Specialty cancer diagnostics company Precipio,
Inc. (NASDAQ: PRPO), announced it has signed an exclusive
global distribution agreement with ADS Biotec for the sale and
distribution of its proprietary IV-Cell cytogenetics cell culturing
media. The companies recently completed the development and have
fully validated new version of its media, a next-generation
improved product that will yield increased benefits over its first
version. Both companies have developed an ambitious go-to-market
strategy that will be launched next month, and will be joining
forces to rapidly bring the product to market, introducing it to
the top major labs worldwide.
ADS, and its Japanese
parent company ADSTEC, are a worldwide market leader in developing,
manufacturing and distributing the HANABI™ cytogenetics cell
culture harvester, a machine critical to the downstream process of
cytogenetic analysis, which includes using a cell culture medium
such as IV-Cell. The installed base of HANABI customers includes
most, if not all, large clinical reference labs that have
significant cytogenetic test volume. Any current or prospective
customer of ADS Biotec is a potential customer for IV-Cell,
yielding significant synergies between both companies. As further
explained below, this partnership offers significant value to ADS
Biotec, to Precipio, and most important – to the customer.
“We could not have
found a better partner to bring our proprietary media IV-Cell to
market,” said Ilan Danieli, Precipio’s CEO. “ADS Biotec possesses
all the qualities we were looking for in such a partner. Their
brand and quality is undisputed; their sales and installed customer
base which offer immediate access to target customers; and
distribution capabilities are an asset that we would unlikely be
able to replicate. This partnership makes a lot of sense on
multiple levels; it is a true win-win for both companies.”
“The ability to bring
novel, advanced technologies serves to enhance our value and
relationship with our customers,” said Vijay Dube, CEO of ADS
Biotec. “We are delighted to join forces with Precipio to bring
this exciting new technology to market. IV-Cell brings not only
improved efficiency and cost-saving benefits to labs; but it also
improves the quality and accuracy of the diagnostic process,
impacting patient care.”
Go-to-market
strategy
As recently discussed
in the recent Q2-2020 quarterly shareholder update, Precipio has
embarked on a strategy to distribute its product through the
formation of strategic partnerships, rather than attempting to
build its own sales and distribution team. We have recognized that
while our strength lies primarily in the development of these
proprietary technologies; the time and effort required to build a
sales and distribution network for each product vertical will
require substantial resources, carries more risk, and may result in
a prolonged effort to reach significant sales penetration.
Conversely, leveraging
a strategic partner’s existing sales networks and long-standing
relationships with potential clients, Precipio believes that these
partnerships will yield a significantly faster, as well as more
economically advantageous pathway to getting our products into both
domestic and international laboratory customers as possible.
Why ADS
Biotec
Precipio identified
three key strengths that ADS Biotec possesses, which drove the
decision to enter into this partnership:
- Market leadership, strong
reputation, highest quality products in their Hanabi systems.
- Global sales presence, established
technical support system and long-standing relationships with an
existing installed customer base.
- Logistics and distribution
facilities worldwide
Precipio’s IV-Cell
cytogenetics cell culturing media is used by cytogenetics
laboratories as part of the diagnostic process. The purpose of cell
culturing is to grow the cells in a laboratory setting, mimicking
the body’s conditions in order to identify the potential for
abnormalities and malignant cells, indicating the potential
presence of cancer in those cells.
Following the cell
culturing process, the cells must undergo a process called
“harvesting”. This is a complex and laborious process that prepares
the cells for analysis. While smaller laboratories will conduct
manual harvesting, the vast majority of larger laboratories
introduce automation, including the use of an automated
harvester.
The HANABI™ automated
harvester, manufactured and distributed by ADS Biotec, is the world
leading automated harvester; any major laboratory with substantial
volume has a HANABI machine in their laboratory. Therefore, every
customer of ADS Biotec is a potential target user for Precipio’s
IV-Cell media. ADS Biotec has not only a global presence in over 30
countries; it has an extensive sales and support network to over
200 of the world’s largest laboratories. Through years of providing
quality products and outstanding support, ADS Biotech has earned a
stellar reputation in the industry; the company has strong
credibility in the market, and long-standing relationships with the
key decision-makers.
Furthermore, ADS
Biotec also has global logistics and product distribution
facilities worldwide, enabling the provision of rapid support to
its customers. In the context of distribution of IV-Cell, ADS
Biotec will be able to hold inventory and provide immediate product
delivery and support to customers. This provides an additional
benefit to this partnership.
The benefits of this
partnership to ADS Biotec are also significant. IV-Cell enables ADS
Biotec to leverage the HANABI systems by creating new “efficient”
economics that can be attractive to additional segments of the lab
market. Precipio’s technology will enter into the consumable market
with a product that is directly tied to ADS Biotec’s core business,
creating a compelling value proposition to ADS Biotec’s customers
that will strengthen its ties with them. Furthermore, ADS Biotec
can leverage its existing sales and support channels to drive more
revenue. Lastly, as the business of consumables is an ongoing
business, this creates a recurring revenue stream for ADS
Biotec.
Product
roll-out
ADS Biotec and
Precipio will be launching its IV-Cell media in two phases:
A.
Beta-site study.
Through ADS Biotec’s
relationships, Precipio has been introduced to several reputable
laboratories worldwide who have agreed to participate in a
beta-site study project. The companies anticipate the study
initiation in Q4-2020, and will be completed by year end.
The benefits of this
study will be three-fold. First, these laboratories will conduct
their own, independent validation of the V2 IV-Cell Media to
demonstrate the efficacy and experience the benefits of the
product, compared to their existing media.
Second, both companies
will aggregate the results of this extensive study and plan to
publish and present the results in leading scientific journals,
providing credible, widespread endorsement of the media. This is a
critical supporting element to bringing such a new product into the
market.
Lastly, following a
successful validation, it is expected that these laboratories will
immediately become the first customers for Precipio’s IV-Cell
media.
B.
Full roll out
Following the
completion of the study, ADS Biotec will put to work its global
sales and support team to introduce the product to its entire
installed customer base. Armed with a broad-based study conducted
by multiple reputable laboratories, we anticipate that ADS Biotec’s
team will be able to rapidly and successfully grow the customer
base that will use the IV-Cell media.
About ADS
ADS Biotec, along with
its parent company ADSTEC (Japan), is a global leader in the
development, manufacture and sale of automated instruments and
consumables for use in cytogenetic, pathology and research
laboratories. Our technology and services enable our customers
to increase productivity and throughput while maintaining a high
degree of quality and consistency.
ADS Biotec has a truly
global presence with development, sales, and support operations on
three continents, and users in over 30 Countries. Our team,
having over 20 years of experience in this industry, is recognized
by our customers for our advanced instrumentation, superior
customer service, scientific application support, and a very
knowledgeable sales force. With a company-wide commitment to
quality and value, we serve professionals and laboratories
performing diagnostic analysis in the areas of Cytogenetics,
pathology, and molecular genetic analysis.
About Precipio
Precipio has built a platform designed to
eradicate the problem of misdiagnosis by harnessing the intellect,
expertise and technology developed within academic institutions and
delivering quality diagnostic information to physicians and their
patients worldwide. Through its collaborations with world-class
academic institutions specializing in cancer research, diagnostics
and treatment such as the Yale School of Medicine and Harvard’s
Dana-Farber Cancer Institute, Precipio offers a new standard of
diagnostic accuracy enabling the highest level of patient care. For
more information, please visit www.precipiodx.com.
Forward-Looking Statements
This press release contains “forward-looking
statements” within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended, including, among others, statements related to
the expected or potential impact of the novel coronavirus
(COVID-19) pandemic, and the related responses of the government,
consumers, and the company, on our business, financial condition
and results of operations, and any such forward-looking statements,
whether concerning the COVID-19 pandemic or otherwise, involve
risks, assumptions and uncertainties. Except for historical
information, statements about future volumes, sales, growth, costs,
cost savings, margins, earnings, earnings per share, diluted
earnings per share, cash flows, plans, objectives, expectations,
growth or profitability are forward-looking statements based on
management’s estimates, beliefs, assumptions and projections. Words
such as “could,” “may,” “expects,” “anticipates,” “will,”
“targets,” “goals,” “projects,” “intends,” “plans,” “believes,”
“seeks,” “estimates,” “predicts,” and variations on such words, and
similar expressions that reflect our current views with respect to
future events and operational, economic and financial performance,
are intended to identify such forward-looking statements. These
forward-looking statements are only predictions, subject to risks
and uncertainties, and actual results could differ materially from
those discussed. Important factors that could affect performance
and cause results to differ materially from management’s
expectations, or could affect the company’s ability to achieve its
strategic goals, include the uncertainties relating to the impact
of COVID-19 on the company’s business, operations and employees and
the other factors that are described in the sections entitled “Risk
Factors” and “Management’s Discussion and Analysis” in the
company's Annual Report on Form 10-K for the fiscal year ended
December 31, 2019, as updated from time to time in the company’s
Securities and Exchange Commission filings.
The company’s forward-looking statements in this
press release are based on management’s current views, beliefs,
assumptions and expectations regarding future events and speak only
as of the date of this release. The company undertakes no
obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise, except as required by the federal securities
laws.
Inquiries:
investors@precipiodx.com
+1-203-787-7888 Ext. 523
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