Life Systems Corporation
Company Data | Introduction
| Industry | Products | Competition
| Management
Project Revenue | Chinese
| Address: |
2889 - 152 ND Avenue NE, Suite B |
| Tel No.: | (425) 895-8335 |
| Fax No.: | (425) 895-8749 |
| Toll Free No.: | 1-800-471-0994 |
| Web Site: | www.lifesystemscorp.com |
| Corporate Email: | info@lifesystemscorp.com |
| Contact Person: | Alexander L. Von Kleist |
| Traded Market: | OTC B.B. Pink Sheet |
| Traded Symbol: | LIFS |
| Outstanding Shares: | 7.99 million |
| 52 Week High: | $ 2.45 |
| 52 Week Low: | $ 0.03 |
| Present Price: | $ 2.20 (04/06/2001) |
Life Systems Corporation is a medical device development
company that intends to design,
patent, and market medical devices related to organ perfusion niche markets.
Two devices have already been designed with the participation of leading
physicians and surgeons in human and animal physiology, and one of these, an
advanced organ perfusion workstation for research purposes has been
manufactured and sold. The founders of Life Systems Corporation have
participated in the field of organ perfusion and preservation for a combined
total exceeding 30 years, and product design and development is led by an
experienced group of trained professionals.
INDUSTRY AND EXISTING PROBLEMS
The Company is in that part of the medical equipment
industry involved with preservation of
animal and human organs outside the body. Such organs may be used for
transplant into patients whose organs have failed, for research studies on
drug therapeutics, toxicology, drug metabolism and pharmacology, and in
other medical disciplines where there is a need to keep human or animal
organs alive outside the body. Organs for transplant come from a
just-deceased organ donor from whom the organ can be removed before the
organ is clinically dead. If intended for transplantation, the organ then
must be matched to the medical criteria of a particular recipient and must
be transported and transplanted while still clinically alive.
In the organ transplantation sector alone, manufacturers revenues exceeded $15 billion in 1995, and revenues are projected to exceed $29 billion in 2002, a CAGR exceeding 15% (Frost & Sullivan, 1999). The enormous demand for organs and associated products is creating great opportunities for companies in this market.
Presently, there are 54 independent organ procurement organizations divided into twelve geographic regions and 275 transplant centers in the United States. There are, approximately, an equal number of similar organizations and centers outside the United States. Clinical management, pre- and post-surgical and hospitalization expenses for organ transplants are estimated to exceed $8.0 billion yearly in the United States alone.
One of the major hurdles to organ transplantation is the effective maintenance of organs outside the body during transport from donor to recipient.
“Organ preservation is a key factor contributing to improving organ transplantation… there is a growing need for methods to successfully preserve the harvested organs so that all are transplanted.” (Frost & Sullivan, 1999).
Both an effective organ preservation unit and an associated perfusate are required to better sustain human organs during transport. Because of the inadequacy of current transport techniques, heart function is generally reduced to levels precluding transplantation after more than four hours' preservation time; for the liver this cutoff time is approximately six hours.
Life Systems' products are based on perfusion - the circulation of fluids (containing ingredients necessary for the organ to be viable) in an isolated organ using the organ's own vascular network. An organ is placed in a special chamber and connected to tubing, through which a proprietary fluid (the “perfusate”) is pumped to keep the organ alive. The administration of the perfusate is controlled by a computer, which also monitors and controls key physical parameters.
Life Systems Corporation will serially develop and market three distinct products and associated disposables:
The LifeSustainer™ 1000, an advanced isolated organ perfusion workstation with highly integrated physiological assessment capabilities.
The LifeSustainer™ 2000, an FDA-approved isolated organ transporter for human organ transplant applications.
The LifeSustainer™ 3000, an FDA-approved human organ isolation unit for in-vivo treatment applications.
The technology used in these products is the subject of two issued patents, one licensed patent and several further patents currently in the application process.
In addition to the above, the Company intends to offer isolated organ contract research services to (a) those entities wishing to evaluate the efficacy of the technique with respect to their internal research and development programs, (b) who require a fully independent testing organization to evaluate data, carry out randomized trails and/or develop meaningful test protocols based on isolated organ evaluation, or (c) who do not wish to engage in the capital outlay required for purchase of the LifeSustainer™ 1000 unit, but nevertheless wish to utilize the gold-standard capabilities afforded by the technology.
Only one company - the medical division of Waters Instrument Co. - produces a device known to be competitive with the Life Systems Corporation product for isolated organ transport. The device sold by Waters is outdated, having been designed in the mid 1970’s, and therefore cannot be considered directly competitive to the Life Systems product. The parent company manufactures and sells water purification products for laboratory and industrial applications, and this constitutes by far the bulk of their business.
The organ transplantation business is by nature highly regulated, and it is likely that regulatory approval and market acceptance will be enhanced by an association with one or more established companies. Distribution patterns in the health care industry are such that large buying groups dictate what products are used for certain procedures throughout their sphere of influence.
Several major medical device firms have a market presence in one or more transplantation-based products or services and are therefore prospective candidates for a strategic alliance with, or outright acquisition of Life Systems Corporation. These include 3M Healthcare, Abbott Laboratories, Baxter Edwards, Bristol-Myers Squibb, Du Pont Merck, Fujisawa U.S.A., Glaxo Wellcome, Hoffman-La Roche, Medtronic, Pharmacia & Upjohn, Becton-Dickinson, Sandoz, W.R. Grace and Johnson & Johnson. Other smaller companies also exist as alliance candidates, including Sangstat Corporation, Abiomed, Biotime, Fresenius USA, Hepatix and Organogenesis.
Dr. Fereydoon Sadri, President and Scientific Director received his doctorate in Human Physiology from Kent State University and Northeastern Ohio University.
Dr. Nicholas G. Loebel, Director of Research has Masters and Doctorate degrees in Biomedical Engineering from the University of Washington.
Dr. Sum Ping Lee, M.D., Ph.D., is the Chairman of the Scientific Advisory Board. He is a Professor and Chairman of the Division of Gastroenterology at the University of Washington School of Medicine.
Dr. M.G. Sarngadharan is the co-discoverer (with Dr. R.C. Gallo) of HIV in 1985 and the developer of the first serological test for antibodies to HIV in 1985.
Dr. Louis H. Toledo-Pereyra, M.D., Ph.D., is Chief of Transplantation and Director of Research at the Borgess Medical Center in Kalamazoo, Michigan. He is a world authority on organ transplantation.
The Company projects $17 million in sales in year three with a net profit of approximately $4.2 million.
The Company expects to achieve $87 million in revenue by year five.
Two patents have issued and others are pending, with patent applications accomplished through a top patent law firm.
The market segments are clearly defined and all are subject to a high growth trend. The size of the transplantation industry today exceeds $25 billion with a healthy CAGR of 15% per annum. One U.S. market sector within this industry, the human organ transport market, is projected to exceed $160 million in the next three years (Frost & Sullivan 1999). Another market addresses a well-defined and unanswered research need: provision of a turn-key isolated organ perfusion system. A new and innovative design has been created to answer the needs of these researchers. This market could expand to several hundred million as soon as penetration into the drug development and combinatorial chemistry sectors is obtained.
The Company becomes mature in year three with gross margins of 70% producing $4.2 million in net earnings. An operating loss carry forward of approximately $5,100,000 expiring through 2019 is available to offset future taxable income.