Polartechnics quadruples sales, but J&J drops TruScreen

Sydney-based devices company Polartechnics (ASX:PLT) today announced its product-sales revenue had increased four-fold to AUD$2.14 million for the financial year ended June 30 2004.

The results came on the heels of news earlier this week that Johnson & Johnson division Gynecare/Ethicon had terminated an agreement to market Polartechnics’ TruScreen cervical cancer screening device in the US and South-East Asia. TruScreen had not yet undergone FDA studies or been approved for marketing in the US.

Polartechnics CEO Victor Skladnev said the agreement with Gynecare/Ethicon, which was signed in 1997, had been on hold pending the completion of FDA studies, which would take at least 3 years.

"Unfortunately, the contract didn’t allow Gynecare/Ethicon to fund the studies and we estimated it would cost US$3 million to [get FDA approval]," said Skladnev. "We didn’t have the funds to do that for a marketing opportunity that was three years away.

"In that context we had EU approval and were already starting to address the US market. We see [the cessation of the Gynecare/Ethicon agreement] as opening up the Asian market opportunities which we’ve had on the backburner. We can now talk to other potential partners in those environments."

Skladnev said Polartechnics was not abandoning the US market, but would consider launching a new US salvo when the company had appropriate resources. "We may, at some time in the future, talk to other potential partners," he said. "We still have American patents that have much more than 10 years to run."

To date, Polartechics has concentrated on marketing TruScreen to Italy’s 14,000 gynecologists, and has recently started to promote it as an adjunct to Pap smear tests to women in Sydney and Wollongong family planning clinics. Skladnev said TruScreen sales had been "a bit disappointing", but noted that recently there had been "some positive progress".

"We do see TruScreen as the longer-term product. It is essentially an annuity product and we will make our money out of sheath sales," he said.

Skladnev said the company’s other products, the SolarScan skin microscopy system and the MediScan video imaging and patient data management system, both met their sales budgets and the permanent hair removal Intense Pulse Light (IPL) device exceeded budget expectations.

Although Polartechnics last year signed a heads of agreement with US marketing company Open Systems Imaging to sell SolarScan in the US, Skladnev said the company had achieved better results by appointing marketing representatives directly.

At time of writing Polartechnics shares were up 10 per cent to AUD$0.47.