Projects } TBK Capital

Simultaneous testing for multiple diseases

Pictor is a New Zealand biotechnology company which has developed a diagnostic platform that can be used for diagnosing multiple diseases, including COVID-19, from a single small blood sample. It will begin clinical trials of this patented diagnostic in USA, Europe and India in January

Pictor is a New Zealand biotechnology company which has developed a diagnostic platform that can be used for diagnosing multiple diseases, including COVID-19, from a single small blood sample. It will begin clinical trials of this patented diagnostic in USA, Europe and India in January
Pictor's multiplexed IVD assays allow multiple analyses to be tested from a single sample. This reduces the number of tests, and the complexity of the procedure, for users. It leads to better health outcomes through earlier diagnosis, prevention and treatment.
As the result of a decision to enlarge and expand their business, the Pictor board has decided to extend an offer of new shares in the company to include new, as well as existing shareholders.
Progress to date
The company has just completed - with the assistance of an ex-McKinsey consultant - in developing a detailed product evaluation and launch plan for their Pictor COVID-19 antibody assay. A patent has already been filed for this novel diagnostic assay which will be markedly more accurate than other COVID-19 antibody tests.  This test was developed by the Pictor scientists in Pictor’s Parnell laboratory under the leadership of Pictor’s Global IVD Director, Dr Sandeep Kumar Vashist, one of the world’s leading experts in COVID-19 diagnostics. 
Pictor is concluding contracts with two major diagnostic laboratories in the U.S. to evaluate the assay.  One is a lab chain with 18 laboratories which is intrigued by the high sensitivity, high through-put and low-cost structure. The other chain is planning to run 100,000 antibody tests per day – potential revenue for Pictor of $350,000 per day. Pictor expects both laboratories to become strong reference customers.  The Pictor assay will also be clinically validated at a premier university hospital in Germany where the most severe COVID-19 patients are treated. 
Pictor has also been developing a Mycoplasma bovis test with substantial (non-disclosed) funding from MPI, DairyNZ and Beef and Lamb. The second milestone in the development of the assay was recently achieved with the payment of $280,000 to Pictor. Support for the development of Pictor’s COVID-19 assay has been through a $500,000 grant from MBIE.   The NZ Government has also provided significant funding to Pictor through Callaghan Innovation. 
The priority use of funds from this incoming share issue will be to complete the Pictor COVID-19 antibody assay development with clinical validation in diagnostic laboratories in Germany, USA and India commencing in early January 2021. 
The markets
Here in New Zealand the Ministry for Primary Industries has confirmed a larger domestic market for Mycoplasma bovis testing than previously advised.  This presents a $2.4 million per year revenue for Pictor opportunity starting in August 2021.
It is forecast that when a vaccine for COVID-19 has been successfully introduced to the market, immunity may only last 3-4 months.  To determine whether revaccination will be required, population screening will be necessary so that individuals who no longer have COVID-19 antibodies are identified and prioritised for vaccination.  This is markedly going to increase the demand globally for antibody testing.  For example even if the NZ population was only tested once per year – which is likely to be inadequate – that would be 5 million tests per year – or an estimated $17.5 million from New Zealand alone. 
Share issue
The business has recently made an offer of new shares to existing shareholders and is now extending that to new investors.  The company is seeking $2.5 million in funding to support the completion of the development and clinical validation of its COVID-19 assay, its M. bovis assay and other novel new products it will take to the market in 2021. 
Pictor will have a hard close for the currently open round (target $2.5 million) by the close of business on Friday 6 November 2020. There are several meetings planned with investors this coming week that give the board confidence in setting this hard close.
These investors are both existing and potentially new shareholders. The opportunity remains for other shareholders to subscribe for the round. The pre-money valuation for this round has been set by the board to $22.51 million; the share price is $1.00 per share.
They are happy to report there have been some exciting milestones and developments at Pictor. All of the investors they have been engaging with were impressed by Pictor’s progress.
Pictor’s new strategy has been crafted (“Focus – Build - Transact”) and they are currently in the process of implementing the new strategy which has a goal of a trade sale of Pictor for at least $200 million by 2023.  This is under the leadership of diagnostic industry veteran, Dr Thomas Schlumpberger who recently joined Pictor as CEO.  Thomas is based in San Francisco where Pictor has opened a subsidiary, Pictor, Inc.  The incumbent CEO, Howard Moore, is now COO. 
With the existing grant funding, and revenue from sales of current products in India where Pictor has a subsidiary, this funding round will support the company as it completes product developments, and achieves regulatory approvals to launch the new products during 2021. The Pictor valuation is expected to increase significantly during the next 12 months with the market launches of the Pictor COVID-19 assay in New Zealand and important global markets. 
Want to know more?
An investor slide deck and a subscription agreement are both available for intending investors. If you’re interested reply to this email and I’ll get copies to you.

The above investment is not an offer of financial products that requires disclosure under the Financial Markets Conduct Act 2013 (Act) and is available only to wholesale investors as defined by that Act. It is intended for distribution only to selected people to whom, under the relevant laws, it can be lawfully distributed. It cannot be distributed in any other jurisdiction, or to any other people. It is not an offer or solicitations in any jurisdiction in which such offers or solicitations are not authorised, or in which the person making such offers or solicitations are not qualified to do so, or to any person to whom it is unlawful to make such offers or solicitations. Any representation to the contrary would be unlawful. No action has been taken by any person that would permit a public offering in any jurisdiction where action for that purpose would be required.


John Paine B.Sc., Dip BIA
TBK Capital Limited
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