|
  |
A number of major trends are affecting healthcare systems in the developed world, all of which will have a positive impact on Trinity's business. These changes include:
This climate of fundamental change favours companies who can offer innovative products which meet the evolving needs of this new healthcare model. Trinity is at the forefront of these companies as its innovative rapid diagnostic tests offer significant time and cost saving benefits to healthcare professionals over existing slower and more complex tests. By moving the testing site away from the centralised reference or hospital laboratory and closer to the patient, significant cost savings result. Furthermore the provision of a test result within minutes facilitates better patient care by removing the stress associated with waiting days or weeks for a test result. Given the worldwide macro economic changes in healthcare delivery the diagnostics reagent market can be divided into three main areas: 1. Test kits for the clinical laboratory or traditional market. 2. Rapid tests for the emerging point-of-care market. 3. Simplified, unitised tests for the over-the-counter market. The clinical laboratory market is by far the largest, accounting for approximately $16 billion in sales in 1996 compared to the combined POC and OTC markets at $2 billion. While the clinical laboratory market is growing at 7% p.a. the combined POC and OTC markets are growing at a rate of 30% p.a. By the year 2000 the clinical laboratory market is expected to be $18 billion and the combined POC/OTC market is expected to be $8 billion reflecting a dramatic increase in the type of product developed and marketed by Trinity. The traditional method of practising laboratory medicine is to take the requisite sample (typically blood, urine or stool) from the patient and to submit this to the laboratory for analysis. After a delay of days or sometimes weeks the result is communicated to the patient often by means of a return visit to their physician. This method is expensive, time consuming and may be prone to error through sample mix-up or miscommunication of the result. Fortunately, the emergence of rapid and simple diagnostic tests allows for testing to be performed by healthcare professionals in front of the patient (point-of-care) thus providing a timely result which allows for the appropriate action to be taken while the patient is present. These rapid tests are as accurate as laboratory tests and are more cost effective. Some rapid easy-to-use tests not only have significant market potential in the POC segment but also have significant OTC potential. Home testing ensures that individuals can establish their own health status in the privacy of their own home and determine whether they need to visit their Doctor. Some rapid tests such as Trinity's Uni-Gold pregnancy test are available for both POC and OTC use and indeed may be used in the clinical laboratory setting where a rapid result is called for. Thus rapid tests have the potential to address all three segments of the diagnostic market. Trinity's strategy is to develop a significant presence in all three segments of the diagnostics market so that it can fully exploit its technology base. While Trinity is primarily focused on developing rapid unitised tests for the POC and OTC segments, the Company also has a broad portfolio of tests directed towards the clinical laboratory segment.
As Trinity entered 1996 the Company had three products in the market, SeroCard HIV, SalivaCard HIV and Uni-Gold hCG (pregnancy). During 1996, ten new products were developed by Trinity's research and development team in the Dublin facility. With a further 10 products scheduled to emerge from research and development in 1997, the Company has an impressive product portfolio with which to drive sales growth in the coming years. The acquisition of Clark Laboratories has further expanded Trinity's product portfolio with the addition of a range of infectious disease and autoimmune tests.
Uni-Gold In July 1996, Trinity launched two Uni-Gold tests, for HIV and Hepatitis B, at the American Association of Clinical Chemistry meeting in Chicago. These tests are unique in that they require the addition of just one drop of blood, serum or plasma to the test device to determine the HIV or Hepatitis B status of a patient. The crucial difference between Uni-Gold and existing rapid tests on the market (including Trinity's SeroCard) is that the number of steps to obtain a result is reduced from 7 to 1. This development should enable Trinity to take a major market share in the existing clinical laboratory rapid test market. However, most importantly, the availability for the first time of a simple easy-to-use, one-step whole blood test will open up a potentially huge new market at the POC and OTC level. Trinity has commenced marketing both products through its existing distributor network and is seeking product approval on a country by country basis. The first orders for these products have been received for shipment to customers in the Middle East and Africa.
FDA Submission In December 1996 Trinity submitted its Uni-Gold HIV test to the Food and Drug Administration (FDA) for approval for use in the POC market. This represents the first ever FDA filing of a one-step HIV test. While the product is designed to be used in both a self-test (OTC) and Physician's office setting (POC), the current regulatory environment, while permitting home collection, does not allow self-testing. Therefore, Trinity's submission is confined to use of the product in a Physician's office, clinic or emergency room. The current advances in HIV related therapeutics, growing societal acceptance of HIV infection and increasing patient autonomy are among the factors which, in Trinity's opinion, will eventually lead to the approval of a one-step home test available through the Pharmacist. At the appropriate time, Trinity will be well positioned to make a further submission for approval of this product in the OTC market. Trinity believes the availability of this 10 minute Doctor's office test coupled with the proliferation of managed care programs will create a significant new market. Such a test will not only help control the disease but also help patients who have recently been infected. The importance of early diagnosis of HIV infection cannot be over-emphasised. According to the Centre for Disease Control (CDC) about 1/3 of people with AIDS were first tested when they had already progressed to the disease i.e. nearly 10 years after infection has occurred. If viral load is reduced early, progression of the disease can be delayed and the life of the patient can be lengthened significantly. The launch of Uni-Gold HIV and Uni-Gold Hepatitis B is a culmination of three years hard work and dedication by Trinity's scientists. Uni-Gold is an enabling technology - a diagnostic platform suitable for many tests. Trinity's first tests utilising this platform are Uni-Gold HIV and Hepatitis B. We are currently expanding our Uni-Gold product line across a range of infectious diseases and other markers. The range of new Uni-Gold tests will ensure success in existing clinical laboratory markets and create substantial new opportunities in the POC and OTC markets.
Uni-Gold H. pylori The development of Trinity's Uni-Gold H. pylori test is progressing well and the product is expected to enter independent trials in quarter 2 of this year. The Company is in discussions with a multi-national company with respect to a supply agreement. Helicobacter pylori (H. pylori) is a bacteria which infects and inflames the stomach lining. It is the cause of approximately 90% of peptic ulcers, gastritis and is also believed to be a primary carcinogen leading to the development of stomach cancer. It is estimated that 1/3 of the world's population are infected with H. pylori. The current market is estimated at $100m and growing at 30% pa. Traditional testing methods such as endoscopies are expensive and invasive, requiring the insertion of a tube down the patient's throat. Rapid tests are non-invasive and yield accurate results within 5 minutes. The initial market for this test is in the physician's office where treatment can be prescribed following a positive diagnosis without referral to a Gastroenterologist.
Uni-Gold Chlamydia Chlamydia is the most common sexually transmitted disease with an estimated 4 million new cases of infection each year in the U.S. alone. Clinical studies show that many people infected with Chlamydia demonstrate no symptoms. Asymptomatic infection in women can persist for up to 15 months. Chlamydia can make men infertile and in women, if untreated, it can cause pelvic inflammatory disease, abnormal pregnancies, miscarriages, and infertility. The CDC has recommended routine screening of those with multiple sex partners as the disease can go undetected for such a long time. Trinity's Uni-Gold Chlamydia test is in independent trials in three European sites and discussions are well advanced with a potential multi-national marketing partner.
Uni-Gold PSA Prostate cancer is a leading cause of death in men. Prostate specific antigen (PSA) tests are routinely used to screen for the presence of the disease. PSA is an important indicator of prostate cancer and Trinity's Uni-Gold PSA one-step test will have market potential both in POC as a routine screening mechanism and additionally in the OTC market where men in the higher risk category (over 50) could screen themselves annually in the privacy of their homes. In internal trials, Trinity's product has shown good correlation with laboratory based PSA tests and the Company is now in the process of selecting sites in which to conduct independent trials.
Uni-Gold Strep A Strep A is a major cause of throat infection and a routine complaint at the Doctor's office. On-site testing with rapid results can reduce repeat visits and expensive clinical laboratory testing. Once diagnosed the Doctor can correctly prescribe antibiotic treatment. The market for Strep A testing exceeds $70 million in the US. Trinity's research and development programme for Strep A is nearing completion and the Company expects to file with the FDA later this year. A U.S. distribution partner has already been identified.
Other Uni-Gold Projects Trinity has a number of other Uni-Gold rapid test products in development. Among these is the development of Uni-Gold HIV tests utilising saliva and urine as the sample. Trinity already has significant expertise in the field of saliva testing with its SalivaCard HIV product and is applying this expertise to its Uni-Gold format to develop a one-step saliva HIV test. In addition Trinity has signed an agreement with Calypte Biomedical Corporation of Berkeley, California to develop a one-step urine-based HIV test. The feasibility phase of this project is ongoing. If this proves successful and results indicate that an assay can be developed with desired specifications, then the two companies will jointly develop the product and share marketing rights worldwide with the product being manufactured by Trinity. A rapid urine based HIV test would be particularly suitable for the OTC market.
The Company has identified a number of significant market opportunities in the $16 billion laboratory testing area. As a result, during the year, the Company launched a number of enzyme linked immunoassay (EIA) laboratory tests in niche markets which it had identified. These products are generally sold in Europe and North America and thus have the advantage of developing Trinity's sales and distribution base in these areas. These products include Adenovirus, Rotavirus, C. difficile, Respiratory Syncytial Virus (RSV) and Osteocalcin. During the year the Company signed a contract with a German company worth over $1 million a year for the supply of Adenovirus, Rotavirus and C. difficile. These viruses and bacteria are a major cause of gastrointestinal complaints. Adenovirus and Rotavirus are extremely contagious and cause serious diarrhoea in infants. Thus the identification of patients infected with the virus is crucial in order to stop its spread within a hospital situation. Rotavirus has been submitted for approval to the Paul Erhlich Institute in Germany and to the Food and Drug Administration in the U. S. Given the success of this range of products, the Company is developing further tests to detect other gastrointestinal diseases including Cryptospordium, Giardia, E. coli and Entamoeba histolytica. This is a fast growing market with few competitors and commands high margins. Trinity has already signed contracts for the sale of some of these products in other European countries Trinity also developed a respiratory syncytial virus test (RSV) during the year. This is an infection which causes serious breathing difficulties in infants. It is typically sold in conjunction with other infectious virus tests like Adenovirus and Rotavirus. Trinity will shortly submit this test to the FDA for approval. Trinity launched its Osteocalcin assay in April of 1996. Osteoporosis diagnosis is a fast growth market currently estimated at $2 million per annum. The product which diagnoses Osteoporosis and monitors therapy has demonstrated excellent performance in clinical trials and is approved for sale in Germany, Italy, Belgium, Japan, Ireland and the United Kingdom. Trinity is working with the University of Galway to develop further markers for Osteoporosis and extend its involvement in this area
Clark Laboratories The acquisition of Clark Laboratories gives Trinity a line of products which fits very well with the plate tests that Trinity has already developed. Clark has two ranges of clinical laboratory tests, one for infectious diseases such as Toxoplasmosis, Cytomegalovirus, Rubella, Herpes Simplex, Measles and Mumps and another line of products to diagnose and monitor autoimmune disorders such as rheumatoid arthritis. The addition of these products gives Trinity a very comprehensive range of infectious disease and autoimmune tests for the clinical laboratory market. In addition to expanding Trinity's product portfolio Clark has an excellent 24,000 square foot FDA and ISO 9001 registered facility in Jamestown, New York. This gives Trinity an excellent base to expand its U.S. operations and develop its relationship with Carter Wallace. Clark currently supplies Carter Wallace with all Clark's range of FDA approved diagnostic kits in the U.S. Trinity also intends to introduce Clark's products to the international markets Trinity is already serving. In addition many of Clark's products have rapid applications and Trinity will have the opportunity to adapt these products to its Uni-Gold rapid format.
Trinity has developed a dual marketing strategy to exploit the worldwide market for its products; attracting strategic partners and developing an international distributor network. Trinity recognises the advantages of marketing its product through major multi-national companies who have the requisite distribution network and financial resources. Trinity has had considerable success in 1996 in attracting strategic partners to market its products worldwide. In addition to its U.S. OTC pregnancy test customer, Trinity has added SmithKline Beecham, Bayer Diagnostics and Carter Wallace to its list of marketing alliances. In April 1996, Trinity signed a marketing agreement with Bayer Diagnostics of Singapore for the distribution of Trinity's rapid HIV and pregnancy tests in eight Far Eastern countries. The agreement covers Trinity's first generation of HIV tests, SeroCard and SalivaCard. Initial shipments have been made and market penetration is continuing in these areas. In June 1996, Trinity signed an agreement with SmithKline Beecham International for the distribution of Trinity's SeroCard HIV and SalivaCard HIV in certain parts of Africa. SmithKline Beecham sell the product under their own label and are currently obtaining Regulatory Approvals. Trinity is currently in discussions with SmithKline Beecham about extending the range of products beyond SeroCard and SalivaCard and into Uni-Gold tests. The acquisition of Clark Laboratories and their very close relationship with Carter Wallace in the United States gives Trinity another excellent marketing partner. Clark sells all their EIA plate range through Carter Wallace in the U.S. Trinity's international distributor network expanded considerably during 1996 and additional distributors have been introduced through the acquisition of Clark Laboratories. These developments should ensure sales growth in the future.
1996 was an important year for Trinity in that it reported a virtual operating break-even and laid the foundations for future revenue and profit growth. During 1996 Trinity introduced ten new tests, invested heavily in research and development, submitted two tests for FDA approval and developed alliances with some major multi-national companies. These factors along with a virtual break-even for 1996 and the recent acquisition of Clark, have laid the foundations for revenue and profit growth in 1997 and beyond. Trinity reported a loss before exceptional charges of approximately $50,000 for the year ended 31st December 1996. Trinity achieved this while increasing its gross research and development expenditure to $1,983,000 up from $158,000 in 1995. The Company has offset research and development grants receivable of $537,000 against this expenditure. These grants are part of $800,000 awarded to the Company by the European Community during 1996. Trinity's consolidated revenues for 1996 were $7,152,000 compared with revenues of $9,908,000. This decrease in revenues was mainly due to the timing of shipments to Trinity's U.S. OTC pregnancy test customer. The introduction of a new mould for this product line meant that inventories of the old moulded product were run down in quarter one and quarter two explaining the decrease in revenues. During the last two quarters, shipments increased and are expected to continue to do so for the remainder of fiscal 1997. Trinity's loss was increased to $792,000 due to two exceptional charges; An unrealised exchange loss of $390,000 and a legal charge of $350,000. The fall in the U.S. dollar compared to the Irish pound during the fourth quarter of 1996 resulted in a non-cash unrealised foreign exchange loss of $390,000. This has no affect on the daily operations of the Company in that it conducts the majority of its transactions in U. S. dollars. Additionally, the Company made a provision of $350,000 representing legal expenses and damages relating to a legal case. Trinity Biotech continues to maintain a solid financial operating base with over $5
million in cash at the year end and total assets of over $13 million. Main Page - Overview - Products - Shareholders - Press Releases - Contact Us |
