agm some notes

I attended the CST AGM and took hurriedly down some notes that may be of interest I have been very busy and would have posted these a bit earlier, anyway it may open the board to some more discussion on the AGM. The below is straight from my notes and may seem a bit disjointed please forgive me and maybe some of the others who were there may be able to fill in the blanks.

Ron Pitcher
2008 landmark year, financial milestone cash flow positive.
Overheads increased by 1.7 million dollars, marketing and sales were the contributors to this. Sales increased 4 times. U.S. and Germany excel in sales 45 staff world wide. Approval in Japan by June 09 focused on long term success.
Impact on US$ hedging has worked well. No borrowing required business is run on a tight budget, this is why we are in a good position today. We are looking at acquisitions not until Tax is paid in Australia. 2009 significant progress with company’s performance well ahead of budget.

Jim Rothell
Greenland every child being screened with QFT they still have 10% TB.
230 publications. Crucial to sales want independent study to have publications for every area. Dissemination of this information is the KEY. Japan final process expected June 09.
Taiwan is asking a lot of questions, it will be next year. Korea reimbursement expected first half 09. USA August CDC guidelines in preparation closed meeting hope new guidelines will be more persuasive.
Patents 2017 USA TB test
CMV 2022 Test
In tube could be 2023 with small blood finger prick.
I P protection we don’t want to be a generic company for tests.

TB small volume less than 1ml of blood for children usually need 3ml prototype in clinical studies should know soon. Pleural TB hard to diagnose. Pleural fluid is very diagnostic 95% certainty, it is a small market this needs to be excluded. Others next year.
CMV & leismania contract with US army very good specfity, continue trials.
We want to be more active in testing. CMV = Herpes 70% to 80% when you get sick susceptible to get CMV very important organ transplant currently good tests what’s the point of QFT-CMV? Monitors the LEVEL of CMV. Replaced TB antigen with the CMV market size. Organ transplant worldwide 70,000 kidney 50,000 monitoring of CMV 8,000. Small umber of hospitals that do the transplants marketing point of view don’t have to go to a lot of hospitals. We didn’t release this as we became aware of great data monitoring. The CMV official release will be after the publication of this paper.
CMV study after the transplant have high risk of getting CMV. Give anti rejection drugs monitor it through the test. Clear potential as a monitoring test, CE markets in Europe, FDA submission lodged.

Tony Radford
Improving net margins on sales. First half profit before tax should comfortably exceed 2008 profit. No visible effect caused by the economic downturn long term this is a wildcard. Health care is relatively insulated by Government spending.
Global Symposium
Vancouver great success peer to peer marketing. Company marketing getting Labs to go out and sell QFT to other places.
Selling
Where are we in the scale of sales and marketing? Currently selling 1million tests p.a. developed world more than 60 million tests remains the market. Its accuracy will reduce this market.
HCW screening 4 million in U.S. 50% go to this test cost benefits are great. Japan vital to growth coming years. Europe says it should be using the test but using the TST for how much longer. U.S. immigration testing, to stop it at the border. U.S. starting to screen children we want to get into this market.
U.K. large outbreak they used QFT test for several 100 people. Using it for imunosuppressed and HIV
Military U.S got some sales to them.
Where are we in the big picture?
Korea have approval seeking reimbursement high level of TB developed they have 50 million people half of the Japan & Taiwan market. We are profitable and continuing this trend. 2009 a year of opportunity the dollar is low raises top line revenue, margin remains constant because of hedging.
3G in tube in Japan excited seen benefit in introducing it into the U.S. likely minimum effect on sales 2009 outcome.
Balance sheet very conservatively constructed, have a lot of cash. We are conscience of building shareholder wealth. We will not sit on a pile of cash.
Inertia of bureaucracy to change rules, is the largest problem that causes a lag in sales. In Canada they are basing approvals on outdated data.
No vaccine will be invented in my lifetime or my daughter’s lifetime for TB
A shareholder asked this question: 50 million test at $20 a test = 1 $Billion in sales. Response: This is an out there statement. Pride goes before destruction.
Surgeon General bringing out his report could give a large boost.
Selling this product is about credibility, integrity and convincing your peer group this is the best way to go.
A shareholder asked a question about penicillin which was launched in the 1940’s and that it took 2 years from global launch to hold most of the market. Response was this is a different situation because we have an incumbent TST test.
Australian national TB advisory board still not endorsing QFT. Doctors within the TB control and public health are not the smartest.
Peer to peer is the way to go. It takes time to change opinions on a test compared to pharmaceuticals.
I know the above is a lot of statements, but frankly I have not got the time to lay it out eloquently.