GE sale offers new hope to Iatia

Phase imaging enhancement specialist Iatia (ASX:IAT) is showing the early stages of a turnaround following the signing of two deals within the last month.

GE Healthcare has placed its largest order to date for Iatia's automated cell analyser In Cell 1000. The deal, worth AUD$140,000 to Melbourne-based Iatia, is the first batch for the 2005/06 financial year and more orders are likely to follow, according to CEO Charles Laycock.

"GE is leading us to believe that we will generate up to $500,000 in sales in the 2005/06 financial year," he said. "This is our first big commercial breakthrough and it is with such an important company. It validates our technology. It has triggered other organisations to consider Iatia for their biotechnological needs.

"The advantage of the In Cell 1000 is that you can look at cells without staining them. As a result they are still alive and you can watch the effect a drug has on a cell. This benefits in the development of drugs".

In mid-June Iatia also signed a $2.97 million contract with the Defence Science and Technology Organisation (DSTO) and received an upfront fee of $541,200 to commence the project. The DSTO funding will be applied to Iatia's pioneering technology, Quantitative Phase Imaging (QPI) in passive (undetectable) surveillance and target ranging and allow observers to penetrate obscurants such as fog, cloud and foliage and obviate camouflage.

Iatia has seen a steady improvement from fiscal 2002/03, when it made a loss of $3.5 million. In 2003/04 the company's loss was $1 million, and its loss for 2004/05 is expected to be $850,000 to $650,000. Laycock said he believed Iatia may be out of the red in 2005/06, following the company's recent success.

"This new financial year we plan to break even or generate a small profit," he said. "It is quite a turn-around for a new biotechnology company, but this was always our timeframe for achievement. We believe in 2006/07 the company will take off and then snowball.

"We plan to penetrate a number of key markets in the medical areas of pathology, ophthalmology, optometry and nanotechnology, and we are currently in negotiations to enter new collaborations and licensing agreements."

Iatia's QPI technology will also be used for ongoing research and development at the Centre of Excellence for Coherent X-Ray Science, which will be formally launched at the University of Melbourne in late 2005. Iatia scientific director and board member, Prof Keith Nugent, will lead the team which includes La Trobe, Monash and Swinburne universities, CSIRO, the Australian Synchrotron Research Program and a number of major international laboratories.