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Lantis Laser, Inc. (OTC: LLSR)
Untitled Document
Lantis Laser, Inc. (LLSR) is developing and commercializing advanced technologies for applications in dentistry. The Company has exclusive rights to the application of Optical Coherence Tomography (OCT) technology for dental diagnostic imaging through its license agreements with LightLab Imaging and Lawrence Livermore National Laboratory.
LLSR is currently in Phase II development of its first product, the "OCT Dental Imaging System". The System has an unprecedented high resolution of up to 10 times that oftraditional dental x-rays and is designed to provide early detection of - tooth decay, periodontal disease and microstructural defects in teeth. Early
detection allows the dentist to promptly halt or even reverse the progress of the disease using non- or minimally invasive procedures, thus improving outcomes and enhancing the quality of patient care.
The Company plans to introduce the OCT Dental Imaging System in the third quarter of 2008 after the successful completion of Phase III development and clinical trials. This System addresses a potential market consisting of over 100,000 dental offices in the US and an estimated 100,000 offices in developed countries of Europe and Asia Pacific. Assuming every office purchases one OCT Dental Imaging System at the $20,000 retail price, potential product sales could reach $4.0 billion.
A business model capitalizing on technology advances
LLSR's business model leverages novel, advanced technologies developed in recent years, which enable high resolution imaging of biological structures. Optical coherence tomography (OCT) is essentially an optical analog to ultrasound imaging, which is based on time delay and magnitude. Its ability to provide resolutions approaching that of standard histopathology in real time and in-situ are fundamental advantages for medical imaging. The Company's OCT System developed for dental applications provides up to 10-times more detailed images than x-ray, can image occlusal (biting) surfaces where almost 80% of decay starts, and is the first dental imaging system to detect both tooth decay and periodontal disease at an early
stage. The System has the potential to change the way dental care is provided by enabling dentists to detect disease at earlier stages and immediately initiate a treatment plan to cure it.
Advantages create large potential market for LLSR's System
The OCT System has significant advantages over traditional x-ray systems currently used in dental offices. The OCT System can:
- Detect demineralization of enamel, the first sign of decay, which cannot be done with x-ray;
- Detect decay at an early stage before it shows up on x-ray;
- Detect decay in occlusal (biting) surfaces, which cannot be done with x-ray;
- Detect secondary caries around restorations at an early stage, which cannot be done with x-ray;
- Document the need for early stage treatment for insurance reimbursement. Early stage decay is not visible on traditional x-rays and cannot be documented at present;
- Capture images of soft tissue (gums) in real time.
Rapid progress through development pipeline
LLSR has already initiated FDA Phase II testing and is building five Beta OCT Dental Imaging Systems to specifications that will allow clinicians to image in the mouth and obtain high resolution scans that can display the characterization of oral diseases. The Beta Systems will be placed in clinical use settings with leading clinicians and universities to gather data and to solicit feedback regarding the user interface and for the final design of the commercial Systems.
Because the System is classified as a diagnostic "aid," the OCT Dental Imaging System faces minimal FDA regulatory scrutiny. OCT has already been cleared for bio-medical use in the ophthalmology and for other biomedical imaging. The Company expects to complete product development and clinical testing in the second quarter of 2008 and to introduce the System to the dental market in the third quarter of 2008.
Exclusive license for technology through 2020
The Company's licenses from Lawrence Livermore National Laboratories and LightLab Imaging give it exclusive rights to manufacture, use and sell diagnostic products for dental applications that incorporate technologies covered by Livermore's and LightLab's patents. With exclusive rights on some License Agreements through 2020, LLSR will have several years to establish its footprint, build market share and leverage its industry-leading position to introduce additional new technologies and products.
Highly qualified management team
LLSR plans to enter the commercialization phase with its dental OCT System in August 2008. Management expects to sell 360 units in 2008, with sales rising to 6,500 units in 2011. Sales are projected to exceed $71 million in 2011. We consider these estimates to be rather conservative given a potential market consisting of approximately 200,000 installed OCT Systems. Management's estimates assume only a 5% penetration rate in the first four years of commercialization.
Favorable sales outlook
LLSR plans to enter the commercialization phase with its dental OCT System in August 2008. Management expects to sell 360 units in 2008, with sales rising to 6,500 units in 2011. Sales are projected to approach $50 million by year-end 2011. We consider these estimates to be rather conservative given a potential market consisting of approximately 200,000 installed OCT Systems. Management's estimates assume only a 5% penetration rate in the first four years of commercialization.
Large market opportunity
US dental industry revenues exceeded $85 billion in 2007 and are expected to grow 6-7% per year. US sales of dental equipment are expected to growth 4% per year
and exceed $8 billion by year-end 2011. The dental industry is desperately in need of new modalities for the early detection of oral diseases since available treatments are very effective in treating diseases in the early-stage. Factors impacting the industry's growth include:
- Favorable demographic trends (senior population will reach 60 million by 2020);
- Growing demand for dental procedures;
- Increasing dental insurance coverage;
- Increasing evidence of link between oral health and overall health.
The OCT Dental Imaging System addresses the need for early detection and is a superior alternative to existing x-ray based solutions. The US has approximately 100,000 dental offices. Another 100,000 dental offices are located in developed countries of Europe and Japan. The initial market for the OCT System is the installed base of digital x-ray/camera (50,000 systems), accounting for approximately 25% of worldwide dental offices. These represent the technologically advanced users who are more likely to adopt further advanced digital modalities. Even at a modest 5-10% penetration rate, LLSR's revenues from System sales could easily exceed hundreds of million of dollars annually.
 

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