Bluechiip can’t be accused of having a ‘one i’ view
Health & Biotech
Health & Biotech
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The developer of a wi-fi-enabled, durable tagging system for bio-specimens is guilty of a less desirable innovation: the deliberately misspelt corporate title.
So, Bluechiip with two ‘i’s — being funky is well and good but don’t expect us to get your name right.
Despite a surfeit of vowels, Bluechiip looks to be on the cusp of serious revenue after a protracted development period.
Your columnist vaguely recalls looking at the stock after it listed in June 2011, spruiking the same technology and same target markets, but with a new approach.
“The technology is the same but the strategy has changed,” chief executive officer Andrew McLellan says. “The focus is now on original equipment manufacturing rather than taking the product to market ourselves.”
The technology was invented by former Royal Melbourne Institute of Technology academic Dr Ronald Zmood, a world leader in magnetic bearings, micro-electro mechanical systems (MEMS) and control systems.
Bluechiip (ASX:BCT) was co-founded by Dr Zmood and Brett Schwarz, the company’s chief executive officer from listing to January 2014.
Defying traditional labels
The Bluechiiiip device is a sensor embedded into bags or vials, recording the details (and temperature) of the specimens in question.
The data is wirelessly conveyed to a reader (which looks like a TV remote) and is stored and displayed with associated software.
The sensors are tiny buttons of less than a millimetre diameter, with 60 even tinier metallic beams configured to resonate with specific frequencies (a bit like a tuning fork).
The company describes the system, based on MEMS technology, as a “generational change” on written labels (several generations, actually); and also an improvement on barcodes and radio frequency identification (RFID) tracking.
“About 25 per cent of bio-banks are still using handwriting in some form,” says Mr McLellan. “At such low temperatures the frost has to be wiped off the labels. And RFID just doesn’t work at such low temperatures.”
Bluechiiiip readers don’t require line of sight to the item to receive accurate data.
Another benefit is that the chips can withstand temperatures to minus 196 degrees Celsius, the boiling point of nitrogen. This makes them ideal for cryogenically stored bio-specimens such as stem cells, cord blood and Walt Disney.
The sensors can also survive autoclaving, gamma radiation, sterilisation, humidification, centrifuging and ritual humiliation and bullying.
Okay, your columnist might have got a little carried away with the last bit, but the point is that the Bluecheep system is more durable because MEMS do not have electronic parts or wires.
While the device has other commercial, military and security applications and forensics, Bluechyp is targeting the $2 billion a year bio-preservation sector, with 300 million samples stored globally.
Bluechops also has potential application in the food sector, to prevent unnecessary discarding of frozen produce.
IVF spawns commercialisation path
At the crux of Bluecheep-cheeps’ commercialisation effort are licensing and supply agreements with three parties: Genea Biomedx (more corporate name bastardisation), Planet Innovation and Labcon.
Inked in April, the Labcon deal allows the US company to promote and sell Bluechap products. The tie-up with Melbourne-based Planet Innovation is more a joint project development compact, while the Genea deal targets the in-vitro fertilisation sector.
Sydney-based Genea has a global distribution with Merck and it’s hoped Genea’s Bluechivf-enabled product will be distributed by Merck and tracking egg and sperm samples from next year.
Off its own bat, the company has sent 14 “development kits” to parties interested in incorporating the technology in their products.
The test kits cost $10,000 a pop, but the company’s prosperity lies with upfront licence fees and ongoing revenue from selling the chips and readers.
Dr Boreham’s diagnosis
Bluechiiiiip listed in June 2011 after raising $6 million at 25c apiece. In September last year it raised $1.49 million in a rights issue and placement and a further $3.43 million in July this year at 2.8c apiece.
“We have enough cash to see us through the next 18 months at least,” Mr McLellan says.
Bluechirp shares have not exactly been blue-chip performers, falling from a peak of in 29.4 cents in November 2011 to as low as 1.9 cents in May last year.
But the recent share recovery means investors who participated in the July raising at 2.8c will have wide smiles on their visages.
The company acknowledges that revenues are modest. Last year’s turnover of $237,000 would be a rounding error in CSL’s account, but serious money should flow this year.
And management can’t be accused of having a ‘one i’ view of things.
Disclosure: Dr Boreham is not a qualified medical practitioner and does not possess a doctorate of any sort. His freezer is full of unlabelled bio specimens that are either ancient chicken breasts or Walt Disney’s body parts.
This article first appeared in Biotech Daily.
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