Sydney, Australia based healthcare group, Stirling Products Limited (ASX:STI) has advised that following the recent TeleMedCare e-health acquisition and the conditional addition of the recently announced pathology business (subject to due diligence completion and shareholder approval), the Company is now in process of its strategised business integration.
The Company has a clear focus on the progression and realisation of its major opportunities, especially its HDA pulmonary drug delivery platform and concurrently, the build up of group revenues.
HDA Drug Delivery Platform - The technology is touted as being highly efficient and effective in delivering drugs via inhalation. This drug inhalation delivery platform, that nebulises drugs in liquid form, has the potential for far more versatility and capability than the current dry powder competing devices.
The HDA technology uses focused ultrasonic energy to form a fountain of liquid to be nebulised that produces an aerosol from the walls of the jet that self-propels at several meters per second up a chimney-like intake tube. Atomisation of the liquid occurs at the base of the jet inside the intake tube. The micro-particle aerosol is then transported to the user by positive dynamic pressure derived intrinsically from the kinetic energy of the jet. The HDA technology therefore does not require any compressed gas or fan driven airflow to transport aerosol to the user. This significantly increases the aerosol concentration by both eliminating the gas/fan dilution effect and reducing the drug loss associated with aerosol condensation inside the nebulisation chamber.
Following approaches by three of the world's largest industry companies early last month, Stirling says it is now well ahead of its original schedule for the HDA platform commercial development with ongoing discussion in place with all three parties. The company says this product will help them tap into a multi-billion revenue market putting them in the unique position of potentially offering an exclusive patent extension to the major ‘pharma’ companies that are in process of having their top line revenue receipts decimated through the mass patent expirations currently in process.
Examples include Pfizer, which just on its three lead products, will see approximately US$20 billion a year deteriorate rapidly in the next three to four years time, Eli Lily will see around 45% of its total drug sale revenue collapse within the same time frame whereas AstraZeneca can lose up to 60% of its total gross sales revenue that is generated through eight products that are all coming off patent.
Stirling's unique opportunity offers delivery through a fully patented delivery device, thereby delivering the equivalent of a renewed patent for the blockbuster products. Stirling is exclusively offering a partnership in the platform for a negotiable up front payment and a one third share of gross sales revenue.
Key features of the HDA technology as per the company
- Drug transportation velocity is matched to the patient's natural inhalation
- Aerosol losses due to deposition on drug delivery pathways are reduced
- Delivers at least three times the aerosol concentration of conventional ultrasonic devices
- Provides a concentration level between that currently achieved with dry powder inhalers and conventional fan driven nebulisers.
- Delivers the drugs with much faster absorption and much lower transportation losses.
- Constant aerosol concentration during inhalation is adapted to natural patient breathing
- The active drug particle size is substantially sub-5 micron, providing for better and more rapid absorption
- Active drug is in unique disposable capsules further protecting against competition
- Compared to oral administration, testing has shown substantively LESS active drug could be required to provide the same benefit therefore also potentially increasing safety and lessening side effects
- Can potentially be used for administration of most drugs
Additionally, the new devices will include and incorporate a new revolutionary and seperately patented Dynamic Mesh technology. This Dynamic Mesh technology offers the specific benefit of delivering a tightly controlled micro particle size e.g. < 5 microns which is achieved by restricting the larger particles as they attempt to pass through the mesh. A critical limitation of existing devices is a significant problem with clogging which can prevent accurate dosing and use generally.
The combination of electronic particle size control with the self cleaning Dynamic Mesh technology further enhances the benefits of the HDA drug delivery platform and its capabilities.
Pharma Sales - Following the compliance issues and manufacturing and importation lag times encountered, the Company is now pleased to advise that its own 'Stirling Health' branded products will start to arrive as of this week. The Company branded products will then be steadily added to as its pipeline products continue to be produced. As of October, from a conservative commencement, there will be a steady and increasing product presence of the 'Stirling Health' brand in leading pharmacies throughout Australia.
Pathology Business - A significant factor in the acquisition of this business (which is currently still conditional upon due diligence and Shareholder approval), is that this business has been established without the major legacy issues affecting most of the current market. This situation has arisen following the recent significant changes introduced by Government that has removed the protectionist environment through which pathology has historically been conducted.
Subject to this acquisition proceeding, Stirling plans to introduce pathology services to select pharmacies throughout Australia and thereby establishing a national network that will provide for a far improved access and service level to the public.
This initiative through Stirling's pharmacy marketing is forecast to at least double the business's current $7.5 million pathology revenue and deliver a gross margin of approximately 25%.
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