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Precipio & ADS Biotec Sign Global Distribution Agreement for IV-Cell™

Specialty cancer diagnostics company Precipio, Inc. announced it has signed an exclusive global distribution agreement with ADS Biotec for the sale and distribution of its proprietary IV-Cell cytogenetics cell culturing media.

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Precipio and ADS Biotec recently completed the development and have fully validated a new version of its media, a next-generation improved product that will yield increased benefits over its first version. Both companies have developed an ambitious go-to-market strategy that will be launched next month, and will be joining forces to rapidly bring the product to market, introducing it to the top major labs worldwide.

ADS, and its Japanese parent company ADSTEC, are a worldwide market leader in developing, manufacturing and distributing the HANABI™ cytogenetics cell culture harvester, a machine critical to the downstream process of cytogenetic analysis, which includes using a cell culture medium such as IV-Cell. The installed base of HANABI customers includes most, if not all, large clinical reference labs that have significant cytogenetic test volume. Any current or prospective customer of ADS Biotec is a potential customer for IV-Cell, yielding significant synergies between both companies. As further explained below, this partnership offers significant value to ADS Biotec, to Precipio, and most important – to the customer.

“We could not have found a better partner to bring our proprietary media IV-Cell to market,” said Ilan Danieli, Precipio’s CEO. “ADS Biotec possesses all the qualities we were looking for in such a partner. Their brand and quality is undisputed; their sales and installed customer base which offer immediate access to target customers; and distribution capabilities are an asset that we would unlikely be able to replicate. This partnership makes a lot of sense on multiple levels; it is a true win-win for both companies.”

“The ability to bring novel, advanced technologies serves to enhance our value and relationship with our customers,” said Vijay Dube, CEO of ADS Biotec. “We are delighted to join forces with Precipio to bring this exciting new technology to market. IV-Cell brings not only improved efficiency and cost-saving benefits to labs; but it also improves the quality and accuracy of the diagnostic process, impacting patient care.”

Go-to-market strategy

As recently discussed in the recent Q2-2020 quarterly shareholder update, Precipio has embarked on a strategy to distribute its product through the formation of strategic partnerships, rather than attempting to build its own sales and distribution team. We have recognized that while our strength lies primarily in the development of these proprietary technologies; the time and effort required to build a sales and distribution network for each product vertical will require substantial resources, carries more risk, and may result in a prolonged effort to reach significant sales penetration.

Conversely, leveraging a strategic partner’s existing sales networks and long-standing relationships with potential clients, Precipio believes that these partnerships will yield a significantly faster, as well as more economically advantageous pathway to getting our products into both domestic and international laboratory customers as possible.

Why ADS Biotec

Precipio identified three key strengths that ADS Biotec possesses, which drove the decision to enter into this partnership:

  1. Market leadership, strong reputation, highest quality products in their Hanabi systems.
  2. Global sales presence, established technical support system and long-standing relationships with an existing installed customer base.
  3. Logistics and distribution facilities worldwide

Precipio’s IV-Cell cytogenetics cell culturing media is used by cytogenetics laboratories as part of the diagnostic process. The purpose of cell culturing is to grow the cells in a laboratory setting, mimicking the body’s conditions in order to identify the potential for abnormalities and malignant cells, indicating the potential presence of cancer in those cells.

Following the cell culturing process, the cells must undergo a process called “harvesting”. This is a complex and laborious process that prepares the cells for analysis. While smaller laboratories will conduct manual harvesting, the vast majority of larger laboratories introduce automation, including the use of an automated harvester.

The HANABI™ automated harvester, manufactured and distributed by ADS Biotec, is the world leading automated harvester; any major laboratory with substantial volume has a HANABI machine in their laboratory. Therefore, every customer of ADS Biotec is a potential target user for Precipio’s IV-Cell media. ADS Biotec has not only a global presence in over 30 countries; it has an extensive sales and support network to over 200 of the world’s largest laboratories. Through years of providing quality products and outstanding support, ADS Biotech has earned a stellar reputation in the industry; the company has strong credibility in the market, and long-standing relationships with the key decision-makers.

Furthermore, ADS Biotec also has global logistics and product distribution facilities worldwide, enabling the provision of rapid support to its customers. In the context of distribution of IV-Cell, ADS Biotec will be able to hold inventory and provide immediate product delivery and support to customers. This provides an additional benefit to this partnership.

The benefits of this partnership to ADS Biotec are also significant. IV-Cell enables ADS Biotec to leverage the HANABI systems by creating new “efficient” economics that can be attractive to additional segments of the lab market. Precipio’s technology will enter into the consumable market with a product that is directly tied to ADS Biotec’s core business, creating a compelling value proposition to ADS Biotec’s customers that will strengthen its ties with them. Furthermore, ADS Biotec can leverage its existing sales and support channels to drive more revenue. Lastly, as the business of consumables is an ongoing business, this creates a recurring revenue stream for ADS Biotec.

Product roll-out

ADS Biotec and Precipio will be launching its IV-Cell media in two phases:

A.    Beta-site study.

Through ADS Biotec’s relationships, Precipio has been introduced to several reputable laboratories worldwide who have agreed to participate in a beta-site study project. The companies anticipate the study initiation in Q4-2020, and will be completed by year end.

The benefits of this study will be three-fold. First, these laboratories will conduct their own, independent validation of the V2 IV-Cell Media to demonstrate the efficacy and experience the benefits of the product, compared to their existing media.

Second, both companies will aggregate the results of this extensive study and plan to publish and present the results in leading scientific journals, providing credible, widespread endorsement of the media. This is a critical supporting element to bringing such a new product into the market.

Lastly, following a successful validation, it is expected that these laboratories will immediately become the first customers for Precipio’s IV-Cell media.

B.    Full roll out

Following the completion of the study, ADS Biotec will put to work its global sales and support team to introduce the product to its entire installed customer base. Armed with a broad-based study conducted by multiple reputable laboratories, we anticipate that ADS Biotec’s team will be able to rapidly and successfully grow the customer base that will use the IV-Cell media.

Medical Device News Magazine
Medical Device News Magazine is a division of PTM Healthcare Marketing, Inc. Pauline T. Mayer is the managing editor.

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