Akers Biosciences Inc. AKER is rapidly expanding in China, its most growth-focused market after the U.S. In sync with such plans, the company recently announced that its joint venture (JV) – Hainan Savy Akers Biosciences Ltd’s – 10000 square foot production facility is now fully operational.
Savy Akers was established in Oct 2014 and Akers had contributed $64,901 for a 19.9% stake in the JV in Mar 2015. Savy Akers’ primary objective is to commercialize Akers Bio’s rapid diagnostic screening and testing products in China, excluding the flagship PIFA Heparin/PF4 Rapid Assay product.
NovoTek is the distribution partner for the PIFA Heparin/PF4 Rapid Assay product in China. Notably, the product was recently approved by China Food and Drug Administration (CFDA) for medical use throughout Mainland China.
The 10,000-square foot production plant is situated in the Haikou National Hi-Tech Industrial Zone, where Savy Akers' 2,500 square foot headquarters and research and development facility are also located. Akers Bio expects the production facility to gain regulatory approval for product manufacturing in a short time.
The joint venture has already started marketing a number of Akers Bio rapid diagnostic products in China. These include BreathScan DKA (a medical test for diabetic ketoacidosis), the METRON Breath Ketone Test (a test for an optimal metabolic state for weight loss) and Ke Tong (a fitness test).
These products focus on addressing the growing diagnostic needs of the Chinese population, who are highly exposed to health related problems like obesity and type 1 diabetes.
In accordance with CFDA regulation, Savy Akers has also completed clinical trials of BreathScan DKA. The study of this single use, non-invasive breath device showed 100% correlation with blood-based reference laboratory testing procedures. The company expects regulatory approval in the near term.
METRON and Ke Tong products are now being marketed through China’s e-commerce platform WeChat. During the third quarter, Akers started selling METRON online through Amazon AMZN and its own portal.
Although these breath rapid diagnostic products hold promise for the future, we believe PIFA Heparin/PF4 Rapid Assay product is the key growth product in the near term. The CFDA approval is expected to drive minimum purchase requirements of Novotek – to approximately $1 million in 2015 and $6 million in 2016.
Notably, PIFA Heparin/PF4 is the only rapid test designed to detect Heparin Induced Thrombocytopenia (HIT), which is the development of thrombocytopenia (a low platelet count). Akers Bio believes that China will eventually become its largest market outside the U.S. over the long term.
Stocks to Consider
Stocks that warrant a look in the medical sector are Nxstage Medical NXTM and ICU Medical ICUI. Both the stocks sport a Zacks Rank #1 (Strong Buy).
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