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Calypte Biomed
(OTC BB: CALY)- News Pushing Stock Higher In Early Trading |
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Calypte Biomed came to our
attention this past May at the suggestion of one of our members. We started
out by recommending it as a Trading Alert on May 31 at $.139, and were
rewarded with an incredible performance, with the stock trading as high
as $.43 on July 9th, for 244% plus gain over a brief five
week span.
Interest in this company was fueled
by the tremendous reception they received at the semi annual International
AIDS Conference which was held in mid June in Barcelona, Spain. Representatives
from third world countries were trying to place orders for their test kits
at the convention.
This is the only company
in the world with an FDA Approval for an AIDS test kit which
uses urine as opposed to blood to determine if the individual is infected
with the HIV Virus. Urine testing is considerably easier and less expensive.
In 2001 most major US life insurance companies migrated to this test, and
the company was rewarded with $6 million in sales in the
first year of commercial introduction.
Lack of capital nearly forced the
company out of business earlier this year, and the stock traded as low
as $.03 as depicted in the chart. New management is now at the helm, and
the company has been reincarnated.
As you can easily see from the chart
we have provided, the stock has completed a round trip from the May levels.
The company's need for capital has generated an excess supply of stock,
and it has been reflected in the trading level. They have issued shares
at a discount to the prevailing market, and institutional investors have
been quick to pull the trigger, choosing to lock in a small profit rather
than take any risk. After the lessons of the past 2 1/2 years, it is hard
to blame them.
Their reluctance to take risk has
provided your opportunity to get involved at a reasonable price. As noted
in our July
13 edition entitled "Are You Ready for the Next Stock Boom?" we
informed our members the OTC Journal would be focusing a lot of
its attention on good old fashioned penny stocks until a new bull market
emerged.
If you have an appetite for penny
stocks or high risk/high return situations, Calypte Biomed
is a must addition for the speculative end of your portfolio.
The company has a near cult like
following. It is almost always in the top ten volume leaders of stock under
$.25, and often number one. There are currently 78 million shares issued
and outstanding, but we expect that number to go up as the company issues
equity to raise much needed cash.
Even with 100 million shares issued
and outstanding, based on today's price the entire company will only be
valued at $13 million. There has been $90 million invested to date. We
believe this company could easily be viewed as being worth $50 to $100
million as future events unfold, thereby making your upside $.50 to
$1.00 from today's levels.
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Events
Which Could Drive Calypte Biomed (OTC BB: CALY) Much Higher |
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Commercial introduction of the only
AIDS test kit which uses urine brought the company $6 million in sales
in 2001. This is a good start, but is minuscule compared to the potential
market in Third World countries where the AIDS epidemic is raging out of
control.
The cover of the August 26th issue
of Time Magazine is devoted to "How To Save The Earth". The
feature article entitled "The Challenges We Face" points out that the world
population is decelerating. Our population grew 64% from 1950 to 1975,
but slowed to 48% growth from 1976 to 2000. Population growth is now expected
to level off in the latter part of this century, and stabilize at 11 billion
people.
The article also points out population
growth is moderating for all the wrong reasons. Infectious diseases, with
the AIDS virus at the forefront, is primarily responsible for slowing population
growth.
According to the article 68 million
people are expected to die of the AIDS virus by 2020, 55 million of those
on the African sub continent alone. The spread of the AIDS virus is not
only decimating populations in Africa, it is also decimating labor forces,
and in turn decimating entire economies.
In order to stop the spread of the
AIDS virus, you must first identify who has it. Blood testing in the field
in Third World countries in impractical. In the 1800's Native American
Indians were afraid of having their picture taken. In many third world
countries local religious and cultural taboos offer the same irrational
fear of having blood drawn.
Also, blood must be preserved during
transportation to the lab. Urine can be transported at room temperature,
and samples stay viable for many weeks. Therefore, urine testing is much
easier and considerably less expensive.
The future of AIDS testing for Third
World countries lies in a rapid urine test which works similar to a rapid
pregnancy test. A simple drop of urine on a test strip yields an instant
result with a color change.
In today's press release, Calypte
Biomed reveals that they have developed this exact test kit. Using
the already FDA Approved technology, the company has developed a rapid
version which can be self administered, and they have scheduled a pre-IDE
(Investigational Device Exemption) meeting with the Food and Drug Administration
for early October to define and agree to clinical testing plans and requirements
to evaluate its rapid test for the detection of HIV-1 antibodies in urine.
In preliminary tests, Calypte
determined results which have yielded 100 percent specificity and 100 percent
sensitivity in the small sample tested. The approval of such a test will
not require years of clinical trials, as the basic technology is already
approved, and the new version is simply an enhanced version of the existing
test.
The social implications of a rapid
AIDS test kit will be more on the forefront of the FDA's agenda for US
consumers. However, that will not be the case for the international market
where the AIDS epidemic is killing millions.
In fact, the World Health Organization
will begin a 60 day field trial of their existing urine based AIDS test
kit in September. Once approved, Third World Countries will be able to
order test kits, and the World Health Organization will pay the bill.
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Conclusion |
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Penetrating the International market
and the introduction of a rapid version of their existing AIDS test kit
is the immediate future of Calypte Biomed. The market is enormous,
and any evidence of success could yield the $50 to $100 million market
capitalization we believe could be attained, which would put the stock
in the $.50 to $1.00 range, up 400% to 800% from today's levels.
The last surge took the stock into the $.43 range.
Just when these levels can be attained
is unpredictable. It could be tomorrow, or it could take several more months.
The company must first achieve order flow from Third World Countries. Order
flow is already starting from West Africa as was revealed in a press release
on August 7th.
In addition, there seems to be an
excess supply of stock which the market needs to absorb. The excess supply
is finite, the demand can be infinite when the right factors fall into
place. Therefore, if you are interested in becoming a shareholder, you
must ignore day to day fluctuations for the time being. Lightning could
strike at any moment on this one, and you don't want to be on the sidelines
when it happens.
As always, a prudent investor must
assume your loss potential on a $.14 stock is 100%. The company is not
profitable yet, and therefore risky. In this case, the risk is outweighed
by the upside potential of pent up demand in a massive market, and a lock
on proprietary technology. There is no other FDA approved test using anything
but blood for AIDS with the exception of Calypte Biomed.
As we issue this addition, Calypte
Biomed is up 8% on 2.1 million shares of volume in today's trading.
Here is the complete text of today's
news release for your review:
Calypte Biomedical Corp.
(ticker: CALY, exchange: OTC Bulletin Board) News Release - 27-Aug-2002
--------------------------------------------------------------------------------
Calypte to Accelerate
Development of Rapid HIV Urine Test
ALAMEDA, Calif., Aug
27, 2002 /PRNewswire-FirstCall via COMTEX/ --
Schedules Pre-IDE Meeting
With FDA for Early October
Calypte Biomedical Corporation
(OTC Bulletin Board: CALY) the developer and marketer of the only two FDA-approved
HIV-1 antibody tests that can be used on urine samples, today announced
that based upon positive preliminary results which have yielded 100 percent
specificity and 100 percent sensitivity in the small sample tested, the
company plans to accelerate the development of its new Rapid HIV Urine
Test. The Company has scheduled a pre-IDE (Investigational Device Exemption)
meeting with the Food and Drug Administration for early October to define
and agree to clinical testing plans and requirements to evaluate its rapid
test for the detection of HIV-1 antibodies in urine.
"We believe the Rapid
HIV Urine Test is an important product not only for Calypte," stated Calypte
President, Nancy Katz, "but for those developing countries throughout the
world where there is a need for rapid results and a reluctance on the part
of the local population to have blood drawn. It will provide a rapid testing
alternative to other tests currently under development by several companies
that utilize blood specimens. The advantages of urine specimens have been
well established with our existing FDA-approved products. Urine offers
painless, non-invasive sample collection making HIV testing available to
individuals who prefer not to have a blood sample taken."
According to Don Kafader,
Calypte's Director of Regulatory Affairs, "This meeting with the FDA is
an important step in bringing the Rapid HIV Urine Test to market. We hope
to be able to come to an agreement with the FDA concerning the nature and
scope of the clinical investigations and other studies necessary, so that
the review and approval process can be shortened. Our goal is to bring
this powerful new product to market as quickly as possible."
About Calypte Biomedical:
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. When compared with
existing blood-based tests, our testing algorithms are non-invasive, easier
to use, less expensive and have significantly less risk than blood-based
testing, and they have 99.7% sensitivity in subjects previously identified
as HIV-1 infected and 100% specificity in subjects at low risk when combined
with the urine-based Western Blot supplemental test. 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.
Statements in this press
release that are not historical facts are forward-looking statements within
the meaning of the Securities Act of 1933, as amended. Those statements
include statements regarding the intent, belief or current expectations
of the Company and its management. 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 and access funds from our existing
financing arrangements 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
CONTACT: Joe Bunning
of Sitrick and Company, +1-310-788-2850, for Calypte Biomedical Corporation
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