Sydney, Jan 17, 2006 (ABN Newswire) - Eastland Medical Systems (ASX: EMS) is now nearing completion of commercial tooling for production of its ClipOn "Safe" needle device. Production is scheduled to commence in mid February 2006 at Eastland's Portland facility in Victoria and shipments for hospital trials in Australia, South Africa and the United Kingdom will follow shortly thereafter.
Eastland is presently completing documentation for the ClipOn application to the Therapeutic Goods Administration (TGA) for regulatory approval in Australia and CE marking for Europe. The launch of ClipOn to market will compliment and extend Eastlands position in the "safe injectable device" market segment following the recent successful registration of its RETRACTA range of manually retractable syringes. ClipOn is a "safe" hypodermic needle designed to replace leur fit needles on standard syringes, making it more cost effective and functional than other current safe retractable syringes. Eastland is initially targeting the 3ml and 5ml syringe markets for ClipOn and this segment represents more than 60% of the total market for hypodermic needles.
The first stage of ClipOn production of one million units will incorporate needles manufactured at Portland and the product will be manually assembled. The second stage is planned for the second half of 2006 with production capacity growing to five million units and incorporating a semi-automated assembly process. These systems and tooling are currently in the advanced design phase. The third stage of production is planned to be capable of producing 20 million units using a fully automated assembly process and multicavity tooling systems. Eastland's intention is to duplicate this production system at its South African subsidiary Eastland Medical Systems South Africa (EMSSA) giving the Eastland Group initial production capacity of forty million units per annum during 2007.
Upon completion of the production unit in South Africa, Eastland's target ex-factory price for ClipOn, complete with syringe, is approximately one third of the competitor price in Australia, recently quoted at A$0.75 for a retractable syringe.
ClipOn is designed to use one dedicated production line for all models, delivering considerable capital savings in bringing the complete product range of different needle sizes to market.
Eastland has delayed the introduction of ClipOn until it had established a global distribution network. This network currently consists of International Medical Devices and its subsidiary Meddis Limited in the UK, Eastland's subsidiaries Medical Industries in Australia and Health in Form in South Africa. These organisations are now positioned to launch ClipOn to market in their respective territories. This experienced and dedicated distribution network gives Eastland the confidence to move forward to create a fully automated production facility.
Group assessment of the Australian, Southern Africa, UK and European markets indicates initial potential demand for the ClipOn safe retractable needle is in the order of three hundred million units annually. Volumes in excess of one hundred million units are anticipated to substantially reduce production costs and open up further markets. Eastland's CEO, Mr Don O'Sullivan says "starting the production of ClipOn is a further significant milestone for the Company. The Eastland team has adhered to the business plan of establishing an effective distribution base before commencing production and we expect that this plan will prove to be a winning strategy in 2006."
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