This excerpt taken from the MTOX 8-K filed Apr 20, 2007.
- Feltl - Analyst
Kevin or Dick, I was just wondering, who are your main competitors in the space you're in?
Well, we are in a number of spaces. In the clinical trials area there are three or four very large CROs that we compete against, and then it's fairly diffuse after that. In the drugs-of-abuse and the laboratory, the principal competitors are both large public companies, Quest and LabCorp. In the device business, as we've stated before, there are a fair number of small private companies and one or two larger public companies that we compete against.
This excerpt taken from the MTOX 8-K filed Oct 20, 2006.
- Feltl Analyst:
Yes. Okay, thank you.
Yes, to follow-on the subject of clinical trial services, could you give us a bit of a feel for the dynamics of the market and the competitive landscape? Is it a couple larger competitors? Are there a lot of other folks your size now out there? And also, related to how you've grown the business, has it been growing with the same set of customers, or have you been successful adding to your group of customers?
Steve, this is Jim. Really, the best way to answer that is that it's a very large market, and there are various-sized pharmaceutical companies that can be targeted. Obviously, you have the large pharma group that would include people like Merck and Pfizer, and people of that nature. They tend to have long standing relationships, either with laboratories or with clinical research organizations and we have tended not to, at least initially, target those companies as our primary focus. Where we have spent a fair amount of time is in the, what we would call next layer down-sized company, sort of small to mid-sized pharmaceutical sponsors, as well as biotech companies.
And one of the things that differentiates us, and I think gives us somewhat of a unique position in that market, is there are a number of laboratories that perform what we call central lab services, where you're doing basically clinical chemistry testing for volunteers in various trials. And so that's a bit of a crowded space, but where we've done very, very well with sponsors is in our bioanalytical area, where we've actually done a fair amount of assay development and PK work. And it's relatively rare that a laboratory has both central lab services capabilities as well as bioanalytical capabilities. So it gives us a nice position in the market to be able to play in 2 different areas. Then, as it relates to the existing customers versus new customers; probably, our growth has come primarily from new relationships. One of the things that we're going to be targeting in terms of strategic activity next year, when we get our West Coast and East Coast sales managers in place, is to extend our relationship with existing customers so that we're receiving additional trials from those organizations. We have done a very good job at initiating new relationships with new sponsors, but we would like to deepen and widen our relationship with existing pharmaceutical sponsors.
That's very helpful. Now to just switch gears a little bit, you mentioned your progress with eChain®, and if I could ask you, it seems like it's tracking at least consistent with your goals for actual installs for the year. When do we get, or where do we get to the point that you can leverage this high-tech network of patient collection centers?
Well, there's been some leveraging. What we had decided strategically, was that we would build the network and then we would start to market it on a national basis to large national customers and that has been our focus now for the last 6 months. What we're finding though, is a number of these occupational health clinics that have installed eChain® to be used with either existing MEDTOX clients, or they're interested in working with us on future clients, have actually found the functionality of eChain® to be very appropriate for their own local customers. So we've had a number of these occupational health clinics switch their business from other laboratories to MEDTOX in order to use the benefits of eChain® with their own local, smaller companies, but in the local area. And so we've seen some revenue growth from that activity. We will start the national marketing probably right after the first of the year. We will get it all organized this quarter, but sending out information and contacting people at the end of the fourth quarter is not the best time to do it.
That's real helpful. Now, do you think eChain® and some of this local business that it's driven to you has meaningfully increased your new customer growth and your new business growth in the workplace drugs-of-abuse business?
Not yet. So that hasn't been a driver yet. Okay. That's real helpful. Thanks again, guys.
Yes, I wanted to follow-up, if I could. You guys mentioned that the ER product was ramping. You've shipped just a handful and it sounded like you guys were actually ramping very quickly, in terms of 300 being produced in the fourth quarter. Can you place all those that you can build at this point? Would you kind of just talk about what you expect over maybe the next 12 months, either in terms of placements and/or what that might mean in terms of revenues?
Brent, this is Jim. I think the best way to answer that is there's a certain amount of what I would call pent-up demand and interest in the reader. A number of people have seen prototypes of it and have a great interest in it. We believe the 300 units will largely meet that demand, in terms of, new placements with hospitals that have yet to see it, or spend any time analyzing what the reader could do for them. That's a bit of a wait and see attitude, and the nature of the production schedule is that it can be ramped up or down as market conditions warrant. So it's got some flexibility built into it, but we feel pretty confident that the 300 units will be placed fairly quickly.
Okay. Very good, I appreciate it. Thanks.
This excerpt taken from the MTOX 8-K filed Jul 21, 2006.
Feltl and Company - Analyst
Okay. And lower detection levels were a major force in winning this business?
Yes, absolutely. And again, the key here is this is probation. So a lot of people are not obviously incarcerated. So there is the opportunity to take drugs at lower levels, but take many of them. SURE-SCREEN® is a very good device to catch people doing that. And then the DARS training also gives some visual representation to the officer as to whether a person is impaired for drugs.