Exalenz Bioscience Ltd. (TASE:EXEN), which has developed exhaled breath tests for the diagnosis of digestive conditions, has reported receiving a US marketing permit for lab tests for the H.pylori bacteria (which causes ulcers). Following this announcement, the company's share price rose 4.4% and the company is traded at a market cap of NIS 285 million. Exalenz is controlled by Mori Arkin (73%). In the past six months, the company's share jumped 220%. The company already had an H.pylori exhaled breath tests, but only tests analyzed at the doctor's clinic. Lab tests constitute the lion's share of the market (90%), leading the company to estimate that receiving the permit will significantly bolster its revenue, even as early as 2017. In the first half of 2016, Exalenz reported NIS 7.5 million revenue.
Aspirations to grow in the field of exhalation
The H.pylori exhaled breath test market currently totals $100 million, divided between the doctor, the lab and the company developing the test; therefore, the test developers' market totals several dozens of millions of dollars. Exalenz estimates that the exhaled test market will significantly grow in the next few years, at the expense of the H.pylori blood test market, which is five times as large, but loses 15-20% annually to the breath test market.
Exalenz's primary competitor in H.pylori breath tests, Otsuka Pharma, markets tests for both clinics and labs, and currently controls the market.
Exalenz CEO Raffi Werner said, "Our product is newer and their product is a veteran product, for better and for worse. Doctors and labs are used to working with their product, but our product has a more modern and friendly interface and our test is also more accurate. In the doctors' clinic market, we have been gradually growing at their expense, although they still control the market. We estimate that the same will happen with lab tests. As mentioned, the exhaled breath test market continues growing at the expense of blood tests; thereby, new clients who do not at present use the competitor's device are constantly added."
The product will be marketed by Exalenz's US sales team, which might now expand. At the end of the second quarter of 2016, the company had NIS 5.7 million in cash. The product's marketing is expected to begin in a few weeks.
Published by Globes [online], Israel business news - www.globes-online.com - on November 2, 2016
© Copyright of Globes Publisher Itonut (1983) Ltd. 2016