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Calypte Biomed
(OTC BB: CALY) In the News Again- Penetration of Chinese Market Appears
Imminent |
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Like a plane stopping to refuel,
the price of Calypte has completed a round trip from the level it
started at in early June. It has come back down nearly as quickly as it
went up, and now seems to be taking off again.
Fueling the rebound of Calypte
is another news release today which suggests they are on the verge of penetrating
the enormous Chinese market. The World Health Organization estimates there
may be as many as 5 million AIDS cases in Asia, the vast majority of which
are in China.
The Chinese government has been reluctant
to admit the extent of the problem. However, many rural villages are rapidly
losing family bread winners to this plague. Nearly the entire adult population
of some villages was infected almost simultaneously in the 1990's. Poor
farmers flocked to blood collection stations whose unsterile practices
introduced hefty doses of HIV. The Chinese government has begun to aggressively
and publicly address this huge problem.
Last month the company announced
progress on penetrating the enormous West African market. Today the company
announces it is making some headway on penetrating the Asian market.
According to today's press release,
Dr. Luc Montagnier, co-discoverer of HIV-1 and discoverer of HIV-2,
has just concluded a four day speaking tour in China. In presentations
to several government agencies, Dr. Montagnier spoke specifically about
the advantages of Calypte's urine based HIV test technology. The
company believes this is the first step towards getting a foothold in the
enormous Chinese market.
If the corporate momentum can continue,
the rebound process for this stock might also continue.
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Capital
Structure |
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Recently there has been a considerable
flow of inaccurate information being spread on Calypte's capital
structure. Despite incorrect rumors to the contrary, as of today there
are 84.7 million shares issued and outstanding on Calypte Biomed.
Recent SEC filings have some investors believing this number could be higher.
This is not the case as all shares mentioned in recent filings were already
included in the computation.
Based on today's closing price, the
entire market value of the company is approximately $13 million.
Considering they are the only company in the world with an FDA Approval
for a urine based AIDS test, this seems to be a valuation from which investors
could make money.
Looking forward, this gives us a
basis on which to formulate an opinion concerning the upside potential
for Calypte. If Calypte can continue to demonstrate the ability
to penetrate the international market, we believe the company could eventually
be valued in the $50 million range by the market. Furthermore,
if the company can continue developing its next generation technology,
a rapid and instantaneous test kit which works like an over the counter
pregnancy test, the market value could end up considerably higher.
However, as we mentioned in our last
edition, one of the reasons for the recent decline in the stock is probably
related to Calypte's need for capital. The company has been selling
shares at a discount to the prevailing market to raise much needed cash
to fuel growth. Fund managers have been quick to lock in profits, choosing
to take very little risk in the current market environment.
Calypte requires another $3
to $4 million to fund its growth throughout the remainder of the year.
We believe there is a possibility the company could end up the year with
150 million shares issued and outstanding after raising all the required
capital.
Therefore, we believe the stock has
the potential to trade to about the $.33 range, or about
twice today's closing price. This would give the company a $50 million
market value with 150 million shares issued and outstanding. This is just
a guess, as the higher the stock trades, the less dilution will be required
to finance growth.
Calypte is always in the top
ten volume leaders for stocks under $.25 traded on the bulletin
board, and quite often achieves the number one spot. Therefore, the ultimate
dilution may not be as sizable as we are suggesting.
The downside risk, as always with
any $.16 stock, is that you could lose your entire investment. However,
in this case the risk/reward ratio is compelling.
Here is the complete text of today's
news release for your review:
| Press Release Source:
Calypte Biomedical Corporation
HIV Pioneer Encourages
Chinese Health Authorities to Take 'Full Advantage' Of Calypte's HIV-1
Urine Screening Test
Tuesday September 3,
4:05 pm ET
ALAMEDA, Calif., Sept.
3 /PRNewswire-FirstCall/ -- Calypte Biomedical Corporation (OTC Bulletin
Board: CALY - News), the developer and marketer of the only two FDA-approved
HIV-1 antibody tests that can be used on urine samples, announced today
that HIV pioneer Professor Luc Montagnier, co-discoverer of HIV-1 and discoverer
of HIV-2, has suggested that Chinese health authorities take full advantage
of Calypte's FDA-approved urine screening test for HIV-1 antibodies. He
made these recommendations during a Calypte-sponsored, four-day speaking
tour of People's Republic of China in which he spoke with a number of government
agencies, including the Chinese Center for Disease Control, the National
Center for AIDS Prevention and Research, and the State Drug Administration.
He was also an invited plenary speaker at the first national meeting of
the Chinese Association of Preventive Medicine held in JiNan, and gave
a second talk at the Association's Epidemiology Section.
At each stop along the
way Professor Montagnier discussed a range of HIV-related topics, but focused
primarily on advances in diagnostics, therapy, and the vaccines. At each
venue, Dr. Montagnier spoke at some length about the importance of testing
and counseling in general, as well as the specific advantages of Calypte's
novel urine-based tests for exposure to HIV-1.
"Clearly, testing and
counseling form the first steps of the HIV control process. I believe that
the advantages of urine testing with respect to safety, logistics, and
patient appeal can be of great benefit in many settings in China, and I
have encouraged the Chinese authorities to take full advantage of Calypte's
novel technology. I have also indicated that my personal experience with
the urine test demonstrated equivalent results to serum testing," Dr. Montagnier
stated.
"At this point in time,
we do not know enough about the nature of the Chinese HIV/AIDS problem,
and if the spread of the disease will follow the 'northern model' seen
in North America and Western Europe, or the more troubling 'southern model'
we see in Africa and Southern Asia for example. As such it would be prudent
for the Chinese authorities to plan for the worst and hope for the best.
I urge the authorities at the highest levels to declare HIV/AIDS management
a national priority, and to apply the resources necessary to tangibly impact
the problem," said Dr. Montagnier.
Dr. Montagnier further
stated, "Education, testing and counseling, coupled with contemporary anti-retroviral
HAART, (Highly Active Anti-Retroviral Therapy) therapy are critical components
of HIV control. Although the cost of HIV therapy has historically been
high, I believe that between the reduced drug prices offered by pharmaceutical
companies, and the future possibility of significantly shortened courses
of HAART, it is appropriate to make these therapies available immediately.
The availability of therapies not only reduces the spread of the disease,
but also encourages more people to be tested."
Professor Montagnier's
speaking tour was widely covered by the Chinese national and regional press.
He discussed his views on the HIV/AIDS problem and the use of the urine
tests in at least six television and newspaper interviews. Many newspaper
articles covering Dr. Montagnier's visit have already been printed at this
time, and additional coverage in local and regional papers is anticipated.
Included in future publications will be an interview with Professor Montagnier
conducted by the official newspaper of the Chinese Ministry of Health,
with a circulation of 300,000.
"We are fortunate to
have Dr. Montagnier as a member of our Scientific Advisory Board and, since
June of this year, as a consultant to the company," stated Anthony Cataldo,
Calypte's Chairman. "To have the personal support of such an eminent leader
in the HIV field, and to be able to sponsor trips such as this one, not
only help us to publicize the unique advantages of urine testing, but also,
to provide a rare and valuable service to HIV professionals around the
world," Mr. Cataldo added.
Calypte Biomedical Corporation,
headquartered in Alameda, California, is a public healthcare company dedicated
to the development and commercialization of urine-based diagnostic products
and services for Human Immunodeficiency Virus Type 1 (HIV-1), sexually
transmitted diseases and other infectious diseases. Calypte's tests include
the screening EIA and supplemental Western Blot tests, the only two FDA-approved
HIV-1 antibody tests that can be used on urine samples. The company believes
that accurate, non-invasive urine-based testing methods for HIV and other
infectious diseases may make important contributions to public health by
helping to foster an environment in which testing may be done safely, economically,
and painlessly. Calypte markets its products in countries worldwide through
international distributors and strategic partners. Current product labeling
including specific product performance claims can be found on our website
at www.calypte.com .
Statements in this press
release that are not historical facts are forward-looking statements, including
statements regarding future revenues and sales projections, plans for future
financing, the ability to meet operational milestones, marketing arrangements
and plans, and shipments to and regulatory approvals in international markets.
Such statements reflect management's current views, are based on certain
assumptions and involve risks and uncertainties. Actual results, events,
or performance may differ materially from the above forward-looking statements
due to a number of important factors, and will be dependent upon a variety
of factors, including, but not limited to, our ability to obtain additional
financing that will allow us to continue our current and future operations
and whether demand for our product and testing service in domestic and
international markets will continue to expand. The Company undertakes no
obligation to publicly update these forward-looking statements to reflect
events or circumstances that occur after the date hereof or to reflect
any change in the Company's expectations with regard to these forward-looking
statements or the occurrence of unanticipated events. Factors that may
impact the Company's success are more fully disclosed in the Company's
most recent public filings with the U.S. Securities and Exchange Commission
("SEC"), including its annual report on Form 10-K for the year ended December
31, 2001 and its subsequent filings with the SEC.
For further information,
please contact Joe Bunning of Sitrick and Company, +1-310-788-2850, for
Calypte Biomedical Corporation.
--------------------------------------------------------------------------------
Source: Calypte Biomedical
Corporation |
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