|PSID's Silverman believes in upside potential for his stock|
|By Staff and Wire Reports|
|Tuesday, 14 June 2011 03:49|
PositiveID Corporation focuses on health and security identification tools. The HealthID segment focuses on the development of GlucoChip, a glucose-sensing microchip; iGlucose, a wireless communication device that uses wireless SMS messaging to automatically communicate a diabetic's glucose readings to the iGlucose online database; Easy Check, a non-invasive breath glucose detection system; and rapid flu detection system. This segment also develops VeriMed system, which uses an implantable passive radio frequency identification microchip to identify people, who are unconscious, confused, or unable to communicate at the time of medical treatment. The ID Security segment offers identity security suite of products through its NationalCreditReport.com, which helps consumers protect themselves against identity theft or fraud, as well as understand and monitor their credit profiles and other personal information, such as credit reports, credit monitoring, and credit scores. This segment also offers Health Link personal health record (Health Link PHR), a patient-controlled, online repository to store personal health information such as medications, allergies, family history, previous surgeries, vaccinations, and lab results. Its Health Link PHR also connects the patient to various customized materials, such as personalized health education and online connectivity to caregivers. The company was formerly known as VeriChip Corporation and changed its name to PositiveID Corporation in November 2009.
BioMedReports: Can you provide us with an update on iGlucose?
Additionally, we have had a lot of great news surrounding our iglucose product and have established some very important relationships. As you may have read, initially we formed a partnership with Voxiva, the creator of the highly successful text4baby platform funded in large part by Johnson & Johnson, to integrate our platform with their care4 life diabetes management program. We have also formed strategic relationships with AT&T to use their GSM network; Sierra Wireless to use their GSM modules; and others. Our product was chosen as the showcase product by Sierra Wireless at CTIA, and we have also demonstrated our products at other trade shows and events to a very positive reception from the industry, media, healthcare professionals and those living with diabetes.
We are very excited about our progress with our “iglucose inside” device, a glucometer that contains the iglucose wireless functionality embedded directly in the glucometer itself. We have partnered with an FDA-cleared glucometer manufacturer in Taiwan, and have already conducted tests that confirm the product works. Once we receive FDA clearance on our “plug and play” universal iglucose device, we will look to receive clearance on our “iglucose inside” product.
Finally, we are also looking to bring iglucose to international markets in the near future. As you know, diabetes is a growing epidemic around the globe. You should see some updates from us on that front in the near future.
BioMedReports: What is the company's financial condition?
Scott R. Silverman, Chairman and CEO of PositiveID Corporation: As of our most recent filing (March 31, 2011), PositiveID had $2.2 million in cash. Importantly, we completed a financing in April, which was not reflected in our first quarter cash position, where we raised $1.4 million. It’s also important to note that our stockholders’ equity is currently above the $2.5 million requirement set by the Nasdaq for continued listing. We have no debt.
We have disclosed that we are evaluating strategic transactions related to our ID Security business currently, and believe that between our current cash position and a potential strategic transaction for our ID Security business, we have sufficient capital until at least the fourth quarter of this year. Our research projects, including GlucoChip and Easy Check, are fully funded through the year.
BioMedReports: Why did the company acquire Microfluidic Systems?
Scott R. Silverman, Chairman and CEO of PositiveID Corporation: We acquired MicroFluidic Systems for a variety of reasons. First let me give you a little background on MicroFluidic Systems, or MFSI. MFSI specializes in the detection and processing of biological samples for homeland security and rapid medical testing. MFSI has received over $45 million in government contracts, the majority of which have come from the Department of Homeland Security, and has a pipeline of potential new contracts totaling more than $37 million. The founder and CEO of MFSI, Allen Northrup, is a world-renowned scientist with a proven track record who was a founder of Cepheid, a $2 billion dollar Nasdaq-traded company. MFSI has a strong intellectual property portfolio with 29 U.S. Patents and Patents Pending.
As you may know, in our development of a rapid virus detection system, we developed a sample prep application to improve current point-of-care PCR tests for detecting particular strains of flu. And, in fact, MFSI’s IP related to sample preparation and rapid medical testing applications are complementary to what we’re doing with virus detection and even our GlucoChip, glucose-sensing microchip.
Looking beyond the complementary technologies, from a pure value standpoint, based on MFSI’s historical successes, proven management team, strong IP, etc., we were able to structure the transaction in a way that carried very little upfront risk to PositiveID, but upon success, can provide significant earn-out potential to the management team at MFSI.
In addition to its work in the public sector including homeland security and military opportunities, which represent a large potential market of up to $400 million in 2015 and are significantly additive to our healthcare projects, MFSI is looking to expand to the private sector, primarily with its clinical diagnostic platform called DragonFly. DragonFly provides a way to test for multiple pathogens (viruses and bacteria) such as E.coli, influenza, MRSA, HPV and many others, in a healthcare setting, faster and cheaper than it is done today.
BioMedReports: What does it mean to have $37 million of potential contracts in the pipeline?
Scott R. Silverman, Chairman and CEO of PositiveID Corporation: The $37 million of potential contracts represent proposals that MFSI has submitted or is in the final stages of submitting. The majority of these contracts, under broad agency announcements, are scheduled to be awarded in calendar 2011, and there are typically only a handful of submissions for each BAA. Historically, the majority of MFSI’s contract awards have come from the Department of Homeland Security and Department of Defense. In addition to DHS, MFSI has also submitted proposals to Health and Human Services and the Department of Defense.
BioMedReports: Why did insiders purchase stock recently?
Scott R. Silverman, Chairman and CEO of PositiveID Corporation: Last week, Bill Caragol, our President and CFO, and I purchased shares on the open market because we felt that with our many positive developments ongoing and the currently depressed share price, it was the perfect time to buy. Also, as you know, the window for insiders to purchase shares is seldom open so when the opportunity presented itself, we jumped at it.
We believe whole-heartedly in the future of PositiveID. From our completed iglucose product, our development projects for diabetes management including our non-invasive Easy Check breath glucose detection device, which we haven’t yet discussed*, our recent acquisition of MFSI and their strong pipeline, and other opportunities, we believe there is significant upside potential for our stock.
*Since I brought up Easy Check, I’d like to provide an update on that project as well, as we consider it one of the most exciting and potentially revolutionary to change the way people with diabetes manage their disease. In April, we announced that we received positive results from preliminary lab tests of our Easy Check breath glucose detection device. In side-by-side tests of Easy Check with a traditional strip and glucose meter, we received results that were within acceptable industry standards as set by the National Committee of Clinical Laboratory Standards and the International Organization for Standardization, or ISO. We also published a white paper with that data on our website. We are now in the process of building commercial prototypes to begin more widespread pre-clinical testing.
BioMedReports: What are some of the key milestones investors should look for over the next 30-60 days?
Scott R. Silverman, Chairman and CEO of PositiveID Corporation: There are a lot of catalysts investors should look for in the near-term to gauge our progress and execution. Within the next 30-60 days, investors should watch for our submission of our iglucose 510(k) to the FDA; news related to the international expansion of iglucose; a potential strategic transaction within our ID Security business; an announcement regarding the initiation of pre-clinical studies for Easy Check with a world-renowned research hospital; and potential large contract(s) for MFSI.