An Introduction To A New Tech Diagnostic Company – LexaGene
LexaGene (TSX.V:LXG & OTCQB:LXXGF) is Company that was just introduced to me about three weeks back. I have done quite a bit of research behind the scenes which includes meeting up with the President Daryl Rebeck.
Today Daryl joined me for an introduction interview to outline the Company’s new diagnostic product and the markets they are focused on initially. I wanted to introduce LexaGene before the prototype products are read which is slated for November of this year.
we could only cover the high level aspects of the Company but please comment and email me directly – Fleck[at]kereport.com – if you have any follow up questions for Daryl or I.
Click here to visit the LexaGene website for further information.
You can also click here to review the LexaGene presentation.
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Enjoyed your interview with Lexagene.Can you please inquire about any recurring revenues on this device.
A razor blade business model. Every time a customer processes a sample on the instrument, they will be required to use a single-use disposable cartridge. In addition, they will be charged a price for the liquid reagents on the system. We will likely issue software tokens to operate the instrument. The software will require the bar code on the cartridge to be scanned, and it will also look to see they type of molecular test the end user has the instrument perform. In other words, our instrument can screen samples for 1 – 22+ different pathogens. We want to be able to charge folks looking for just 1 pathogen at a lower price than those who look for 22 pathogens. The only way to make the billing fair, is to utilize a software token where folks are charged according to what the ‘order’ on the instrument in regards to testing.
Also what is the approximate cost to the end user and gross margins of this device?
We haven’t yet decided the selling price of the instrument, and we are refraining from stating a price until we have finished beta prototype development (next summer). The higher we price the instrument instrument, the fewer we will sell, and the less we will make from consumable sales. We need to model how the price point will affect adoption and figure out what is our ‘sweet’ spot. It is also possible we will sell at a lower cost to some customers who enter into a reagent contract with us (i.e. they guarantee purchasing $40K/year in reagents). For the instrument and cartridge, this will all be TBD next summer. But on a high level, you can expect from 20-65% margin on the instrument, whereas the cartridge/reagents will be 90+%, since they are so inexpensive for us to manufacture.
Can this unit be used for any other tests such as cancer and or DNA anomalies?
Yes, but cancer is not our target market, since generally you don’t really need the answer back in 1 hour, as the patient can wait several days. Although our instrument will be able to easily look for cancer mutations in a homogenized tumor biopsy, I would not recommend our technology for analyzing a liquid biopsy (i.e. plasma for ctDNA, where there is expected to be an abundance of WT DNA). For this application ddPCR is better.
This gets very technical, if someone wants to discuss this in depth, have them contact me.
Also will this device be sold internationally?
What about the sales and marketing staff as well as the manufacturing facility of the device. Are these in place or do they need to be implemented?
When the time is right (probably 6 – 8 months before product launch), we will hire a sales staff. We will outsource manufacturing…as we are positioning the company to be acquired by a bigger company, and we don’t want to hire folks, who might be let go due to an acquisition.
Thanks for taking time to answer the questions Daryl!
Enjoyed your interview with Lexagene.Can you please inquire about any recurring revenues on this device. Also what is the approximate cost to the end user and gross margins of this device? Can this unit be used for any other tests such as cancer and or DNA anomalies? Also will this device be sold internationally? What about the sales and marketing staff as well as the manufacturing facility of the device. Are these in place or do they need to be implemented?