For Immediate Release
BioCurex Update
RICHMOND, British Columbia - October 6th, 2005
As a
result of frequent discussions with shareholders, the Company wishes
to update investors and interested others on several specific issues
of importance:
-
The current state of our
technology.
-
The size and scope of
our targeted markets.
-
A discussion of our
financing procedures.
-
Pink Sheets and
alternative listing
-
Investor Relations
-
Investment Banking
-
Our
Conclusions
RECAF Technology:
The RECAF
technology has been developed in formats for tissue testing and for
blood tests to date. We have focused the corporate efforts
towards licensing of the technology rather than continued supportive
and validating testing at other facilities for many reasons. For
example, the current version of our RECAF blood test uses a trace
amount of radioactivity (RIA). Current security regulations make it
much easier to test blind serum samples in our facility rather than
shipping out the kits containing radioactivity to different locations.
Due to the workload that this procedure represents, we have given
priority to companies interested in licensing the technology rather
than scientists interested in publishing results since the major
biopharma companies invariably do their own technical due diligence
and do not rely significantly upon other data. However, it is
anticipated that publications by independent researchers will follow
in the short term.
We have been asked frequently about the progress
of our major licensee. Confidentiality terms preclude us from making
any specific comments at this time. We cannot speculate about
launching dates, milestone dates or values. Nothing has changed since
we signed the agreement with the exception of the work which is
advancing. In the most general terms, we are very pleased with the way
things are moving along.
BioCurex is not only based upon a blood test for
cancer detection. It is based on the many applications of the cancer
marker RECAF, of which blood testing is only one. That is a main
component of our strength because it minimizes the risk of having a
one-technology/product company even though each application is very
large.
As we mentioned in previous communications, our
strategy is to focus on the development of an application of our
technology to the point of ‘proof of concept’; then demonstrate it to
possible licensees. Further, as we subsequently undergo the licensing
efforts for that technology (as we are doing with the blood tests), we
start working on the next RECAF application. In the past few months,
we have made substantial progress towards the clinical work previously
announced (imaging and therapy). The results will be the subject of a
new patent application and therefore, for the time being, we cannot
disclose our findings.
Markets:
The following are market estimates based on
information from Kalorama Information, statistics from the American
Cancer Society, and the results we published in the peer reviewed
journal IVDT:
(i)
The PSA (a marker for prostate tumors) market is approximately
$450M per year.
(ii)
RECAF may be used in conjunction with PSA (men), but since
RECAF also works in women for other types of cancers, the number of
potential users (and market size) therefore doubles.
(iii)
Our studies indicate that RECAF can detect most types of
cancer, including breast and lung cancers. Whereas in the USA 230,000
new cases of prostate cancer are diagnosed per year, the number for
lung and breast cancers is 390,000.
All of the above suggests a potential RECAF
market size in excess of $1B/year. Even assuming a modest albeit
typical 10% royalty, this would represent $100M/year in licensing fees
without commercialization or manufacturing costs. Considering a 15%
profit over gross sales, $100M in royalties would be the equivalent to
gross sales of $650M/year, without the liabilities and investment
involved in manufacturing and selling a product.
It is uncertain at this time what percentage
of that market potential will be achieved by BioCurex - Therefore,
this analysis should NOT be construed in any way as a revenue
projection and should not be considered in the decision to buy or sale
shares of the company.
Financing:
Since early 2003, when new management took over,
we have financed the company at the required levels by selling
restricted stock at a limited discount to the market. It is doubtful
that we would have been able to secure a PIPE or other similar
financing instrument in exchange for 12 month restricted stock at a
limited discount. We have also avoided any toxic financings.
Therefore, the effort has been successful in minimizing dilution while
providing necessary funds for corporate development.
This micro-financing practice has served us well:
We have become ‘meaner and leaner’ and we have avoided the usual
financing cycles that go from the wasteful euphoria when funds are
secured; to the weak negotiation position when funds are short and
desperation sets in.
We have been able to develop a technology that we
have licensed to Abbott Labs and advance a great deal on other
technical fronts. In the past 2 years, contrary to the occasional
commentary that the company may be under-funded, we have not once had
any difficulty in meeting our obligations.
Pink Sheets:
In April 2004, the SEC imposed a 10-day trading
suspension on BOCX. The ensuing investigation resulted in no further
action to date. The Company and its Management fully cooperated with
the investigation while maintaining our position that we had done
nothing wrong as was clearly expressed in the press releases following
the suspension.
A suspension for longer than 4 trading sessions
results in an automatic delisting from the OTC:Bulletin Board.
Re-listing requires a dealer/broker to ‘sponsor’ the company and that,
in turn, demands the pertinent due diligence which is more demanding
when there has been a trading suspension. The broker/dealer must
demonstrate to the NASD that they know the case in depth and they have
to make sure that there are no irregularities in the company. In
exchange for their efforts, the sponsor becomes the only market maker
allowed to make a market in the stock for one month. Many consider
that fact as a very small incentive compared to the amount of work
required, and this makes the process of obtaining a sponsor more
difficult. That is also why we do not approach more than one
broker/dealer at a time.
When the NASD receives a request from one of its
members to re-list a company, it makes sure that the sponsor has done
its due diligence by providing a number of questions to the sponsor.
The broker/dealer might then realize that it is too onerous a process
to follow, and choose to withdraw the request, as has happened in the
past. However, in that case, even though the questions were directed
to the sponsor, many of them required input from us. Thus, we have
responded directly to the NASD regarding all the questions that have
pertained to the company in order to minimize the number of further
questions asked to another sponsor. It must be stressed, however,
that only a sponsor can obtain a listing.
We shall continue this process as many
times as it takes, as there is more involved here than just a ‘better
exchange’ for trading our shares. There is the vindication aspect that
we feel out company, our management team and our shareholders justly
deserve.
Investment Banking
We have recently selected JP Turner and Company
for their assistance in introducing BioCurex to an advanced level of
the financial community. We are pleased to have a national firm
represent us to their own associates as well as to other firms. We
anticipate many direct and indirect advantages of the relationship due
to their wide ranging contacts and support of our many efforts
detailed above.
Investor Relations companies:
We have hired IR companies for two reasons: One
is to help with the numerous calls we have received, in particular,
following significant announcements. The other reason is to spread the
news of what we are accomplishing to a wider audience. We believe our
technology is significant and will eventually touch the life of many
people that will be diagnosed with cancer. We have been judicious in
the amounts spent and in those cases in which we have used shares to
pay for their services, the end result has generally been positive. We
are aware that the most effective way to obtain a proper
representative valuation of the company is to expose the company to a
greater number of investors.
Conclusion:
In the past 5 years, BioCurex has spent an
aggregated amount of slightly over $7M. Part of that relates to the
expenses for financial statement purposes, of the 'cost' of stock,
options and warrants we have issued for services rather than actual
cash used for operations. We believe that we have been frugal and
effective in managing funds as well as creative in the ways we have
financed the company while keeping the number of shares at a
reasonable value, especially if one considers that a great deal of the
financing had to be done between 10c and 20c per share at one point in
time. We have solid support from long term investors. With that
relatively small amount of money, spent over several years, we have
been able to develop technology that has been licensed by one of the
largest diagnostic companies in the world.
We are also at different stages of the process
with a number of other companies, some of them equally large, some
smaller. Given the semi-exclusive nature of the original licensing
agreement, we must be careful in our selection and think long term. We
are also advancing in the development of the basis for other
applications in the areas of tumor imaging and cancer therapy and we
are finding promising results, which we shall release in due course.
Since new management took over – two and a half
years ago - we have delivered on what we have promised - and that
includes a new way to detect cancer - despite very difficult times for
small cap companies and an arguably unwarranted SEC suspension. In
those two and a half years, the value of BioCurex has increased by
approximately 2,500%. We have vowed to have the company's shares
traded on a better exchange, with recent steps supportive of that
goal. Whatever it takes, we will continue to do what is in our power
to succeed; that is why, at a considerable expense, we keep the
company fully reporting in its financials.
We anticipate a continued expansion in our
company due, in part, to the preliminary results that we are obtaining
with other applications and we are positioning the company accordingly
from a financial point of view. As we have done in the past, we shall
continue our efforts to best manage the interests of our shareholders.
CONTACT:
BioCurex, Inc.
Ricardo Moro
Tel: (604) 207 9150 |
