PanBio losses cut, but riding flat sales

Medical diagnostics company PanBio has capped a period of management and structural reorganisation by announcing sharply curtailed first-half losses but flat revenues.

Based in Australia and the US, PanBio trimmed its net after-tax loss to $AUD577,000 for the first half of 2003 compared with a $AUD1.27 million loss in the same period last year.

However first half sales dipped to $AUD7.9 million from $AUD8 million in the previous corresponding period and newly-appointed CEO Jim Porter indicated full year results would register little improvement on the $17.2 million recorded last year.

That is a pointed departure from the average annual revenue gains of about 40 percent that PanBio has posted in recent years. The listed biotech's disappointing revenues were blamed on weaker sales of its leading product, a test kit for dengue fever, after the ending of an outbreak of the disease in Brazil and Venezuela and the falling US dollar.

PanBio executives have taken to the road to explain results to investors to promise improved profits and revenue growth from recent streamlining of its product development, sales and marketing efforts.

The company hopes its introduction of a new diagnostic test in the US for mosquito-transmitted West Nile virus as the first in a series of new products planned over the next 12 to 24 months will help return the biotech to profitability.

The company last turned in a net after tax profit in 2000, the year before its $AUD17 million IPO in April 2001. Its reserves stand at $AUD10.1 million in cash and near-cash instruments while borrowing costs jumped in the period to $AUD172 million from $AUD127 million.