TRANSCRIPTION OF FINANCE NEWS NETWORK INTERVIEW WITH STIRLING PRODUCTS LIMITED
(ASX:STI) MANAGING DIRECTOR, PETER BOONEN
Emma Pearson: Hello Emma Pearson reporting for the Finance News Network. Joining me for an update from pharmaceuticals company Stirling Products is Managing Director, Peter Boonen. Peter welcome back. Now let’s start with your recent announcement, the patent for R-Salbutmol as a potential obesity drug, who issued the patent and for how long?
Peter Boonen: The announcement we made was when the Australian Patent Office issued the patent. We’ve already got one in New Zealand and a couple of other places but the R-Salbutmol for obesity application is patent pending globally, including all the main geographical areas.
Emma Pearson: And what’s the next step?
Peter Boonen: Right now the R-Salbutmol is a big company drug; it’s a major opportunity for us. We’re looking to ultimately joint venture that with a major. Right at the moment we’re investigating starting a small human trial because it’s been very successful in the lab and in Beagle dogs, where we achieved 2% weight loss per week. Now in humans we will get similar type of results, we expect, so we’re looking for a human proof of concept, a confirmation of concept and then actively looking for a major pharma partner.
Emma Pearson: Now to your pharmaceutical plant in Canada, what’s occurred since the property settled?
Peter Boonen: The property settled earlier this year but we actually took possession only in May, which is only a few months ago. Since May we’ve been validating every single piece of plant, equipment and process – very complex process we’ve got to go through to get relicensing so that the plant can operate as a pharmaceutical plant under the provisions of Health Canada. We’ve now completed that well ahead of schedule. We’ve put in an application for relicensing. Health Canada has three months in which to inspect us, we’re hoping to have an early inspection because we are ready to go. But for a very complex exercise to having achieved the completion of that during the course of this month, has been fantastic for us.
Emma Pearson: And Peter when will you be in a position to win work for the plant?
Peter Boonen: We’ve got work available now which we can’t commit to obviously because we don’t have a relicense issued. As soon as Health Canada has issued us our final license, which we expect sometime within the next ninety days as I referred to. We’re ready to go, there’s a lot of work available. We can’t commit to any of that work until we’ve got a start date because obviously everyone that’s wanting to give us work wants a start and completion date - they want a delivery date. They don’t want to say, well you know, maybe we can start next month or the month after. So it’s unfortunate but we’ve got to tread water whilst we’re waiting for that.
Emma Pearson: And how much will it cost to bring the plant back into production?
Peter Boonen: Well we’ve already done that so everything’s ready to go. We’ve spent in the order of $600,000 in getting it back up to scratch. We will be hiring more people so from that aspect, we’ll probably have round about a 250,000 start up cost, but that will be with contracts in hand.
Emma Pearson: And now to your portfolio of products, how’s progress?
Peter Boonen: Absolutely fantastic. The sale of products right across the board – oh we’ve got a great team in place. When I say absolutely fantastic, we’ve got a lot of goods in production, a lot of goods in transit, a lot of goods going through various agreement and various approval stages, but we are well ahead of schedule in sort of where we are heading. We’re still skinny on products out in the field today as we sit, but we’re very aggressively tackling that and we are ahead of schedule of our programme.It takes a little bit of understanding, it’ll take us, you know a good year or two to be in full force on that marketing side but we are very comfortable at this very early stage.
Emma Pearson: Now Peter in your Year-end review you announced a number of key hires in sales and marketing, who have you hired?
Peter Boonen: Well our key hire as a consultant is Ross Harricks who was very involved with Cochlear and ResiMed. He’s got a hell of a lot of experience globally in devices and Ross is essentially our key man now looking after, or the oversight of the development of the pre-production models, which are very much on schedule. So by Christmas we’re looking at having a few of those, Ross is proving invaluable with regard to our strategic positioning. We’re looking once again for a major alliance globally so you know, we keep adding to our team and with Ross well we’re thrilled to have him.
Emma Pearson: And what is the company’s forecast for fiscal 2010/2011 sales?
Peter Boonen: Well we are given some guidance by Christmas this year we should be doing a million dollars gross sales running at roughly an average of 40% gross(margin), that will increase monthly. At the moment we’re on schedule for that, but depending on what we reach in road bumps or in going forward for situations that work to our benefit, at the moment that’s all we can say. We’re on schedule for that million a month by the end of this year and you know, we look forward to sort of kicking up from that fairly solidly coming into the New Year.
Emma Pearson: Now Peter you’ve just announced a proposed acquisition of a controlling stake in Telemed Holdings, tell us about this.
Peter Boonen: I can’t say too much about that Emma. It’s not a stake that we’ve taken yet, it’s all subject to ..as the company’s under administration and we are in the process of – well we’ve underwritten the administration, we’re paying the wages there and everything at the moment with the intent going forward that we will have a controlling interest. But essentially all the western health systems are under pressure, the costs of health provision to populations is just increasing. We’ve got our own problems in Australia as everybody is well aware with the deficiencies in the hospitals and all the attention that’s been brought to that. E-Health, Telehealth globally is a major, major focus to be far more efficient to provide efficiencies to Government, to provide efficiencies to the medical profession and for the patients and the chronically ill, to provide a better level of service and more comfort in their situation as well as something that is affordable. For remote areas there’s nothing that matches it of course.
Emma Pearson: Now you’re also in discussions with US and UK funds who were seeking convertible investment positions, can you elaborate further on these discussions?
Peter Boonen: Not really until they’re material, we’ve telegraphed that these discussions are in place because they’re confidential. But by the same token there’s a number of parties involved and we’re not going to be dealing with all the enquiry that we have. We’ve got a hell of a lot of interest in our company, which is more reflected at the institutional enquiry end than the shareholder end strangely enough, but that will all pan out in the future also.
Emma Pearson: Peter Boonen thanks for your time today.
Peter Boonen: Thank you Emma.
