Miraculins Inc.
TSX VENTURE : MOM

Miraculins Inc.

November 19, 2013 06:30 ET

Miraculins Announces 2014 Plans for Its Scout DS® Non-Invasive Diabetes Screening Technology

Pre-submission to FDA anticipated before calendar year-end to determine pathway for U.S. marketing clearance

WINNIPEG, MANITOBA--(Marketwired - Nov. 19, 2013) - Miraculins Inc. (TSX VENTURE:MOM), ("Miraculins" or the "Company") a medical diagnostic company focused on acquiring, developing and commercializing diagnostic and risk assessment technologies for unmet clinical needs, is pleased to announce its plans for the Scout DS® non-invasive diabetes screening technology for the upcoming fiscal year, which will include U.S. regulatory activity and expected sales expansion within Canadian pharmacy and employee health screening markets.

The Scout DS is the world's first non-invasive and highly-sensitive screening test for pre-diabetes and type 2 diabetes. It does not require a blood draw or fasting and generates a result in as little as 80 seconds. The Scout DS uses visible light to measure the optical signature of markers in the skin that accumulate due to damage caused by abnormal blood sugar levels and oxidative stress.

"Our team has been diligently advancing the Scout DS since our acquisition of this exciting technology approximately 90 days ago," said Christopher J. Moreau, President and Chief Executive Officer of Miraculins Inc. "Our 2014 plans for the Scout DS will see our team engaged in key initiatives for driving product growth and adoption."

In the short period since the acquisition of the Scout DS technology closed, the Company has significantly advanced various initiatives to maintain and build Scout DS market momentum, including:

  • Maintaining ISO:13485 and ISO:9001 certification of the Scout DS manufacturing facility in New Mexico, by successfully passing an ISO audit;

  • Enabling new scientific research studies, with third party collaboration, exploring the potential for new market segments and test utility expansion;

  • Re-appointing Pear Healthcare Solutions as the distributor of the Scout DS® to the Canadian Pharmacy segment;

  • Facilitating placement of the Scout DS into a major Canadian retail/food pharmacy chain pilot program;

  • Entering into a Letter of Intent to negotiate the licensing rights for the Scout DS in China;

  • Evaluating previous international Scout DS distributors to identify opportunities for re-appointment; and

  • Developing a regulatory strategy for the preparation of a submission to the FDA to gain approval for sale and distribution of the Scout DS in the United States.

Scout DS Business Model

The Company's business model is to sell Scout DS devices to established distributors in key market segments, which will then subsequently be rented or leased to their network of customers on a weekly, monthly or annual basis. These customers will utilize the devices to offer diabetes testing to the general public (the end user). The Company's revenues will be generated from the initial sale of the devices to the distributors, and from charging them a percentage of the rental or leasing revenue garnered from their customers. Use of the Scout DS device requires the additional purchase of proprietary consumable cleaning materials that will generate moderate additional revenue per test. Further revenues may be generated through territorial licensing, or through marketing partnerships with corporate brand partners who have an interest in further linking their brands and products with heath and wellness and the convenient screening of pre-diabetics or type 2 diabetics, and may involve the payment of upfront, milestone and maintenance fees.

Primary Sales & Distribution Channels

The Company has identified two leading market segments for the Scout DS, and is actively working to develop these markets in Canada, namely:

  1. Retail Pharmacy Settings - offering ongoing diabetes clinics to the public.

  2. Health and Wellness/Employee Screening - partnering with established service providers conducting employee screening and workplace wellness initiatives.

Retail Pharmacy

Individuals are increasingly interacting with healthcare professionals in settings outside of the physician's office. This includes accessing personal health, disease risk and screening information in settings such as retail pharmacies or large grocery stores with in-store pharmacy operations. As diabetes is not only a leading contributor to morbidity and mortality, but also largely preventable through early detection and intervention, the Company expects to see growing demand for the non-invasive, rapid testing offered by the Scout DS device within retail pharmacy screening settings.

The process of selling and marketing new health screening technology to this segment generally begins with pilot screenings, where the pharmacy can offer the technology through a limited number of its stores to gauge both customer and staff feedback and to refine operational issues, promotional techniques and community awareness programming. Once a pilot is complete, the potential of chain-wide or national expansion presents. However, buying cycles for the pilots and for the subsequent decision to expand the program throughout a given chain can be subject to extended review and consideration.

Health and Wellness/Employee Screening

Generally defined as employer sponsored or endorsed activities aimed at improving health-related behaviors, employee screening can include policies, education, coaching, on-site fitness facilities, and importantly as it pertains to Scout DS, medical screenings. Although, a focus on workplace wellness can lead to increased productivity through more satisfied and motivated employees, these programs are also increasingly being recognized for their economic impact through the reduction of absenteeism, disability and healthcare claims associated with diseases such as diabetes. Wellness initiatives are estimated to save an employer an average of $394 per employee per year, while costing an average of $159 per employee per year, resulting in a significant return.

Of note, people with diabetes incur medical costs that are two to three times higher than those without diabetes and a person with diabetes can face direct costs for medication and supplies ranging from $1,000 to $15,000 a year. There is an expectation on the part of the Company that the painless, rapid and non-invasive features of the Scout DS device will be seen as significantly advantageous within an employee screening setting. Both employers and corporate insurance companies have an interest in reducing the economic impact of declining health status on health insurance premiums and payouts, and are therefore key target customers within this segment.

There are a significant number of well-established distributors that provide a variety of employee screening services to large employers (generally considered to have more than 500 employees). The Company will look to identify and establish relationships with these distributors.

Prior to its acquisition by the Company, the Scout DS was demonstrated to a number of large Canadian employers. In addition to identifying possible distribution partners, the Company plans on following up with these employers and establishing them as early adopters within this segment.

Additional Key Initiatives and Activities

In addition to pursuing opportunities within retail pharmacy and employee health screening segments in Canada, the Company will be simultaneously advancing an additional series of initiatives, including:

FDA Clearance

Miraculins intends to file a pre-submission with the FDA before the end of the current calendar year to determine a regulatory pathway so the Scout DS can be marketed within the United States. It is believed that there are more than 25 million diabetics in the U.S., with roughly 7 million diabetics undiagnosed. In addition, there are an estimated 79 million pre-diabetics in the U.S., many of which are unaware of their status. Based on the dramatic impact of diabetes on the American public and the country's healthcare system, the U.S. would be expected to be a robust geographical market for Scout DS, with well-established sales and distribution channels existing in the market segments the Company has already identified for the device in Canada.

Territorial Licensing

As diabetes is a global epidemic, the Scout DS technology holds tremendous promise in territories around the world. In certain markets, based on a number of factors, technology licensing is favored as compared to establishing a distribution partnership structure. Miraculins is evaluating the potential of these markets, and recently announced a Letter of Intent to negotiate a licensing agreement for the rights to the Scout DS technology in China.

Evaluating Previous Distributors

The Scout DS is currently cleared for use in Canada, Mexico and the European Union and has registrations in India, Saudi Arabia, Kuwait, Bahrain, Qatar, and Turkey. Prior to Miraculins acquisition of the technology, a number of distributors had been engaged to various degrees in these markets. The Company is actively evaluating a number of these markets and distributor relationships to determine if there is a collective strategic fit for renewed representation.

Establishment of a Scout DS Medical Advisory Board

The Company is planning to establish a formal Medical Advisory Board for Scout DS, incorporating scientific and medical leaders in diabetes and related areas. The purpose of a Medical Advisory Board is to advise the Company on approaches to promoting an understanding of Scout DS and non-invasive diabetes screening, provide recommendations for the scientific and research goals of the technology and help with the overall awareness of the new technology within the medical community itself.

Scientific Awareness and New Research Opportunities

The Company is continually evaluating opportunities to build additional scientific awareness and support of Scout DS as a non-invasive diabetes screening technology, by highlighting existing study data and by commissioning new research opportunities.

Outsourcing Manufacturing

The Company is in the process of transitioning manufacturing of the Scout DS device from a Company manufacturing facility in New Mexico, to a contract manufacturing partner. At present, the Company is in discussions with a short list of potential vendors who have the capability of scaling to large volume production. Full production with the selected manufacturing partner is expected to begin in the second quarter of the Company's next fiscal year.

PR Activities and Healthcare Community Education

Miraculins is reviewing prior public relations efforts, as well as healthcare education and awareness materials and initiatives related to the Scout DS while considering new opportunities to enhance awareness of Scout DS and non-invasive diabetes screening within the general public and healthcare community. Such new opportunities will be ongoing, but will tend to be intensified around specific market development initiatives and milestones.

Summary of Goals for 2014

  • File a pre-submission to ascertain requirements for Scout DS clearance in the U.S. with FDA (prior to calendar year end).

  • Establish additional pilot programs within Canadian retail pharmacy settings, towards securing store-wide expansion agreements with several national brands.

  • Begin diabetes screening of employees in large Canadian companies as part of workplace wellness initiatives, in partnership with established employee screening service providers.

  • Assess potential for renewed partnerships with former Scout DS distributors in international markets.

  • Negotiate international licensing opportunities, including the continuation of the Chinese negotiations already underway.

  • Establish a Scout DS Medical Advisory Board.

  • Explore and support additional research opportunities.

  • Outsource manufacturing of the Scout DS to achieve greater efficiencies and yields by second quarter fiscal 2014.

  • Advance public and healthcare community awareness of Scout DS technology through PR activities and educational initiatives.

About the Scout DS System

The Scout DS system, is the first non-invasive diabetes screening system designed to provide a highly sensitive and convenient method for screening for pre-diabetes and type 2 diabetes based on the presence of diabetes-related biomarkers found in skin. Unlike current screening methods, a Scout DS test requires no blood draw, no fasting, and no waiting for a lab result. The product has been used and validated in thousands of patients around the world.

About Miraculins Inc.

Miraculins is a medical diagnostic company focused on acquiring, developing and commercializing non-invasive technologies for unmet clinical needs. A significant number of promising diagnostic opportunities remain un-commercialized because of the sizable gap between the discovery stage, when research institutions are typically involved, and the commercialization stage, when the larger commercial enterprises become interested. Miraculins has direct experience in bridging this gap. The Company's PreVu® POC Test is a revolutionary new coronary artery disease risk assessment technology that measures cholesterol levels in a patient's skin non-invasively, painlessly and without the need for fasting. The Company's Scout DS system is the first non-invasive diabetes screening system designed to provide a highly sensitive and convenient method for screening for pre-diabetes and type 2 diabetes based on the presence of diabetes-related biomarkers found in skin. Unlike current screening methods, a Scout DS test requires no blood draw, no fasting, and no waiting for a lab result. The product has been used and validated in thousands of patients around the world. The Company's preeclampsia program is partnered with Alere Inc., one of the world's largest diagnostic companies. For more information visit www.miraculins.com.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Caution Regarding Forward-Looking Information

Certain statements contained in this press release constitute forward-looking information within the meaning of applicable Canadian provincial securities legislation (collectively, "forward-looking statements"). These forward-looking statements include the Company's plans to file a pre-submission with the FDA prior to the end of the current calendar year, the Company's anticipated future revenues, the Company's marketing efforts within the retail pharmacy and workplace settings, the Company's expectations regarding the opportunities in foreign markets, especially the United States, the Company's plans to negotiate a licensing agreement for its technology for China, the Company's plans to establish a formal medical advisory board, the Company's plans to transition its manufacturing to a contract manufacturer, and the Company's ongoing review of its public relations efforts and educational initiatives. These forward-looking statements relate to, among other things, our objectives, goals, targets, strategies, intentions, plans, beliefs, estimates and outlook, including, without limitation, our anticipated future operating results, and can, in some cases, be identified by the use of words such as "believe," "anticipate," "expect," "intend," "plan," "will," "may" and other similar expressions. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements.

These statements reflect management's current beliefs and are based on information currently available to management. Certain material factors or assumptions are applied in making forward-looking statements, and actual results may differ materially from those expressed or implied in such statements. Important factors that could cause actual results to differ materially from these expectations include, among other things: Miraculins' early stage of development, lack of product revenues and history of operating losses, uncertainties related to clinical trials and product development, rapid technological change, uncertainties related to forecasts, competition, potential product liability, additional financing requirements and access to capital and the ability of the Company to obtain additional financing necessary to achieve its plans, activities and goals, unproven markets, supply of raw materials, income tax matters, management of growth, partnerships for development and commercialization of technology, effects of insurers' willingness to pay for products, system failures, dependence on key personnel, foreign currency risk, risks related to regulatory matters and risks related to intellectual property and other risks detailed from time to time in Miraculins' filings with Canadian securities regulatory authorities, as well as Miraculins' ability to anticipate and manage the risks associated with the foregoing. Additional information about these factors and about the material factors or assumptions underlying such forward-looking statements may be found in the body of this news release. Miraculins cautions that the foregoing list of important factors that may affect future results is not exhaustive. When relying on Miraculins' forward-looking statements to make decisions with respect to Miraculins investors and others should carefully consider the foregoing factors and other uncertainties and potential events.

These risks and uncertainties should be considered carefully and prospective investors should not place undue reliance on the forward-looking statements. Although the forward-looking statements contained in this press release are based upon what management believes to be reasonable assumptions, Miraculins cannot provide assurance that actual results will be consistent with these forward-looking statements. Miraculins undertakes no obligation to update or revise any forward-looking statement.

PreVu® and Scout DS® are registered trademarks of Miraculins Inc. All Rights Reserved. 2013.

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