Pressure BioSciences, Inc. (OTCQB: PBIO) is a publicly-traded company located approximately 30 miles south of Boston, with nine fulltime employees. The Company’s founder and CEO, Mr. Richard T. Schumacher, is a seasoned entrepreneur, having founded or co-founded three previous publicly-traded companies with a combined market capitalization of over $1 Billion. The remaining officers of PBI all have advanced degrees in their areas of expertise, which they combine with many years of hands-on, highly successful experience in the life sciences marketplace. In addition to Mr. Schumacher, the rest of the Company’s Board of Directors is comprised of four outside directors, each of whom is a successful entrepreneur who has also had great success as a life sciences business leader.
The Company is focused on solving the challenging problems inherent in biological sample preparation, a crucial laboratory step performed by an estimated 500,000 scientific researchers worldwide working in the biological life sciences. Sample preparation is a term that refers to a wide range of activities that precede virtually all forms of scientific analysis. Sample preparation is often complex, time-consuming, and one of the most error-prone steps of scientific research. It is nonetheless a ubiquitous laboratory undertaking whose requirements drive a large and growing market, worldwide.
What is Pressure Cycling Technology - PCT
PBI has developed and patented a novel, enabling technology platform that can exquisitely control the sample preparation process. It is based on harnessing the unique properties of an entirely new dimension in thermodynamics for life sciences laboratories – cycled hydrostatic pressure. This cutting-edge process, called pressure cycling technology (“PCT”), uses alternating cycles of hydrostatic pressure between ambient and ultra-high levels (up to 100,000 psi) to safely, conveniently, and reproducibly break cells and release important biomolecules (e.g., DNA, RNA, proteins, and lipids) from the samples to be studied(e.g., cells and tissues from human, animal, plant, and microbial sources). Figure C shows a cell being broken and the biomolecules being released for study. For the purpose of reference, the pressure at the bottom of the Marianas Trench, at six miles down the deepest part of any ocean on earth, is approximately 16,000 pounds per square inch (“PSI”). See Figure 1.
PBI believes the overall market for biological sample preparation products is very large. Virtually every laboratory engaged in any form of biological research is faced with the necessity of routinely preparing samples prior to testing and analysis. The Emmes Group (2008) estimated that this market is comprised of up to 80,000 laboratories and 500,000 researchers worldwide. A report produced by BCC Research LLC, a well regarded provider of market intelligence, estimated that the global market for sample preparation reagents and products used in life science research was $4.6 billion in 2012, will grow to $11.5 billion by 2018, and register a five-year compound annual growth rate (CAGR) of 16.3% from 2013 to 2018.
Recently, important data have been presented by independent scientists from the US and international research communities on the advantages of PCT compared to existing, competing methods for biological sample preparation. These presentations have been in the areas of biomarker discovery for cancer, stroke, heart disease, diabetes, Alzheimer’s, and a number of infectious diseases; drug development; forensic sciences; counter-bioterror; soil and plant biology; extraction of biomolecules from microorganisms (i.e., oil-eating bacteria); and PCT-enhanced protein digestion. Data from these various applications have been presented at meetings by scientists from a number of leading research groups, including ThermoFisher, Pacific Northwest National Laboratory (“PNNL”), Amgen, the United States Army Medical Research Institute for Infectious Diseases (“USAMRIID”), the U.S. Department of Agriculture (“USDA”), Harvard School of Public Health, Lawrence Berkeley National Lab, the University of North Texas, Merck, and Target Discovery. These presentations are part of over 100 scientific publications and testimonials that can be found on the PBI website. (See Figures D and E)
PCT Used In The Discovery of Biomarkers In Sample Preparation
The Company’s primary efforts are focused on the development and sale of PCT-based products and applications for the preparation of samples used in the discovery of biomarkers. The discovery of biomarkers is a primary focus of thousands of scientific researchers worldwide. These researchers work in academic, government, biotechnology, and pharmaceutical laboratories. A 2012 market research report by ASD Reports has estimated the worldwide market for biomarkers to be approximately $26 billion. Biomarkers are molecules (e.g., genes, proteins, lipids) found in tissue (e.g., cells) or body fluids (e.g., blood) that correlate – directly or indirectly – with the presence or absence, the progression or recurrence, and/or the effects of treatment on a disease or a disorder. Examples of biomarkers are PSA (prostate cancer), LDL Cholesterol (coronary heart disease), Her-2/neu (breast cancer), and anti-HIV (AIDS infection).
The primary instrument used in the discovery of protein biomarkers is the mass spectrometer, a powerful laboratory instrument that is playing an increasingly important role in the analysis of biological samples in life sciences research. Mass spectrometry is estimated to be a multi-billion dollar market. PCT has been shown to offer significant advantages in speed, quality, and overall performance compared to other techniques used in the preparation of samples for mass spectrometry.
Recent Noteworthy Events
Over the past year, the Company reported a number of noteworthy achievements, including:
(i) Five consecutive quarters with revenue exceeding same quarter previous year;
(ii) The release of the long-awaited high throughput Barozyme instrument, a game-changer for PBI;
(iii) The development with a Harvard-led research team of a novel, non-invasive, PCT-enhanced method for lipid analysis using fecal material;
(iv) The presentation by UCLA scientists of an advanced, pressure-based method offering new insights into protein structure and function for use in biomarker discovery and rational drug design;
(v) The closing of two Private Placements, each for a total exceeding the goal of the financing;
(vi) Initiation of equity research coverage on PBI by Merriman Capital and See-Thru-Equity; and
(vii) The publication of an Executive Informational Overview on PBI by Crystal Research Associates, led by top-ranked Wall Street veterans Jeffrey Kraws and Karen Goldfarb.
PCT Based Products and Intellectual Property
PBI has developed a number of PCT-based products for use by the life sciences’ market, including five pressure generating instruments, or “Barocyclers” (e.g., Figure 2 is the Barocycler NEP2320 and Figure 3 is the Barocycler HUB440), a unique patent-pending, mechanical sample homogenization device, the “PCT Shredder” (Figure 4), six different unique, single-use processing containers, PULSE Tubes (Figure 4.1), MicroTubes, BaroFlex 8-well processing strips, Shredder Tubes, and the novel micro-pestle: a patent-pending, single-use device for the rapid and reproducible extraction of biomolecules from small, biopsy tissues (Figures X and Y), a number of different reagent kits (Figure A), and several dozen ready-to-use, application-specific protocols. Many of these products are covered by claims in our 24 issued US and foreign patents.
On June 15, 2014 PBI launched the newest Barocycler instrument, the first-in-class, high throughput Barozyme HT48 for the enhanced preparation of proteins for mass spectrometry (protein) analysis. See Figure B. The bench-top Barozyme HT48 is capable of processing up to 48 samples simultaneously using the Company’s new and proprietary BaroFlex 8-well processing strips. Figure B. The BaroFlex strips were designed and manufactured to the industry-standard micro-titer plate format, which the Company believes will allow the new Barozyme HT48 system to integrate well with the automated, standardized, high throughput liquid handling robotic and analytical systems installed in tens of thousands of biological research laboratories worldwide. The Company believes the Barozyme HT48 High Throughput System can significantly fuel growth and increase revenue for existing and new PCT-based applications and products and greatly facilitate the commencement of new strategic partnerships.
PCT vs. Existing Methods
There are a number of existing methods used by scientists for biological sample preparation, including mortar and pestle grinding, sonication, homogenization, and bead beating. PBI believes that PCT offers significant advantages over these methods, including safety, speed, reproducibility, versatility, and ease-of-use, often with a substantial increase in the quality of the final results. There are currently well over 100 scientific publications and presentations from independent laboratories that highlight and confirm these clear advantages of PCT over other current methods.
PBI derives revenue from the sale, lease, or rental of all of its five Barocycler instrument models, as well as from the recurring purchase of consumables required for the PCT process, including single-use processing containers (PULSE Tubes, MicroTubes, BaroFlex 8-well processing strips, and Shredder Tubes) and reagent kits, and from instrument service contracts, replacement instrument parts, and grants. The Company also derives revenue from the sale of pressure-based cell disruption instruments and associated consumables used for larger scale sample processing. These pressure-based products are provided to PBIs by one of our strategic partners, Constant Systems LLC, from the UK.
Figures X & Y
Industry estimates suggest that there are approximately 80,000 laboratories worldwide that require the extraction of DNA, RNA, proteins, lipids, and small molecules from biological samples for their research studies. Based on market research results to date, and the fact that PCT is a novel cutting-edge technology currently uncontested in the field of small volume, high pressure preparation of research samples it is expected that a large number of these laboratories will benefit from the advantages of the PCT Sample Preparation System. The Company believes it can capture a reasonable share of this existing market over the next 3-5 years and become a highly successful and profitable life sciences instrument and consumables provider.
Although the Company has nine employees, with just one in a fulltime sales capacity, PBI has nonetheless installed approximately 250 PCT Sample Preparation Systems (Barocycler instruments plus required consumables, or “PCT Systems”) through June 30, 2014. Revenue for FY 2011 was approximately $988,000. Revenue for FY 2012 was approximately $1,238,000. Revenue for FY 2013 was approximately $1,503,000, a 21% increase over revenue for the same period in 2012. During 2013, the Company posted record quarterly highs for total revenue, products revenue, and consumable product sales. Revenue for the first two quarters of FY 2014 was approximately $712,000, all of which was derived from product sales. These results represented a 70% increase in product revenue compared to the same two quarters in 2013. During this same period, consumable product sales increased 93%, year-over-year.
Current customers include a number of top nucleic acid (DNA, RNA) and protein research laboratories in the U.S. and Europe, including government agencies and research institutions such as the Food and Drug Administration (FDA), Federal Bureau of Investigation (FBI), National Institutes of Health (NIH), Centers for Disease Control (CDC), US Department of Agriculture (USDA), the VA Hospital System, and Pacific Northwest National Laboratories (PNNL). PBI has also installed PCT Systems in academia, such as the Harvard School of Public Health, UC–San Diego, UCLA, George Mason University, Thomas Jefferson University School of Medicine, the Barnett Institute of Northeastern University, Vanderbilt University, Florida International University, the University of New Hampshire, the University of Kentucky, the University of Wisconsin, the University of North Texas, Montana State, and Lawrence Berkeley National Laboratory. PBI also has diagnostic, biotechnology, and pharmaceutical customers, including Amgen, Novartis, Biogen, Merck, Monsanto, Bristol Myers-Squibb, Thermo Fisher Scientific, Regeneron, Takeda Pharmaceuticals, and Target Discovery.
In the coming months of 2014 the Company expects to continue the development of an aggressive sales and marketing strategy, which includes increasing the Company’s internal direct sales and marketing staff during the second half of 2014, combined with the sales and marketing capabilities of one or more strategic partners in specific areas of the life sciences. PCT is well suited for partnerships with companies already in the spectroscopy (NMR, EPR, CD, Mass Spec) and forensics areas; the Company is currently talking with significant players in these areas.
Future New Product Growth
Although PBI expects to maintain a sharpened focus on short and long-term business goals going forward, primarily in the area of biomarker discovery for drug design and development), the Company has strong IP and proprietary positions in other areas, such (i) forensics (better processing of bone DNA and enhanced rape kit testing); (ii) infant healthcare (non-invasive methods for the analysis of gut function to enable a better understanding of the gastrointestinal system); (iii) public health applications (enhanced anti-bioterror, Lyme Disease, and food-borne disease testing); and agriculture (better detection of disease causing organisms). There is also the potential of using PCT for enhanced enzymatic reactions in the area of bio-fuel development, using PCT for the inactivation of pathogens in the development of vaccines, and in other important areas of sample preparation. These strong positions lend themselves well for potential technology spin-offs and licensing possibilities.
Pressure BioSciences’ management’s vision is to further develop pressure cycling technology and the PCT-based product line with its collaborators and customers so as to increase the quality of research and speed the time to scientific discovery, which in turn will improve healthcare and save lives, worldwide.
For more information about Pressure BioSciences, Inc. - www.PressureBioSciences.com
The company paid consideration to SNN or its affiliates for this article.
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