MEDITE Cancer Diagnostics, Inc ® (MDIT)
MEDITE® Group is a medical technology company specializing in the development, engineering, manufacturing and marketing of premium medical devices and consumables for detection, risk assessment and diagnosis of cancer and related diseases. MEDITE is poised to become a disruptive force from rapid revenue and market share growth resulting from the introduction of major innovative products in the multibillion dollar global histology and cytology cancer detection marketplace. Depending upon the type of cancer, segments within the current target market of approximately $5.8 billion are growing at annual rates between 10 and 30%. MEDITE anticipates significant growth in revenue and earnings over the next years from several growth trajectories.
Cancer is a major threat for mankind and the recently published “World Cancer Report 2014” by the World Health Organization, states that the number of cases will increase by about 57% to
22 million cases in the next two decades. At the same time cancer deaths will rise from 8.2 million to 13 million per year.
MEDITE’s current and future products will assist in the early diagnoses of cancer with superior sensitivity for detecting precancerous and cancerous conditions and provide the basis for more efficient and cost effective treatment through superior specificity which eliminates unnecessary tests and treatment for benign conditions originally suspected as precancerous or cancerous. The net effect of utilizing MEDITE’s anatomic pathology (tissue based) and cytology (cell based) products will result in more lives saved at lower costs.
The first avenue of growth is the recent launch of new products and the development of highly innovative new products expected to launch in the next few years. The second represents several new initiatives including our joint venture with UNIC Medical of China along with recently executed distribution contracts in the US, Europe and China. The third is the eventual impact from the recent merger transaction with CytoCore (CYOE), a 14 year old venture stage American public company with significant new scientific advances in cervical and breast cancer biomarker and screening technology which are synergistic with MEDITE’s existing product lines.
First half revenue growth of 32% to a record $5.9 million and operating profit of nearly half a million over 4 times the amount of operating profit for the first six months of 2013 reflects the initial success of MEDITE’s strategy. Since historically 35 to 40% of annual sales occur during the fourth quarter, revenue and profitability for 2014 should accelerate during the latter part of 2014. In addition, the combination of the two companies has resulted in significant costs savings, including relocation of the headquarters to Orlando, Florida and relocation of CytoCore’s Chicago research lab.
Since the current management team purchased MEDITE 8 years ago, the company has been focused on the development of new products while maintaining profitability. With first time access to the public capital markets facilitated by the CytoCore merger, Medite along with its partner, UNIC of China expect to expedite the automation of Chinese anatomic pathology laboratory and cytology systems by completing development of MEDITE’s patented “Lab-In-One” automated system in tandem with the implementation of UNIC’s proven digitization technology for the imaging of tissue biopsy and cell samples. By utilizing MEDITE’s coveted German engineered current and future anatomic pathology and cytology products, UNIC expects to become the first and only company in China with the complete anatomic pathology lab solutions covering slide processing, digitizing and imaging, image analysis, tele-pathology, as well as lab management. UNIC is the founder of the China Association of Pathology Equipment which aims to standardize the lab processes and procedures in China including technician training and continuous education services. This process mandated in China because there are only 200 qualified pathologists for 1.4 billion people with 20,000 hospitals and about 500 new labs being opened every year could become a world standard as “more is done with less” through the results of uniform automation, and digitization utilizing MEDITE’s equipment and consumables such as stains and biomarkers.
Medite has recently received the first successful Chinese FDA registration on two microtome models and is expecting to receive registration on all other equipment within the next weeks.
MEDITE’s patented computer controlled LAB-IN-ONE-System provides a solution to address the increasing demand for anatomic pathology labs as discussed in the latest US laboratory industry journal “CAP TODAY” (August 2014 edition). The market is demanding the following: “more systems are needed to link processing and embedding with robotics …” or statements like “So I can’t take a cassette and put it on an instrument at the beginning and have it come out as a slide at the end” are typical for lab managers all over the world. MEDITE’s proprietary and patented Histo-Revolution concept is going even beyond these wishes: the complete process from the unprocessed tissue up to the stained and coverslipped slide is automated.
As a one stop supplier for anatomic pathology laboratories and its existing business as one of the most experienced supplier in the field of Liquid-Based-Cytology MEDITE’s product line covers the complete laboratory process from the tissue biopsy or the cells to the finished microscopic slide. MEDITE is currently distributing into 70+ countries with the US, China and Europe being its primary growth markets.
In the US market MEDITE recently executed several distribution contracts. General anatomic pathology product non-exclusive contracts with major multi-billion dollar health care product suppliers and direct contracts with three of the largest Hospital Group Purchasing Organizations: HealthTrust, Premier and Magnet. For the cytology product line MEDITE executed contracts with a major US anatomic pathology company. One of these products is already selling very successfully in accordance with an OEM agreement very successfully. All MEDITE products will eventually be sold in accordance with these agreements.
MEDITE is hopeful that sales of CytoCore’s biomarkers for Breast and Cervical Cancers will be launched in 2015 of which modest sales are projected for 2015 and 2016. CytoCore’s believes its proprietary biomarkers and imaging technology developed over the last few years could conceivably detect incidences of cancer currently not detected in today’s multibillion cancer market. These biomarkers could also reduce healthcare cost by eliminating unnecessary testing procedures involving false suspected incidences of cancer. CytoCore’s Breast Cancer “risk evaluation” process using its biomarkers addresses a need for Breast Cancer evaluation for women between the ages of 20 to 40 years old. Self-evaluation is the primary method for Breast Cancer detection for women in this age group. Worldwide, 12.5% or one in eight women are expected to get Breast Cancer during their lifetime.
MEDITE employs over 70 people between the recently relocated worldwide headquarters in Orlando, Florida and the German manufacturing and R&D facility. MEDITE is a well-known innovator in the industry based on the development of the first programmable Multistainer, first three piece Embedding Center and world’s fastest Glass-Coverslipper-Combination System. It is holding and has applied for several patents which it believes have the potential to have a major impact on the anatomic pathology and cytology industry. Chief Executive Officer Michaela Ott and Chief Operating Officer Michael Ott currently own approximately 74% of the combined company. Robert McCullough former CEO and CFO of CytoCore Inc. is Chief Financial Officer. Mr. McCullough recently converted a $3.2 million personal loan to Cytocore into CytoCore’s stock at $.02 per share. In addition, as a condition of the merger all of CytoCore’s employees including Drs. Jolley and Domanik converted the majority of their unpaid wages accrued during the prior four plus years into CytoCore stock at $.02 per share.
Michaela Ott, Chief Executive Officer, email:
Michael Ott, MBA, Chief Operating Officer, email:
Robert F. McCullough, Chief Financial Officer, email:
MEDITE Enterprise Inc., 4203 SW 34th Street, Orlando, FL 32811, USA
Phone +1 407 996 9630, Fax +1 407 996 9631
Forward Looking Statements
This Executive Summary contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, regarding future operating performance, events, trends and plans. All statements other than statements of historical fact contained herein, including, without limitation, statements regarding our future financial position, business strategy, budgets, projected revenues and costs, and plans and objectives of management for future operations, are forward-looking statements. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “will,” “expects,” “intends,” “plans,” “projects,” “estimates,” “anticipates,” or “believes” or the negative thereof or any variation thereon or similar terminology or expressions. We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are not guarantees and are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. Important factors that could cause our actual results to differ from our expectations, include but are not limited to, MEDITE’s ability to maintain and grow its revenues, our ability to integrate MEDITE’s operations with our historic operations, the effect that the acquisition will have on MEDITE’s existing customers and employees, our ability to protect our intellectual property rights, as well as those risk factors that apply to our operations as disclosed in Item 1A of Cytocore’s Annual Report on Form 10-K for the year ended December 31, 2013 and other filings with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on our forward-looking statements, as they speak only as of the date made. Such statements are not guarantees of future performance or events and we undertake no obligation to disclose any revision to these forward-looking statements to reflect events or circumstances occurring after the date hereof.
The financial projections contained herein are “Forward Looking Statements” and were developed for internal purposes by management based on a number of assumptions, which are set forth in more detail in our internal records. Although management believes that their assumptions are reasonable, projections are necessarily speculative and unanticipated events and circumstances are likely to occur. Actual results realized during any future period are likely to vary from the projections and variations and may be material and adverse. We make no representation or warranty as to the accuracy or completeness of any projections and readers are cautioned not to place any reliance on any of the financial projections contained herein