TBG Diagnostics Limited (ASX:TDL) Non-Executive Director and Medigen Biomedical Group, Chairman, Dr Stanley Chang Discusses the Company’s Technology Pipeline
TBG Diagnostics Limited (ASX:TDL) was established in 1999 and it is a molecular diagnostic company. And it covers the full range of molecular diagnostic products that is able to detect diseases earlier than traditional methods. And this company was listed on the ASX earlier this year.
TBG was acquired by Progen Pharmaceuticals Limited (ASX:PGL) earlier this year. And it was because earlier in 2015, the Board of Progen decided to have a strategic review and they found that drug development probably does not make sense to them. So they decided to restructure and then to refocus the business. And they found that molecular diagnostics actually works for the market. So I think that’s the reason why at the end, it triggered the acquisition of the business.
This is simple because the market is huge. If you look at the global market of molecular diagnostics, the compound annual growth rate is up to 15 per cent annually. And it would be reaching something like US$25 billion in the year of 2024. And in the China market, our focus market, it is even faster in the annual growth. The compound growth rate is up to 28 per cent per annum, and the market could reach up to $3.5 billion in China alone. And there are not too many players in there, so we stand a good chance to become a keen competitor to the market in China.
TBG was estimated at something like AUD$21 million at that time and it was by scrip. And then at around acquisition, we also raised AUD$12.6 million.
For the strategy of TBG, what we want to do is to have very healthy revenue growth, organically and inorganically. And when I say organically, it means that for the in-house products, we are going to expand the product portfolio and then to increase the market share in China. And at the same time for inorganic growth, we’re targeting M&A, because there are several companies that are a good fit to the company, so we’re in discussion with them for proposed acquisitions in the future. If we need some additional funding, we’ll do that only when we want to cover the whole range of businesses in China; to have a larger share of the market in there.
Following the acquisition, we have AUD$16 million in hand, and that with any other revenue; it’s something like AUD$2.5 million. We hope that the revenue of the company could grow healthily and there’ll be a big bunch of products to be brought to the market. So by the time when these products are on the market, we will have breakeven time and it is likely to happen next year.