Despite setbacks, Radient expects to see benefits from new major partnership
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Written by M.E.Garza
Friday, 10 June 2011 06:41
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In early January, Radient Pharmaceuticals (Amex:RPC) and it’s exclusive India-based distribution partner Gaur Diagno, Pvt Ltd (GDL) announced that through a cancer education and screening program, the group would target over 2.2 million people in northern India. What exactly happened to that program?
In both an official press release issued in January as well as in an Expert Briefing authored by Dr. Umesh Bhatia, Ph.D,-- the senior advisor for the India Onko-sure operations-- in early March, officials outlined their plans to collaborate with Indian government agencies to establish GDL-sponsored cancer screenings.
There was both fanfare and skepticism to the announcements due to the fact that the ambitious $10 million revenue estimates announced by Radient were based on preliminary sampling responses to an initial outreach program in potentially high cancer prone districts of northern India.
Gaur Diagno had estimated to Radiant that Onko-Sure test kit usage could potentially reach 25,000 in FY 2011, but did warn that estimates were subject to change. Douglas MacLellan, Chairman and Chief Executive Officer of Radient Pharmaceuticals vigorously defended the Indian program in an interview published in this space stating: “Our effort in India through Gaur Diagno is different in the sense that they have put together the first government-backed general cancer screening program on the planet. Nobody else has done this. They are leading in a unique space to try to interdict on cancer in its earliest stages. And the reason they (Indian government) are doing it, is they have a high incidence of cancer and they are worried about it. And their constituents are worried about it so they are trying to do something.”
One attack piece and and several documented tweet and blog entries by tabloid reporter Adam Feuerstein, began to cast doubt on the entire screening program and shaved millions off the company's market cap when he convinced some readers that Gaur Diagno did not even exist. When questioned about it specifically, the tabloid reported stated that no one at India’s Ministry of Health had any records of the company and that Gaur Diagno wasn’t even mentioned in Radient's 2009 annual report filed with the SEC.
Feuerstein, who-- according to a former co-worker now employed by a major stock market news publisher in New York—once attempted to leave the news business to unsuccessfully run an investment hedge fund, has belittled and attempted to discredit the established credentials of the Indian distributor; at one point even reaching out via cyberspace to readers based in India who might be willing to help him expose more (negative) information on Gaur Diagno.
While his motivations has been questioned, it has been established that Feuerstein is compensated and encouraged by editors at TheStreet.Com (themselves a publicly traded company) to publish mostly attention grabbing, often ill-researched reports designed to draw internet traffic from millions of investors to his opinion articles (most often broken up into several pages in order to generate even more advertising revenue from banner ads) recently attacked the company’s commercialization efforts again. His report hurt the same shareholders of RPC he has repeatedly referred to as “retards,” and contained several errors and misinterpretations of the facts. These errors were discussed by Radient officials in an email which was forwarded to this publication by an advisor to the company. Radient, however, has yet to act or publish any response to that article’s errors despite the fact that their concerns all appear to be valid and supported by facts.
Even as the integrity and efforts of Gaur Diagno continue to be called into question, his group has apparently kept focus on multiple fronts in that country.
We requested an interview with Dr. Bhatia to get clarification regarding the situation in India.
“The India operations have come a long way,” explains Bhatia. “They started several years ago and achieved approval from the (Indian) Health Ministry to import and sell Onko-Sure in India. That process took about a year or so. They did several studies with major cancer hospitals which were very important to establish that Onko-Sure would give similar results in the Indian population (as those seen in other populations when checking for various cancers). Besides the government sponsored programs which we have continued to diligently work on, there is a new joint venture/partnership with Super Religare Laboratories which is the biggest diagnostics lab in India. They serve over fifty-thousand doctors in every hospital, in every state in India.”
According to Super Religare Laboratories’own website the firm performs over 33,000 tests per day and catered to approximately 4.20 million customers during the nine month period ended December 31, 2010. They offer a comprehensive range of over 3,300 diagnostic tests, from the routine to the highly specialized tests covering most known diseases.
Asked why Radient had not disclosed this positive development in recent filings or issued a press release about the new development, Dr. Bhatia said that the new partnership had been established directly through his efforts and Gaur Diagno; the exclusive India-based distribution partners of Radient- and not by Radient Phamaceuticals itself.
“We’re currently in launch prep mode. Given the massive population base, Radient should clearly benefit and sell more units, but we are the ones who established the connection and have been busy training hundreds of sales reps,” explained Bhatia. “Even this past week I have been personally helping to train sales teams who will help doctors in all those labs and hospitals adopt the Onko-Sure test. They are all very excited and feel the low-cost cancer detection technology allows them a strong differentiation in a marketplace full of various other tests which are more expensive. In fact, I’ve been asked to train more sales personnel than we had anticipated and they will be gradually deployed in this process.
In addition, we have teamed up with another government screening program in another major cancer hospital and are in very late-stage talks with them to do a joint banner program with them, this time in Southern India. This is all positive news, but I think the message here is that the efforts in India are focused on the long term success for Onko-Sure and that we all remain steadfast in our progress. ”
While Dr. Bhatia’s revelations sound promising, the original government backed screening program for Northern India which was announced so enthusiastically, has failed to launch as planned according to the most recent filing issued by Radient.
"The anticipated government project, unfortunately, has not been funded to date for several reasons that we cannot fully disclose here.” explains Dr. Bhatia. “Our team is continuing to work various political figures and entities throughout India on these efforts and, in fact, talking about expansion to other parts of the country.”
While Bhatia would not comment on the nature of the delay in the launch, multiple sources indicate that certain members of the Indian Government themselves are alarmed by the potential number of patients who will test positive once they use the non-invasive tests (which are capable of detecting up to 19 types of cancer).
“Sadly, they are afraid that public government hospitals are simply not equipped to handle the case loads that are projected based on the initial responses to the 64-point questionnaire which they have been distributing,” said one person who attended a closed door meeting with Indian officials to discuss the problem. “They’re scrambling to slow the launch and spread the screening program out over three years and they’re trying to do it quietly so as not to mount even more political pressure from their constituents who continue developing cancer and dying at alarming rates.”
There are a reported 2.2 million people in these potentially high cancer prone districts of northern India.
The program, which was set to administer RPC's Onko-Sure cancer tests through widespread deployment of mobile cancer screening laboratory units and to cancer patients contacted through Physician-referrals in order to help reduce the incidence of fatal cancer via early detection.
But it seems Radient officials are not willing to discuss the nature of delays. Perhaps that approach is for the best given the risk of injuring political relationships they are counting on for future and pending business deals in that country.
“All I can say at this point is that the program is not funded,” explains Dr. Bhatia. “We actually got that news over the last six weeks or so, but we are still anticipating that we will be able to execute some of these government programs and the team in India is working diligently to make that happen.”
Dr. Bhatia was asked if he had read the most recent article attacking his team’s efforts.
“Yes, I’ve looked at that and the reporting seemed biased to me,” Dr. Bhatia responded calmly. “I think that over time people, including the folks at TheStreet.com, will see that the India operations are real and that the team is working hard on both the private and government programs. These things take time, but our focus is on long-term success. On the projections side, I think that we should expect the second half of the year to look much better than the first half.”
On the surface, at least, it sounds like Bhatia and his team have now found a way to offset some of the early projection misses. Note and debt holders who are working with company officials to make sure that Radient shows up to their upcoming follow-up meeting with little or no debt on their balance sheet have taken notice of the news and appear to be "95% of the way towards securing an agreement that will be very beneficial towards Radient and it's shareholders."
Stay tuned. The drama continues.
