growth, while offering the best chance of success in developing and commercialising new products. So the government’s investment in innovation is likely to generate higher returns with companies in this “sweet spot”.

“Investing that R&D Tax Rebate into only small companies is fine, but they are building everything from the ground up, whereas we are young adults, we know how to survive in the world,” he told the newspaper.

To read the article, click here.

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