PERTH FIRMS EYE NEEDLE PRIZE

Three Perth companies are racing against Eastern States rivals and the
clock to launch safe injecting devices before the year's end.

Last year, 250 new patents for retractable syringes were lodged around the
world as a swag of companies, including six in Australia, tried to
commercialise safe injecting devices in a bid to win a slice of the $190
million Australian market and the $US1.6 billion ($2.25 billion) expected
to be up for grabs in the US by 2006.

The US legislated a Needlestick Safety and Prevention Act in 2000 and,
though not legislated in WA, retractable needles, syringes and non-needle
systems are now being used in Perth's teaching hospitals, despite problems
with product designs. And they are about to be tried out in hospitals
around the country.

Three Perth hopefuls - RiTract, bioMD and Eastland Medical - have floated
since 2002, but each has been gripped by share trading volatility as day
traders hop in and out of the stock.

DJ Carmichael analyst Wendy Chesson said the first company to secure
suppply contracts with the big health-care companies would grab the advantage.

"They are all very similar products, once any of the big health companies
change they will stick with it," Ms Chesson said.

"They all have agreements for manufacturing in place, but unless they've
got some arrangements it will be a scramble to see who gets in.

"The first one who can get to the large players in the market will probably
do the best in the long run."

Nedlands-based RiTract is the only one of the trio to have devloped a
retractable syringe where the needle draws back into the syringe. Both
Eastland Medical and bioMD are developing needles that fit onto standard
syringes and automatically cover once used.

Eastland and bioMD argue needles are cheaper to produce and more versatile
than the retractable syringe, although RiTract claims that with its
manufacturing plant in China there is plenty of room to cut costs.

Eastland, the first of the three WA companies to list in January 2002, has
six safe injecting devices and expects to have its lead product, the
clip-on retractable needle, in the market by the end of the year.

The retractable needle is not reusable and fits most standard syringes to
delivery drugs and transfer blood.

Chief executive Don O'Sullivan said that with five international
corporations already supplying needles and syringes to hospitals globally,
he did not want to go head to head with the "big guys" by producing a
replacement product like a retractable syringe.

"We have an auxiliary product that makes theirs safe," he said.

Mr O'Sullivan claimed retractable syringes were also more expensive to
manufacture than a safety needle, saying Eastland's clip-on product would
cost about 3c more than the 20c cost of today's standard needle and syringe.

Eastland, which is the only one of the three companies with approved
patents to sell its device, believes the market is big enough to sustain a
number of producers and that patents will be the divider.

"Most of the devices coming into the market, we don't see that as the
greatest risk," Mr Sullivan. "It is a question of patents.

"It is a very competitive industry in that regard - can you make the
product at the right price and can you get into the market?

"From our point of view the size of the market on an international basis is
gigantic.

"It will support many substantial companies in this sector of the market."

Like Eastland, bioMD, which listed in March, has developed a suite of
needle and syringe products in addition to its lead product, the self
capping POP safety needle.

BioMD is still awaiting its patents but its 10 claims were cleared
recently, praving the way for a successful patent grant.

It too expects to have its POP needle out by the end of the year.

Chief executive Michael Bennett conceded it was a race to get a product
onto the market but believed competition for the hospital market would come
down to economics.

While some Perth hospitals recommend using a US-made safety needle which
costs about 30c, Mr Bennett expects POP to sell for between 15c and 20c.

"You have got to consider market expectations and one of the big factors in
health is no money," Mr Bennett said.

"It becomes an economic issue as to what the hospitals use."

The Feederal Government has committed $17.5 million for its Retractable
Needle and Syringe Technology Initiative which is aimed at finding a device
for illicit drug users.

BioMD has developed a mini-dose safety syringe for the project which it
claims meets the Government's nine criteria.

RiTract also claims to be one of two companies that has met the
Government's criteria.

RiTract has secured a manufacturing partnership with one of China's biggest
producers of syringes, Shandong Weigao, and expects to sell its retractable
syringe in China almost immediately, although it is still awaiting patent
approval.

Chief executive Rupert Northcott said it expected to launch the product
into the Australian market before the year's end but, like its two Perth
competitors, it has no contracts in place.

While retractlbe syringes are typically more expensive to manufacture than
safety needles, Mr Northcott said RiTract's choice to manufacture in China
had slashed costs.

"If we have to sell it for 20c, we would be able to sell it at that price,"
Mr Northcott said.

"But we think the market will pay a premium for safety products. The
demand is going to be very big, we believe.

"We will be able to match what the market is prepared to pay."

Mr Northcott also believes the global market, which consumes about 30
billion syringes annually, is big enough to accommodate a number of players.