It's all about .....

.... Marketing.


As I said a week or two back, with the opening of the gate by the CDC, the challenge for Cellestis is to grab the bull by the horns and use all of its resources to market, market, market.


As I also indicated, Cellestis know this and have now demonstrated their intentions.

Radford: Now is the Time for Heightened Focus on the TB Threat

RADFORD, TB, TUBERCULOSIS, TB IN THE US, CDC AND TB, TB THREAT, GUEST BLOG, GUEST, CNBC, CELLESTIS LIMITED

| 28 Jun 2010 | 01:50 PM ET

While most people living in the United States might think tuberculosis (TB) is a disease that no longer affects this country, in reality, between nine and 14 million Americans are infected with the bacteria that cause TB.

Consider the number of people you come in contact with every day – at the office, home, airports, trains, buses, restaurants, schools, hospitals, and shopping centers – it takes just one person with TB disease in any of these settings to pose a risk to all those around them.

A contagious disease, TB is spread through the air when a person with TB disease of the lungs or throat coughs, sneezes, speaks, or sings, which may cause people in close proximity to become infected. TB usually attacks the lungs, but it often affects other organs, and if not treated properly, it can be fatal. Around one in every 10 TB-infected people will, without treatment, go on to develop potentially deadly TB disease.

So why is TB still prevalent in the U.S.?

A key reason has to do with the very things that are supposed to help protect us from TB: theBacille Calmette-Guérin (BCG) vaccine and the main method of TB testing traditionally used, the 110+-year-old tuberculin skin test (TST). The BCG vaccine is widely-adopted globally and its use engrained in TB control policies around the world. However, it is recognized by many around the world that the BCG vaccine confounds the TST and leads to false-positive test results.

This means that for the many foreign-born Americans who have been BCG-vaccinated, the usual method of TB testing will often indicate that they are positive for TB infection. With migration to the US (approximately one million per year, many from countries where TB is endemic), TB rates have been steadily growing in foreign-born individuals - in 2009 immigrants were nearly 11 times more likely than U.S.-born citizens to have TB.

Certain communities are also at higher risk: people with autoimmune conditions and those taking immunosuppressive therapies, the elderly, the homeless, and corrections facility inmates. As a consequence of frequent contact with high-risk individuals, doctors, nurses, and staff at hospitals and other group facilities are all at significant risk of TB.

The major challenge for the U.S. is to modernize TB control.

The first hurdle will be for the nation to adopt new strategies for TB control and diagnosis. TheU.S. Centers for Disease Control and Prevention (CDC) is taking steps to pave the way for change.

In a landmark Public Health release issued last week, CDC is now championing the use of modern TB testing strategies. The CDC advises that IGRAs, simple blood tests known as interferon-gamma release assays, are now preferred over the TST for diagnosing TB infection in many groups of individuals. Further, the CDC in conjunction with the U.S. Department of Health and Human Services (Division of Global Migration and Quarantine) recently published new instructions for immigrant TB testing, which allow the blood tests to be used instead of the TST in certain immigration populations.

Using these tests for immigration TB screening will prevent the large number of false-positive TST results in BCG-vaccinated immigrants and stem unnecessary (and expensive) evaluation and treatment.

The distinct advantages of these blood tests, such as QuantiFERON®-TB Gold (QFT®), are greater accuracy over TST and not being confounded by BCG vaccination.

These blood tests frequently show that fewer than a third of those previously thought TST-positive truly have TB and can provide more valuable information for physicians to diagnose TB infection. Economic studies show that, when staff time and evaluation of TST false-positives are included in cost comparisons, QFT reduces testing program costs by seven percent while providing superior medical outcomes.

Public health and TB control programs across the U.S. are also successfully beginning to implement change.

At the forefront is the San Francisco Department of Public Health’s TB Control Health Program. The program’s switch from TST to QFT resulted in a more than 60 percent decline in the number of people testing positive for TB last year and, thus, a reduced number of follow-up visit costs. Despite this lower number of positive results, no cases of TB have been reported as missed in more than 45,000 people screened for TB in San Francisco since QFT was adopted.

Switching for healthcare worker screening alone saved the program $101,648 in the course of one year.

The CDC’s announcement is a great move in the direction of tackling how TB is tested. Success will eventually be measured by local government and other groups’ adoption of these guidelines. Although TB is not on most Americans’ radar, it remains a significant public health threat in the U.S., with still much more to be done.

_________________________
Dr Tony Radford is the founding CEO of Cellestis Limited, a biotechnology company formed in 2000 in Melbourne, Australia, and listed on the Australian Stock Exchange (ASX). Dr. Radford was a senior member of Australia’s Commonwealth Scientific and Industrial Research Organization (CSIRO) team that invented the patented QuantiFERON® technology, which is used world-wide for testing for diseases such as tuberculosis. Cellestis develops and manufactures the QuantiFERON®-TB Gold (QFT) test, a breakthrough blood test for the detection and control of tuberculosis.

URL: http://www.cnbc.com/id/37979037/

Game On.

It seems that Cellestis are doing as we expected - that is, launching a major marketing push subsequent to the release of the CDC Guidelines.


Part of this seems to be the provision of a portal to essential QuantiFERON TB Gold information. It's an excellent resource that seems to directed at all levels of the TB chain from professional TB controllers right through to patients.


Currently, this should be accessible from the Cellestis web page. A link is provided towards the bottom right of the home page labelled new "US CDC TB testing Guidelines". I actually found that this was not directly available for me until I cleared my browser cache. If you have the same problem then you may need to clear your browser cache or just go directly to http://www.tackletb.com.  


And while you are at it, have a look at a sample of the Cellestis Marketing for HCW testing.

Okay.

CDC Guidelines released.

Press Release from Cellestis.


Announcement from Cellestis.


As Joolia would say - "Game On".

Diel or No Diel

(I really just wanted to use that Title)


The American Association for Clinical Chemistry (AACC) has published a summary of the Diel findings in their June Newsletter


I think we all know now that the Diel meta-analysis is the most important research result driving the progression of QuantiFERON TB Gold into the market. The addition of the imminent release of the CDC Guidelines should give Cellestis the opportunity that it has been waiting for to be able to aggressively market the product.


(Please also read the note below)

June 2010: Volume 36, Number 6 Interferon-g Release Assays Out-Perform Tuberculin Skin Tests in Detecting Active TB A new meta-analysis comparing interferon-g release assays (IGRAs) for detecting active tuberculosis (TB) found that in comparison to the tuberculin skin test (TST), the newest commercial IGRAs are superior for detecting the disease, particularly in developed countries (Chest 2010; 137:952–68). According to the authors, the findings support the primary use of IGRAs, especially in high-risk groups such as immunosuppressed individuals with high potential for TB reactivation. Due to the poor accuracy of TST among patients with TB, two-step screening strategies with TST as a first test and IGRA as a second should be considered for contact tracing. The authors conducted the study in response to a plethora of recent research about IGRAs, which followed an earlier meta-analysis that summarized studies involving a second-generation Quanti-FERON Gold whole blood ELISA test with a variety of ELISpot assays using different cutoffs and preparations. With Food and Drug Administration approval of both the T-Spot.TB ELISpot, and a new QuantiFERON-Gold In-Tube assay incorporating a third RD-11 antigen, TB 7.7, the authors sought to establish performance benchmarks that laboratorians can expect when using the products. From an initial 679 potentially relevant studies, the authors included 124 in their final analysis. Overall, the pooled sensitivity of TST was 70% versus 81% for Quanti-FERON-Gold In-Tube and 88% for T-Spot.TB. Sensitivities for the latter two increased to 84% and 89%, respectively, when results were restricted to developed countries. Pooled specificity was 99% and 86% for the QuantiFERON-Gold In-Tube and T-Spot.TB, respectively. The researchers also found that there was a lower frequency of indeterminate results among individuals tested with QuantiFERON-Gold In-Tube in comparison to T-Spot.TB, regardless of whether the patient was immunocompetent or immunocompromised.

.


I should take the time to point out that the editing of this item from the original Diel text has resulted in a slightly changed (and incorrect) meaning in one area.


Compare the text.


Diel:

Considering sensitivity for diagnosing active TB as a surrogate parameter for LTBI, TST- based two step screening strategies (TST first, IGRA second) for contact tracing should be critically reconsidered due to the poor TST accuracy among TB patients.

AACC:

Due to the poor accuracy of TST among patients with TB, two-step screening strategies with TST as a first test and IGRA as a second should be considered for contact tracing.

Quite a significant difference in meaning!

Finally!

It looks like June 25th is the big day.

Challenges, Challenges, Challenges.

Just following on from yesterday's blog entry it seems to me that in each of those "Company stages" there are different challenges that the Company will be addressing. 


Note that my comments below are by no means trying to tell the Company what they should be doing. They are just the things that we should be watching for about our Company to measure how successfully they are progressing.


SHORT TERM


In the Short Term we are looking for QuantiFERON-TB to be progressing towards becoming the most widely used latent TB diagnostic in the developed world. To date we have achieved a high recognition in the market and modest sales. A major trigger for the increase in penetration is the imminent release of the CDC guidelines. We should be looking for the company to use these guidelines in conjunction with the available scientific proof to push hard into the market. I'm not personally sure what the best approach is here (but I'm sure the company is). Maybe it involves marketing to different levels of the TB chain - ie moving down from the top through the decision makers, coal face practitioners and even patients. It may even require the expending of some of our carefully husbanded cash. It will be interesting to watch events unfold and see how they fit into the puzzle of how this progression is going to be driven.


MEDIUM TERM


In the medium term the Company will need to push new products through the development and marketing pipeline. No doubt the existing network and product recognition will assist in this. Additionally, the Company itself will have learnt a lot about this from its experience with QTF-TB. Experience is a massive asset - one that we have perhaps not previously valued. 


We would hope that all of these factors will make additional product stories shorter than has been for QTF-TB. 


LONG TERM.


This is all about one of my favourite topics - vision. Any Company that has a long term, successful future must have a vision about where it is going. It is never good enough to just "go with the flow". You can only drive future success if you have some idea of the form that success will take. It is never too early to have a vision. Furthermore, it is never wrong to change that vision as the future unfolds. 


Whereas the short and medium term drivers of success are the current business, the future vision is all about the company. To me, these are quite different things. A business generates profits, a company manages those profits (as assets) for the best possible commercial returns.






One final thing. Poster "malta" has written an excellent post over here. Worth reading in my opinion. Cheers malta.

The Short, Medium and Long of it.

Just when you thought it was safe to plunge back into the Internet, here I am again. I've been quiet for a week or two - not much to say and busy with other things (painting the house).


I did warn you when I started this blog that I wouldn't guarantee regularity - hence my recommendation that you sign up to my email, RSS or twitter alerts. (over there to the right).


Anyway....


I've been thinking about Cellestis (surprise, surprise!). More specifically, I've been thinking about the future of Cellestis. When I start thinking about things like this I am only too aware that I can only provide my perspectives, based on my own situations, views and guesses. Everybody else will have different factors that impact their own perspectives and will likely therefore come to different conclusions.


I've been thinking about Cellestis in terms of the Short (near), Medium and Long Terms. It's tempting to attach some "real" timings to those classifications but such a specification may create a misleading prophesy. I guess, if pushed, I would consider short term to be 12 to 36 months, medium term to be 3 to 10 years and long term to be ten years plus. Just to put that in perspective, I have been invested in Cellestis for almost ten years now. My perspective is as somebody that considers himself a part owner of this business. As such, I am less interested in the vagaries of the Share price than I am in the progress of the actual business that is contained within the company. I have no real plan to ever sell that share in the business, though there may be a point at which I sell down some of my holding - more on that later - much later. I fully accept that others may judge the success or failure of their investment decisions on the movements of the Share Price. That's fine - it just doesn't work for me. 


The first thing that I believe is very important to understand is that Cellestis has now moved from being a purely speculative stock to a real business. It is now making increasing sales and, most importantly, profits. There is little danger now of this business "going broke". We do all have to admit that it has taken longer than any of us anticipated to reach this stage and, further, that it has not yet achieved all that we hope for the company. It is not unreasonable to continually review the current situation and our beliefs about the future. For some, such a review may well determine a decision to sell their CST holdings. For others it may well drive a decision to buy a CST holding. Whilst the facts about the company are incontrovertible, our own personal situations are likely to be wildly different and thereby drive different decisions. 


I think that looking at CST over the three future stages that I have outlined may well help us in solidifying how we feel about the company.


SHORT TERM. 



In the short term, Cellestis is essentially a one product company - QuantiFERON-TB Gold. After ten years of work this product is starting to hit its straps and will most certainly be the "Company maker". All of our profits are currently being generated by this one product. That would often be something of some concern. However, we all know that there is an absolute minimal (if any) danger of this product not continuing to enjoy it's ever growing acceptance. As researchers we know of the competitive situation and the possibility of any future competition arising. Personally, I am totally confident that this product truly will be the base on which the future of this Company is built.


The next two half year results will probably be those that confirm our faith in this one product.


Clearly, the event that we await is the release of the CDC Guidelines in the United States. Unlike many, I don't look to these as a driver of the share price but as a driver of sales. I really don't know what immediate impact the CDC Guidelines will have on the Share Price. To me it's not important. What is important to me is how the Company are able to capitalize on the guidelines to increase the uptake of QuantiFERON-TB Gold. In context of the short term this is the important job of the management of Cellestis. With the conjunction of peer reviewed papers (most importantly the Diel meta study) and the CDC Guidelines it just doesn't get any better. It is the trigger that the company must (and no doubt, will) use to make QuantiFERON-TB Gold the standard for latent TB testing. The Company has available all the resources that it can utilize in this task - a worldwide network, ample cash, dedicated staff and management will. With all this in it's favour, if it doesn't achieve an ongoing appreciable and increasing market penetration then we all have got it terribly wrong. I really don't see how it can't happen .


MEDIUM TERM.


When we look at the medium term for Cellestis it gets even more interesting. I see the driver of medium term success being the implementation of additional diagnostics based on the QuantiFERON platform. We know that there are currently some of these new diagnostics in the development and sales pipeline - CMV and Lyme Disease. Whilst these will be nice additions to the diagnostic portfolio, neither of these will generate the income that TB will. We have also been led to believe that there are other diagnostics currently in the pipeline that have the potential to generate income of the scale that TB will. At this stage the company has not revealed what these new diagnostics might be. I am personally hoping that they will have progressed enough that we will hear more about them this year.


We would hope that the business that has been built with QuantiFERON-TB will make the development and implementation of new diagnostics easier and quicker than TB. The existing network and ample cash should add to the experience that has been built and the general acceptance of the QuantiFERON platform and brand to make the uptake of any new diagnostics a little less difficult than QTF-TB has been.


When we look at what I have termed Short and Medium term above, it is likely that Cellestis is going to maintain a speculative premium in its Share Price for some time to come.


LONG TERM


This is where it gets really interesting. If the company has gotten to this point then it will be generating large amounts of free cash flow. In my opinion it is not unlikely that the Company could find itself generating several hundreds of millions of dollars cash profit each year. Coinciding with that I would expect that we would see a convergence of Share Price to Profits - that is, a move towards a PE of 10. 


Once the Company has arrived at that point it becomes no different from any other blue chip share investment. Depending upon what the Company paints as it's future from that situation, I would be making my decision as to whether I sell some of my shares in Cellestis and spread my investment portfolio wider.


So, what can the Company do with all that cash? As I have said many times before, there is no real point in the Company sitting on hundreds of millions of dollars of cash. Obviously I would want to see them paying me a huge dividend for my perseverance. However, I would also have no problem in listening to other uses of some of the cash within the company. That may be the purchasing of other similar companies or it may even be the moving into other industries. After all, there is really no reason that the Company could not succeed in other fields of endeavour. As unlikely as it may seem, I am willing to entertain any suggestions that the Company may make for the future. The important thing is that the Company must use it's assets to continue to grow. It is never too soon to think about how that growth is to be achieved.