Monday, 16 June 2008

Med BioGene Rounds Third Base - Heading For Home


MED BIOGENE INC.(TSX:V-MBI)

Basic shares: 29.1 million

Fully diluted: 42.2 million

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Akin to the little engine that could, Med BioGene today made a key announcement, which takes it an important step closer to the ultimate reward; namely its first commercialization deal.

Like every successful business, you need the right team to give you the answers and so it was with the news that MBI has pulled together a high profile collaborative group of universities to further increase the accuracy of its new genomic test for lymphoma.

Keep in mind that Med BioGene has already announced that it has been achieving accuracy rates in the 90% range. However, the collaborative working group consisting of Indiana University, Northwestern University and the University of Hong Kong brings new weight to the effort to further increase accuracy as it combines the brainpower and research acumen of the three esteemed institutions.
Another thing the market should note is that these university groups obviously see great potential merit in what MBI is developing. Common sense dictates that the researchers and universities in the working group would not have entertained this undertaking unless they saw value in Med BioGene's developing science.

Understandably, most people would believe that lymphoma is another form of cancer and once diagnosed, treatment must begin. However, the issue if far more complicated than that and bear this in mind:
Lymphoma is the fifth most common cancer in the United States, afflicting approximately 74,000, and killing approximately 20,500, people each year. Lymphoma is a general term for a group of cancers that originate in the lymphatic system and is comprised of more than 42 disease subtypes.

The essence of the science that MBI is developing is its ability to accurately determine what type of lymphoma doctors are dealing with before deciding on the best form of treatment. Not all lymphoma should be treated the same in the same manner.

What's the next step? MBI is very much on the public record as stating its goal is to have its first science commercialized by the end of this year. As such, putting together this esteemed working group was the much needed next step in getting MBI to home base.

The latest estimated market value of LymphExpressDX™ is approximately $600 million per year. The best comparison is Genomic Health (Nasdaq: GHDX), based in Redwood City, California. In 2004, it commercialized Oncotype DX, a (similar) gene expression-based prognostic test for early stage breast cancer. It currently has a market cap of $590 million USD.
To view the full release, click here