ALDA Pharmaceuticals Corp. (APH)
This is a printer friendly page!
Pharmaceuticals has started to make inroads in the medical market in Canada and the United
States with their Viralex
infection control product with an eye towards consumer markets
CEOCFOinterviews: Dr. Owen, what was your vision when you started Alda and how has it developed?
Dr. Owen: In May
200, Peter Chen, our CFO, and I started a public company under the Toronto Venture
Exchange sponsored Capital Pool Company (CPC) program. The function of the capital pool
company is to use the funds raised in the CPC to undertake a qualifying transaction of a
business concept, which in turn benefits from becoming a public company. We were
introduced to ALDA Pharmaceuticals in January of 2002 and were impressed with the fact
that it has had its first product on the market. We selected ALDA as our Qualifying
Transaction and initiated the regulatory process that was completed in November of 2003,
so we have been public now for almost a year.
CEOCFOinterviews: Will you tell us about the industry in general and what makes T36® better than other products?
Dr. Owen: The industry, in general, is quite competitive; there are a number of infection-control technologies out there. Glutaraldehyde is one of the key ones that is used for disinfecting medical instruments. It tends to be somewhat noxious and the fumes are hazardous. People are looking for alternatives to that. There is hydrogen peroxide, which is an effective disinfectant, but tends to be somewhat corrosive in higher concentrations. Bleach, for example, is an extremely effective disinfectant and very cheap but also tends to be corrosive at any level. The T36® technology is very effective but very safe. It is so safe that we have a consumer version that is coming out. We have our samples available already and we are doing some test marketing on those. It is so safe that you can spray it on your hands and disinfect your hands. We are aiming at travelers and other people that are concerned about the possibility of infections from their environment, so that they can use it on their environment. You can use it in your kitchen. It has been approved by the Canadian Food Inspection Agency, so it is safe for restaurants, food processing and in your kitchen. If you are cutting up chicken on your cutting board and you want to make sure there is not chance of salmonella, then you spray the cutting board with Viralex, wait for three minutes, rinse it off and you know you are guaranteed safe from salmonella. It is so safe that people can use it in their homes and on their hands. That is a big advantage to our product. At full strength, it is safe and very effective. We are working on another version of the product that can be used for disinfecting medical instruments as well. It will not have the noxious fumes or corrosiveness of other products if we are successful in that development. It is the safety, efficacy, and speed of the product that makes this competitive in this market place.
CEOCFOinterviews: You have mentioned a number of uses for this product; how do you decide which project to pursue and how do you stay focused?
Dr. Owen: We have just gone through an extensive exercise of focusing our efforts on those markets where we are very competitive. We have found that in the hospital market for example, that they would prefer to use bleach because it is inexpensive, although it has its disadvantages. They have to dilute the product, clean the countertop before they can sterilize it and bleach is corrosive. On the other hand, the cost factor makes it very competitive. We dont compete against diluted bleach; that meant that we had to focus on the markets where we are very competitive. The first responders; the police, ambulances and firefighters love this product because they can use it in their vehicles, on their equipment and on themselves so if they are not in any danger of harming the vehicles or themselves. We have a very strong market in the beauty industry because they can spray it on the countertops and disinfect their instruments. We are also targeting certain laboratories that have a need for disinfection with a product that is very safe. We are focused on those markets right now.
CEOCFOinterviews: How do you sell the products?
Dr. Owen: We are going through distributors. We have VWR International Inc., which is here in Canada and the United States; it is also in Europe. We go through a company called Sinclair Dental Co. Ltd. here in Canada that has an exclusive with our product. I should mention that the dental industry is a good market for us and is the largest customer that we have. We choose very effective distributors and then we work with those distributors to make sure that they are aware of the benefits of the product. We are currently running specials of the product, and providing incentives to salespeople. We really need to get the product introduced outside of our home province of British Columbia. We are spreading across Canada. Our account manager is in Toronto as we speak, introducing the product to our dental distributor. I look at a very good future because we have the product, they like the product, but nobody knows about the product. The more people we introduce to the product, the larger our market will become.
CEOCFOinterviews: Are you selling this product on a one-on-one basis?
Dr. Owen: We try to get involved with buying groups as well. The provincial government here in B.C. has a purchasing center called Product Distribution Center. We sell to them and then they distribute out through ambulance facilities, as well as police and firefighters. We also sell direct to the RCMP (Royal Canadian Mounted Police) for example. The distributors are also visiting a large number of laboratories, hospitals. We try to get into group-buying situations as much as we can but I would say that right now it is predominantly one customer at a time.
CEOCFOinterviews: You have a distribution agreement with Asia, will you tell us more about that?
Dr. Owen: In Asia, the distributor, Linns Corporation, is applying for the registrations that are required in the thirteen countries, which constitute his territory. We are in the process of providing him with this first order so he can get the product registered, do his test marketing so that we can decide upon the minimums that will be required for him to maintain that exclusive distributorship. We are very early in that agreement right now.
CEOCFOinterviews: Will you tell us about the production of the product?
Dr. Owen: It is relatively straightforward. Any manufacturing facility that has a GMP (Good Manufacturing Practices) designation can manufacture the product. If they are making cosmetics or other types of products that require this designation, then they can make this product. We can go to any manufacturing facility that has those characteristics and have the product made under license to us. We are currently using a factory here in Vancouver, which has the capacity for six million bottles per year. We have also identified two other manufacturing facilities, one in Montreal and one on Toronto. We are actually looking on the eastern seaboard as well, to satisfy any orders that may come in from Europe until we have identified manufacturing facilities over there. It is a relatively portable technology and very scalable.
CEOCFOinterviews: What are you doing on the research and development side for any viruses that dont exist yet?
Dr. Owen: In the disinfections market, if you can kill tuberculosis and the poliovirus that allows you to make a claim that you can kill any other known virus or bacteria. Those are the gold standards of microorganisms that are the most difficult to kill. If a product can kill the spores of a particular bacteria then you can make the claim that you are a chemical sterilant as well. These are benchmark organisms, and if you can kill them, and we have successfully killed both the tuberculosis and polio within the times designated by the EPA and Health Canada; then you can make a general virucidal and bactericidal claim. We did do further testing on Legionella and a surrogate of the Norwalk-like virus because they are a particular concern to the cruise ship industry, so we wanted to be able to demonstrate to them directly, that we can kill those microorganisms as well. If we had to test every new microorganism, it would be a prodigious task and very expensive. Generally, certain organisms fall under classes; the SARS virus for example, is a Corona virus and it is known to be relatively weak compared to polio, so you extrapolate, if we can kill polio and we know the characteristics of a Corona virus, then we can kill that one as well. You are allowed to make those claims and you dont have to test every organism that comes out.
CEOCFOinterviews: Please tell us about your funding.
Dr. Owen: We did a 1.2 million dollar financing through CANACCORD Capital, here in Vancouver. By the time we paid off the accumulated fees for taking the company public and so on; that consumed about $350,000.00. We did a relatively large inventory run of about $200,000.00 and started bearing down on our licensing trademark issues, patenting issues, and marketing issues. Eventually we have to go back to the market and raise more money because we are now targeting on the therapeutic and other applications of the technologies. We are probably going to be doing a series of private placements and then perhaps another major financing later into early 2005. We do have six million warrants out there that are priced at thirty cents. There is the potential there for another 1.8 million dollars in funding. The markets in general seem to be lagging. We are lagging below our issue price of twenty cents. There seems to be a general malaise in the market. We havent had any particular news come out lately because there is a limit to what you can tell people about a public company. I am anticipating that we will probably do some private placements between now and when the warrants expire and target to get the stock trading above the thirty-cent level so the warrants are exercised. That is our plan but I have never been able to predict the future. Sales are starting to pick up. If we have to survive by our wits, we are intending to do so. I have been involved with public companies since 1987; I dont obsess over the stock price, I monitor it. I am very focused on the business to make sure the business side is a success and then eventually the stock will follow.
CEOCFOinterviews: Are there any other challenges for the future?
Dr. Owen: The main challenge is financing the activities we need to finance to make sure that we get the growth to which we are capable. If you are going to go for FDA (Food & Drug Administration) approval of a new topical treatment, it isnt as onerous as trying to license a new drug that combats cancer that is taken internally, but it is still a significant challenge in that it could take five years and millions of dollars to do so. I am looking forward to the future to make sure that we are able to ensure that we are able to undertake these developments. We can license out these technologies or we can joint venture with people. I am looking at all of the strategies that we can employ to make sure that we can move our technology forward as quickly as possible and get these products on to the market.
CEOCFOinterviews: Do you worry about competitive technology?
Dr. Owen: We are aware of all the technologies out there and there are many technologies that are very good. We all have advantages and disadvantages. Our job is to focus on the niche in which we are competitive. Somebody can always come along with a new technology that is going to be better than ours; we havent seen that yet but there is always a possibility. If that happens in the infection-control market, for example the markets we are in now, then we do have a lot of other products in the pipeline and a lot of applications that we can pursue as well. I am not too worried about it because the technology is broad enough that we can diversify. We may encounter new competition but I dont think it will affect us that much because we can eventually target so many markets with this technology.
CEOCFOinterviews: In closing, why should potential investors be interested and what should they know that they might not realize when they first look at the company?
Dr. Owen: In the crassest terms; the stock is very cheap right now because we have fallen off the radar screen and there hasnt been much activity in the stock and the summer has been very slow and the volume is relatively low. It is a stock that if somebody looked at it, they may want to take part of it and hold it until they see what happens with the company. I think that where our potential lies is in the vast quantity of potential applications that we have for this technology. It is important that we maintain our focus and that is one of the things that I have been good at. If we get additional products out onto the market and we start to see good revenue growth, and if we start to establish licensing arrangements that we are looking for, for some of the more expensive and extensive applications such as the anti-fungal treatment, then I think there is a lot of room for the stock to appreciate. We are down close to the bottom of our trading level right now. The whole market seems to be down so I am not taking it too personally, but on the other hand, I am aware of the fact that our warrants are going to expire in 2005, so I certainly want to see trading at some appreciable level above thirty cents so we can access that financing.
What was attractive to me about ALDA Pharmaceuticals was the fact that it had platform technology called T36®. We have a patent pending on that technology and it is a superior infection control technology. The first product from that technology is called Viralex. It is a surface disinfectant, which has been on the market for a couple of years now. We are finding the product has an enthusiastic response from the customers, but the company was virtually unknown outside our home province of British Columbia and Canada. Our task there is very straightforward; we have to engage in a very effective sales and marketing effort so that we increase our sales of that product. We are seeking expansion into the United States; we have our EPA registration as pending any day now and that will probably take 120 days to review and if all goes well, we could be fully registered in the United States within the year, in all states. That will bring a very large market potential to us as well. What attracted me to it was the fact that there is a product on the market and we have developed spin-offs from that product. - Terrance G. Owen
To view Releases highlight & left click on the company name!
ceocfointerviews.com does not purchase or
recommendation on stocks based on the interviews published.