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Chembio Diagnostics, Inc. Message Board

  • sonomaca sonomaca Jun 2, 2013 10:52 AM Flag

    Vet OEM deal

    This has been discussed for some time. Deal once research/trails complete. In recent IP, CEMI noted $100 million rev potential starting 2014. I usually discount these figures by about 95%, but if a deal yields $5 million for 2014, that's big.

    Anyone care to speculate as to what this might be? Something related to livestock? All very hush-hush.

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    • I suspect dogs and cats. The vet industry needs a win-win solution to testing.

      I suspect it will be virus related as their product handles viruses well. What ever the routine blood tests are will be a potential. Maybe heart worm leaves a trace that Chembios product can read.

      I believe Chembio will lease (license) the rights to their technology with minimum payments for a limited development time. If nothing is developed the rights come back or another term of the contract is negotiated. That approach stops someone from holding the technology from the market without intent to develop and sell.

      The licensee will develop, with Chembios consulting, and pay for any approval process.

      Food creatures are too regulated. That's why I see "pets" as the big opportunity.

    • PRRS. Causes reproductive problems, respiratory problems and poor growth in swine. Test would be used to select breeders, cull carriers, and improve swine meat production 2-4%. It was there for years, but not diagnosable in a fashion that would prevent spread. There are about three strains of PRRS virus that cause major problems. Diagnosing these viruses would be huge. This market is a vacuum.

      Alternatively, if they do the research multiplex for rodent viruses, it would be a displacement market of an existing $120 million per year among CRL, RADIL, Taconic and other smaller test labs. CEMI DPP was already shown to be more sensitive than Luminex for this test.

      Sentiment: Strong Buy

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