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Old cancer tech gets new life with successful funding round for TruScreen

TruScreen is the creator of a digital wand that touches the outside of the cervix, measures the electrical and optical signals in the tissue, and recognises pre-cancerous changes in real time. 

The product is marketed as less invasive and more efficient than the traditional Pap smear test.

Auckland-based TruScreen is set to list on the NZX Alternative Market on Wednesday.

TruScreen chief executive Martin Dillon says the company’s marketing focus is on developing nations where there are no national screenings programmes in place, as the device provides immediate results, is portable and requires minimal training to operate.

The device is also less invasive, as it doesn’t need to take a scraped tissue sample, which Dillon says makes it a more comfortable procedure for women. 

TruScreen’s revenue from April to September this year was $400,000, with distribution partners in 11 countries, including Russia and Mexico. The company made a loss of $1.5 million in the eight months to April.

Dillon says the company is not yet profitable, but will move into the black for the 2016 financial year, when sales are predicted to be $10 million, with a profit of $2 million.

“There are around 1 billion women of screening age living in our target economies. That $10 million represents just 0.15 percent of this target market,” he says.

He says they have been engaging international markets by managing local sales distributors and experts in women’s health instead of employing salespeople. 

TruScreen is also talking to a distributor about a price point for the New Zealand market.

Although the company is currently focusing on using the system for cervical screening, Dillon says there’s potential for TruScreen to detect cancers in other types of tissues, such as bowel cancer, oral cancer and throat cancer.

TruScreen’s previous life

The device was first conceptualised and created at Sydney University in 1983, but it was only approved as a stand-alone screening device in 2004.  

Bio-technology company Polartechnics first attempted to commercialise the technology in the 1990s and early 2000s. They had some success when medical devices company Johnson & Johnson began to market the device. The company was listed on the Australian stock exchange and at one stage had a market capitalization of over $200 million. 

The company then suffered a setback when an independent clinical trial found that it was not as successful as a Pap smear test, so Johnson & Johnson terminated their agreement.

Polartechnics was placed in voluntary administration in 2009 but was deregistered in 2012 after failing to find funding. This left TruScreen to pick up where they left off with the technology.

The directors of TruScreen are Robert Hunter, who’s invested in the device for over 20 years (Hunter was also chairman of the failed Polartechnics); Christopher Horn, who’s been involved with the company for a number of years; Sean Joyce who’s sponsoring the NZAX listing, and Tim Preston, a former stock broker. Dillon was also formerly with Polartechnics.

Fund raising

TrusScreen has been given a capital injection of $6.5 million from professional investors and Dillon says part of their promise to them was to seek listing on the NZX Alternative Market.

The recently raised capital was partly used to acquire product inventory and intellectual property for the cancer screening technology from Hunter, who is chairing the soon-to-be NZAX-listed firm. Capital raised will also go towards further development of the company, including development of the next stage of the product, which is a miniaturized hand-held TruScreen device and a move towards applying the technology for spotting other cancers. 

Martin Dillon: “It’s taken a long time for the industry to catch up with our science…”

On the reception for its technology, Dillon says: “New Zealand has shown a recent willingness to embrace novel technologies whereas other overseas markets are a bit reluctant, including Australia.” 

The company had issued 144 million shares at $0.10 per share in its recent capital raising. Sixty per cent of the company is New Zealand owned. It expects a market capitalization of $14 million at listing.

The intellectual property is kept under the protection of patents and trademarks, as well as ensuring some of the manufacturing elements are kept secret from suppliers.

Dillon says it has taken a long time to come to fruition commercially, as it was a challenge to create a practical, clinically-accurate system to use the technology.

“It’s taken a long time for the industry to catch up with our science, but now we’re ready to market,” Dillon says.

Elly is Idealog's editor and resident dog enthusiast. She enjoys travelling, tea, good books, and writing about exciting ideas and cool entrepreneurs.

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