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INVESTOR PRESENTATION AUGUST 2006. Forward Looking Statements. - PowerPoint PPT Presentation
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CEMI:OTCBB ● WWW.CHEMBIO. COM
INVESTOR PRESENTATION
AUGUST 2006
CEMI:OTCBB ● WWW.CHEMBIO. COM
Forward Looking Statements
Statements contained herein that are not historical facts are forward-looking statements within the meaning of the Securities Act of 1933, as amended. Those statements include statements regarding the intent, belief or current expectations of Chembio and its management. Such statements reflect management's current views, are based on certain assumptions and involve risks and uncertainties. Actual results, events, or performance may differ materially from the above forward-looking statements due to a number of important factors, and will be dependent upon a variety of factors, including, but not limited to, Chembio’s ability to obtain additional financing and the demand for Chembio's products. Chembio undertakes no obligation to publicly update these forward-looking statements to reflect events or circumstances that occur after the date hereof or to reflect any change in Chembio's expectations with regard to these forward-looking statements or the occurrence of unanticipated events. Factors that may impact Chembio's success are more fully disclosed in Chembio's most recent public filings with the U.S. Securities and Exchange Commission.
CEMI:OTCBB ● WWW.CHEMBIO. COM
Investment Highlights
Growing Global Health Market For Rapid Tests
FDA Approval of Two HIV Tests Negotiating with US Marketing Partner
Successful Execution in International Markets
Pipeline of Complementary Products and Technologies
Experienced Management Team
CEMI:OTCBB ● WWW.CHEMBIO. COM
The US HIV Rapid Test Market is Growing
Estimated 30% of 1MM HIV+ in U.S. are not aware of their status Rapid tests provide the best chance to test and counsel at the point
of care and thereby reduce further transmission
Current market ~4MM ($50MM) tests could grow 4X New CDC recommendations for routine HIV testing for all
Americans age13- 64
$90MM additional funding requested by the President for 2006-2007 HHS Budget
Significant growth in hospital market
Additional future opportunity in the OTC market Guidelines for approval adopted by FDA, March 2006
CEMI:OTCBB ● WWW.CHEMBIO. COM
International Need for Several Hundred Million Tests 2007-2010
Estimated 40 million infected with HIV/AIDS worldwide, but only 10% aware of their status
Estimated 200MM tests needed for PEPFAR 2MM treatment goal
$8.3 billion spent on AIDS last year (half from US); UNAIDS estimates $22B / year needed by 2008
Annual therapy cost in 2001 - $10,000; ~$200 today More people will be tested with knowledge that treatment is available
CEMI:OTCBB ● WWW.CHEMBIO. COM
Government Programs to Facilitate Awareness and Testing Initiatives
Clinton Foundation HIV/AIDS Initiative The initiative is focused on accelerating high quality treatment and partnering with industry to cost
effectively bring treatment to the people in need Chembio was one of four selected by the Clinton Foundation HIV/AIDS Initiative to make available
rapid HIV tests that will be used to detect HIV easily and cost effectively
The President's Emergency Plan for AIDS Relief (PEPFAR) Commitment to provide $15 billion over five years to fund the Emergency Plan for AIDS Relief The Plan will increase the availability of HIV testing services through a number of key innovative
strategies including ensuring adequate supplies of HIV test kits and other essential products
The Global Fund Created to finance a dramatic turn-around in the fight against AIDS, tuberculosis and malaria To date, the Global Fund has committed US$ 4.9 billion in 131 countries to support aggressive
interventions against AIDS, tuberculosis and malaria
CEMI:OTCBB ● WWW.CHEMBIO. COM
Chembio’s Rapid HIV Tests
Rapid – 15 minutes
Safe, easy application
Operator friendly
Non–invasive whole blood sample – the standard
True IgG Control- Limits False Negatives
24 month shelf life
Highly sensitive (99.7%) and specific (99.9%)
Only closed rapid HIV system
FDA Approved 5/29/06
CEMI:OTCBB ● WWW.CHEMBIO. COM
Chembio’s Rapid HIV Tests
FDA Approved 5/29/06WHO “Approved” 2005
CEMI:OTCBB ● WWW.CHEMBIO. COM
CEMI* OSUR** TRIB
FDA Approval Yes Yes Yes
No. of Rapid Test Formats 3 1 1Sensitivity 99.7% 99.6% 100.0%Specificity 99.9% 99.9% 99.7%Analyte(s) HIV 1&2 HIV 1&2 HIV 1Developing World Price $0.65 - $2.00 $3.50 $2.00
Successful International Collaborations
Brazil, Clinton, E. & W. Africa
OfficesNo No
US Price TBD $17.50 $15.75Strong US Marketing In Yes -Partner Negotiation AbbottTrue IgG Control Yes Yes NoShelf Life 24 mos. 6 mos. 12 mos.
* CLIA Waiver Application Not Submitted
HIV STAT-PAK Dipstick Product Not Submitted to FDA
** Orasure data are for whole blood; oral fluid sensitivity and specificity are lower
None
CEMI:OTCBB ● WWW.CHEMBIO. COM
HIV Tests Marketing Timeline
Q2 Q3 Q4 2007-2008
April 18, 2006: Chembio receives FDA approvable letter for its rapid HIV tests
May 29, 2006: Chembio receives FDA Approval for its rapid HIV tests
Q2: Expect CLAI Waiver submission
Early 2008: Commence Sales in Europe/OTC
Q4: Begin working on CE Marking
Q4: Commence Plan/Studies for OTC market
Q3: Expect to be granted CLIA Waiver
Q3/Q4: Anticipated Definitive Agreement with Marketing Partner for US and Other Markets (Professional & OTC)
Q3/Q4: Initial Sales US Market
2007-2008: Continue increases in US and international sales
CEMI:OTCBB ● WWW.CHEMBIO. COM
U.S. Marketing Plan
Currently in discussion with a partner to market HIV products in the U.S.
Will retain the right to market non-HIV products in the U.S.
Chembio will retain the marketing rights to all products outside the U.S.
Established Business Development Offices in Tanzania and Nigeria
Chembio’s test designated in Ugandan and Nigerian national protocols; several others pending; distributors established
13 Year technology transfer and supply contract with Brazilian government
Public-Private partnership
Marketing Strategy
CEMI:OTCBB ● WWW.CHEMBIO. COM
15,000 SF FDA approved leased facility in Medford, NY
Total of 70 Employees
Includes all R&D, QA/QC and Technical Support Functions as well as Sales, Administrative and Production and Assembly Functions
Will Also Be USDA licensed
Capacity to produce 10MM units based upon one operating shift
Facility automated for strip production and lamination
Plan to Invest in Assembly Automation
Will accommodate current and future products
Facilities & Manufacturing Overview
CEMI:OTCBB ● WWW.CHEMBIO. COM
Tuberculosis Rapid Tests Human TB Under Development with DPP™
World’s Most Deadly Infectious Disease NIH, WHO Grants and Collaborations
Veterinary TB Leverages Our Expertise In TB Serology $50MM Market for Cattle and Other Species - First Product
Currently Under USDA Review for Approval
“Neglected” Diseases Chagas Disease Leading Rapid Test
$1.2 MM Order from PAHO New Product Collaborations in Discussion with Partners
Other Product Opportunities
CEMI:OTCBB ● WWW.CHEMBIO. COM
“Dual Path Platform” (DPP™) For Next Generation Tests
Increase of 10-50X in analytical sensitivity vs. conventional lateral flow
Oral fluid tests more feasible due to sample delivery
Patent pending Outside current lateral flow IP, reduces IP costs Licensing strategy for non-core applications
Technology in Development
12345678
Dual Path Rapid Test Platform
CEMI:OTCBB ● WWW.CHEMBIO. COM
1. Add 5 l of serum/blood to the sample+buffer well (1).
2. Add 1 drop of buffer to the sample+buffer well (1).
3. Add four drops of the same buffer to the buffer well (2) when the colored lines disappear.
4. Read the results at 15 minutes
Negative result: one line Positive result: two linesor
12345678 12345678 12345678
12345678 12345678
DPP Single Parameter Test Procedure
CEMI:OTCBB ● WWW.CHEMBIO. COM
Growing HIV & Chagas Revenues
Chembio Diagnostics, Inc. 2004 2005 6 mos. 2005 6 mos. 2006$(000s)
Net Sales 2,749 3,360 1,160 2,742 Total Revenues 3,306 3,941 1,638 2,875 Gross Profit 704 1,332 537 1,000
21% 34% 33% 35%
SG&A 2,299 3,265 1,285 2,631 R & D Expenses 1,509 1,365 762 744 Net Loss (3,099) (3,252) (1,495) (2,391) Net Loss Attributable to
StockholdersHIV Test Revenues 1,242 2,400 584 1,423 Chagas Test Revenues 71 69 36 942
Unaudited
(5,042) (6,769) (4,588) (3,275)
CEMI:OTCBB ● WWW.CHEMBIO. COM
Capital Structure as of 6/30/06
AS OF 6/30/2006 TOTAL
COMMONHELD BY
MANAGEMENT
Common Shares 10,669,185 1,952,828
Convertible Preferred SharesSeries A 149.9 CONVERTIBLE INTO 7,496,052 1,972,494 Series B 113.9 CONVERTIBLE INTO 9,338,983 88,971
27,504,220 3,912,310 Avg Price
Options: 0.69$ 1,781,875 757,500 Warrants: 0.77$ 23,578,994 2,675,236
52,865,089 7,345,046
CEMI:OTCBB ● WWW.CHEMBIO. COM
Experienced Senior Management Team
Name Position Years Experience
Lawrence Siebert Chairman, President 24
Richard Larkin CFO 25
Avi Pelossof Sales, Marketing & Bus. Dev. 19
Les Stutzman Marketing 25
Javan Esfandiari R&D 18
Rick Bruce Operations 28
Tom Ippolito Regulatory 20
CEMI:OTCBB ● WWW.CHEMBIO. COM
Independent Directors / Advisory Board
Independent Board Members Expertise; Experience
Alan Carus, CPA Audit Chair; Former Senior Executive, NYSE Company, Former Partner, E&Y
Gary Meller MD, MBA Health Care Technology; Former CEO, Health Services Division, Humana Inc.
Gerald Eppner Esq. Securities Lawyer; Kaye Scholer
Advisory Board Members Expertise; Experience
Dr. James Koziarz HIV Diagnostics; Abbott Laboratories
Dr. Peter Andersen TB Diagnostics; Staten Serum Institut
Dr. Mariano Levin Chagas & Other Neglected Diseases
Allen Moore Public Policy, Global Health; Senate & Exec. Branch
CEMI:OTCBB ● WWW.CHEMBIO. COM
Summary of Chembio
Growing Global Health Market For Rapid Tests
Successful Execution in International Markets
FDA Approval of Two HIV Tests Negotiating with US Marketing Partner
Pipeline of Complementary Products and Technologies
Experienced Management Team