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Bioject Vice President Chriss Farrell says the company is eyeing the overseas market for its needle-free immunization technology. The Tualatin-based company earned more than $7 million in revenue last year. |
One of Oregon’s smallest public companies wants to tap the country’s soaring immunization market.
But before Tualatin-based Bioject Medical Technologies Inc. can ride that wave, it needs to catch at least two breaks. It must find more partners, in the biotechnology and retail sectors, to help brand and market its innovative needle-free immunization systems. Bioject also needs a few investors to help it manage any growth should those larger contracts start rolling in.
The $7.3 million company took huge steps toward both goals recently. On the retail side, the Fred Meyer grocery chain will offer the option of needle-free immunizations through Bioject’s Biojector 2000. The Publix Super Markets chain, in the Southeast U.S., will also offer the Biojector option in 52 of its stores.
The companies didn’t disclose terms of those agreements.
Bioject is also pursuing more defense industry contracts. The U.S. military recently tested, to good effect, Bioject’s systems as malaria prevention options.
On the money side, Bioject has signed an agreement that will give it an equity-based line of credit from Boston-based Dutchess Capital Management. The agreement essentially allows Bioject to tap credit lines from Dutchess’s sale of Bioject stock. Those shares must first be registered with the SEC.
Dutchess will purchase the shares from Bioject at a 5 percent discount. The arrangement could bring Bioject up to $5 million over the next three years.
The company will use the money for equipment and other capital purchases.
The announcements capped a good summer for Bioject. The company’s second-quarter revenue, of $2.2 million, doubled its 2010 results. Its six-month revenue of $3.8 million was 81 percent higher than the levels Bioject posted a year earlier.
“These are positive signs for Bioject,” said Steven Prewit, a Schwabe Williamson & Wyatt PC attorney who serves on the Oregon Bioscience Association’s board. “The Fred Meyer deal will help them; their growth is good and they’re about to get the (line of credit) support they want. They’ve always had innovative products, but those are just starting points.”
Yet the company, like many in the biotech sector, faces its share of uncertainty. For instance, Bioject has long alerted investors to its modest capitalization standing. From time to time, the company reiterates its need to seek additional debt or equity financing.
“Our limited amount of additional committed capital, history of recurring losses, negative cash flows, accumulated deficit and lack of sufficient long-term sales commitments are factors that raise substantial doubt about our ability to continue as a going concern,” the company wrote in its most recent quarterly report.
The company also noted that it could need more capital to continue operating next year.
Ralph Makar, the company’s CEO, said the alerts aren’t new to Bioject or other small public biotech operations.
“We don’t do projections or guidance,” said Makar, whose company is traded over-the-counter. “We’ve had those statements in our reports for a number of years.”
Those statements could be long forgotten if Bioject continues to tap the massive immunization market. The injectable treatment sector could reach $49 billion by 2014. According to the Centers for Disease Control, more than 160 million doses of flu vaccine were produced for last year’s flu season.
In Fred Meyer, Bioject has a partner that expects to immunize tens of thousands of customers during the 2011-2012 flu season. The flu season could run between October and May.
The Biojector 2000, with which Fred Meyer pharmacists will work, can deliver medications or vaccines either subcutaneously or intramuscularly. The vaccines are delivered via a sterile single‐use syringe.
The syringe delivers the vaccine through a pore the width of a human hair.
“It gives patients a good option,” said Leon Alzola, Fred Meyer’s director of pharmacy operations. “Every day, we hear from people who hate shots, and there’s a lot of trepidation with getting immunizations. This is a good avenue toward getting more patients immunized.”
Fred Meyer will evaluate the system before next year’s flu season.
“It’s $1,200, and, multiplied by our 130 stores, it’s more than a $100,000 investment,” Alzola said. “But it’s a good option for us.”
A New England Journal of Medicine study on a polio vaccine for infants found that 93 percent of parents preferred the needle-free device. The most frequent comment was that their babies didn’t cry upon receiving the vaccine.
“We never say it’s pain-free, but there’s definitely less of a chance of it,” said Chris Farrell, Bioject’s vice president of finance.
Perhaps Bioject’s biggest sales point is that it eliminates health risks posed by used needles.
“There’s never an opportunity for reuse,” Farrell said. “The reuse of needles is prevalent in developing countries. That’s why we see a lot of opportunities overseas.”
The larger opportunities, though, might come if the company can ink contracts with more Fred Meyer-type businesses. Pharmacists in all 50 states can now administer vaccines, and many are adding flu shots in order to boost their bottom lines.
As a result, the company plans to boost its marketing to all retail pharmacy customers.
“They can market Bioject to their needle-phobic patients, and they also don’t have to worry about disposing needles or getting accidentally pricked” by stray syringes, Makar said.
Chief executive: Ralph Makar.
What we do: Needle-free injection technology.
Location: Tualatin.
Contact: 20245 S.W. 95th Ave., Tualatin, Ore., 97062, 503-692--8001. On the Web at www.bioject.com.