Vision Bio takes aim at US market

Melbourne-based research instrument developer Vision BioSystems is gearing up to launch its Bond-X immunohistochemistry system in the US before the end of the year.

The cancer detection system, which can handle multiple staining protocols and continuous batch processing, is the first instrument developed by the company to be marketed under its own brand name. It has already been launched in Australia and Europe, with about 10 instruments placed so far.

The company, a subsidiary of the Vision Systems group (ASX:VSL), also plans to launch its second instrument, the Peloris dual retort tissue processor, early in 2004. An enhanced version of the Bond instrument capable of doing in situ hybridisations is also expected to launch next year.

Managing director Michael Ohanessian said that while it had taken longer than expected to get the Bond system on the market, primarily due to the complexity of the software required to control the instrument, he believed the instrument filled a unique need in the immunohistochemistry instrumentation market. Early feedback from customers had been "tremendous" he said.

"We've leapfrogged companies that have been doing this for 10 years," he said. "We essentially started with a blank sheet of paper. The downside is that it costs more [to develop] but we end up with what the market wants."

Major competitor Ventana Medical Systems claimed earlier this year that Vision's instruments were infringing two of its patents, but Ohanessian said that one of Ventana's patents involved in the dispute had been thrown out by the US patent office after re-examination. Vision is also vigorously pursuing the other claim in the dispute, he said, and was confident of a favourable resolution.

It also appears that the strategy taken by Vision last year in purchasing reagent company Novocastra has already paid off, with the UK-based company exceeding pre-acquisition targets to file earnings before tax of AUD$9.7 million.

Ohanessian said that the acquisition had turned out to be a good move by the company, allowing it to combine an instrument business with a reagent business, allowing it to capture ongoing revenues after the sale of instrument systems.

"When you come up with what you think will be a really great synergistic acquisition, and try to think what value it will add to the company -- it's been beyond our wildest dreams," he said. "There is no duplication between the companies at all, it's all been about upside revenue growth, not cost reduction -- the potential value is sustainable in terms of revenue growth and market share growth. There's a tremendous opportunity to create value that otherwise wouldn't be there."

Coming up for the group are more product releases, said Ohanessian. Vision BioSystems has two or three OEM products manufactured for sale under other brands that will be launched next year. Novocastra will also be expanding its product line, moving into secondary detection systems to complement its range of primary antibodies.

According to predictions made by Vision Systems CEO Jim Fox at the company's recent AGM, Vision BioSystems is expected to break even during the second half of financial year 2004.