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ImmuCell Corporation – profitable and able to bring products quicker to market with their focus now on the
dairy and beef industries


Biotechnology & Drugs

ImmuCell Corporation

56 Evergreen Drive
Portland, M.E. 04103
Phone: 207-878-2770

Michael F. Brigham
President and
Chief Executive Officer

Interview conducted by:
Walter Banks

January 2002

Bio of CEO,
Michael F. Brigham (Age: 40, Officer Since: October 1991, Director Since: March 1999) was appointed to serve as President and Chief Executive Officer in February 2000 while maintaining the titles of Treasurer and Secretary, and was appointed to serve as a Director of the Company in March 1999.  He previously had been elected Vice President of the Company in December 1998 and served as Chief Financial Officer since October 1991.   Prior to that, he served as Director of Finance and Administration since originally joining the Company in September 1989.  He has served as Secretary since December 1995 and as Treasurer since October 1991.  Mr. Brigham serves on the Board of Directors of the Biotechnology Association of Maine and The Maine Center for Innovation in Biotechnology.  Prior to joining the Company, he was employed as an audit manager for the public accounting firm of Ernst & Young.  Mr. Brigham earned his masters in Business Administration from New York University in 1989.

ImmuCell Corporation,

ImmuCell Corporation (NASDAQ/ICCC), headquartered in Portland, Maine, is dedicated to developing and marketing products that improve animal health and productivity in the dairy and beef industries. Their product focus encompasses prevention, diagnosis and treatment of bovine diseases.

ImmuCell continues to be on the forefront of calf scours (diarrhea) prevention technology, manufacturing and marketing First Defense®, the most popular and convenient scours prevention administered to neonatal calves. The first 24 hours of a calf’s life are critical for antibody absorption. Calf scours (diarrhea) is one of the most common and costly diseases in calves, resulting from lack of sufficient disease protection from mother’s colostrum. First Defense is the only U.S.D.A. approved scours preventative administered to calves with indications for E. coli and Coronavirus.

ImmuCell is currently leveraging strengths in enteric disease and reproductive efficiency products to develop other products for herd health. A major concentration is in the area of mastitis management. ImmuCell’s new Intelligent Mastitis Management™ program incorporates innovative products, along with some widely accepted testing tools, to help minimize the effects of mastitis.

Wipe Out®
Wipe Out Dairy Wipes, containing the natural antimicrobial Nisin, were evaluated in testing procedures consistent with the protocols recommended by the National Mastitis Council. These data demonstrated that Wipe Out is proven to be effective in killing bacteria on teats, reducing new intramammary infections and maintaining teat condition. The use of an antimicrobial to clean and sanitize the teat area before and after milking is an accepted practice proven to reduce the incidence of mastitis in cows. Mastitis can be effectively controlled by killing two of the main pathogens that cause it — Staphylococcus aureus (S. aureus) and Streptococcus agalactiae (S. agalactiae) — by using a pre- and post-dip that destroys these organisms.

Mast Out™
Mast Out, which is currently under development, will be an intramammary infusion product for lactating and dry cow therapy that will have the active ingredient Nisin, a natural antimicrobial protein. Mast Out has the potential to revolutionize mastitis treatment by dramatically shortening milk withdrawal time and decreasing risk from antibiotic residues. Mast Out will be a cornerstone of our Intelligent Mastitis Management™ product line. This is a long-term project.

The CMT (California Mastitis Test) is a rapid cow-side test for early detection of mastitis, and for years has been a trusted tool of dairy producers. The new ImmuCell Brand CMT offers the same ease-of-use and accuracy as other brands, with 50% more tests per kit at the same price.

CEOCFOinterviews: Mr. Brigham, please give us a brief history of ImmuCell?

Mr. Brigham: Immucell went public back in 1987, but I think more relevant to investors today is what we have been doing since 1999.  That was the year that we changed our focus, strategy and mission to really concentrate on the dairy and beef industries.  For the last two and a half years, we have had a tight focus on developing and acquiring products for the dairy and beef industries.  Along with that came the ability to go from a company that used to lose money to a profitable company.  We turned away from developing human applications of our core technologies that were subject to long and expensive FDA trials to relatively quicker product licensure efforts with the USDA on animal health products. If we can find products through internal development or through acquisitions that could diagnose, treat or prevent disease that are important to dairy and beef industries, we would do that and market them directly ourselves.  We have been profitable since the change in strategy and we have grown our revenues 19% for the third quarter of 2001 and 15% year to date.  We will set out to maximize that profitability, however there is still work to be done in research and development at the present, but we are confident that we can grow our profits in years to come.

CEOCFOinterviews: What would you say is your most recent and exciting news?

Mr. Brigham: We have a product called Wipe Out®, which are moistened towelettes that the dairy producers use to clean and sanitize the cows’ udder before milking.  These wipes are impregnated with an anti-microbial protein called Nisin.  We’ve been selling this product since we acquired it in 1999.  We also have rights to sell that product into another field, the environmental sanitization and the skin sanitization fields.  With the serious concern about Anthrax and Bio-terrorism, we recently picked up a lot of press here about these environmental and skin sanitizing rights.  Because Nisin is a very broad-spectrum protein, it does have a wide coverage. However, it has not yet been shown to be effective against the agent of Anthrax.  The biggest thing for ImmuCell to do is to take another application of Nisin and prevent mastitis with this active ingredient.   We are developing a product called Mast Out™, which is for treating the mastitis and that is our biggest effort right now. Of course, this is all subject to FDA approval, and out there for the 2004-2005 time frame. 

CEOCFOinterviews: Wipe Out is a product that is used for animals.  Is it approved for humans?

Mr. Brigham: As long as we don’t make specific disease claims, we would not have to do FDA clinical trials. However, we can make references to literature and there is a lot of literature out there on the active ingredient Nisin.  Furthermore, Nisin is used extensively as a food preservative, so there is a history of safety in humans. 

CEOCFOinterviews: What separates your products from the other sanitizers out there on the market?

Mr. Brigham: It is a very competitive product category.  Dairy producers are required to sanitize the teat before milking, that is just part of good milking practice.  There are a lot of products out there for this purpose but they are all harsh chemicals, such as iodine, Chlorhexidine or chlorine. Wipe Out® is the only product that contains a natural anti-microbial protein.  We sell it based on its environmentally friendly and gentle-on-the-udder characteristics, which at the same time has its very active properties.  Just to give you an idea of what I mean by the safety, there is another field of use that has nothing to do with ImmuCell but has been around for a long time. Nisin is a very common food preservative, we eat Nisin quite often in cheese spreads and a lot of other processed foods; it’s a common and safe preservative.  We make Nisin by a fermentation process.

CEOCFOinterviews: Is your sole focus on the animal market?

Mr. Brigham: Everything we do is for use with animals.  We do have some old technologies from old assets, if you will, in the human area but for those to be further developed they have to be picked up by partners.  The products we’re working on are for animal use in the dairy and beef industries. 

CEOCFOinterviews: Are your products being sold worldwide or strictly in the U.S.?

Mr. Brigham: It's a mix.  About 25% of our sales are foreign but most of our sales are right here in the U.S. and Canada.  We work through the vet channel; their products come in through all different levels of the distribution channels.  We work with the veterinarian wholesalers, who then take the product to the vet and the vet takes the product to the producer.  We sell a product such as Wipe Out directly to the producer simply because it is a heavy liquid product and very expensive to ship.  The small producers in this industry are getting bigger and the small guys that don't get bigger go out of business.  With the high demand for cheese and milk products, there is a great need for our products.  What we like about this business is that it is not so huge, and therefore it doesn't seem to attract a lot of competitors.  It's a nice market for us to target and specialize in.  It’s attractive to us because the consumption of milk is not going away.

CEOCFOinterviews: What do you need to do to build out your business?

Mr. Brigham: The market can be measured in a lot of different ways.  With our lead product First Defense®, we are clearly a leader in this category.  To keep it in perspective, our top two products make up about 90% of our sales.  Our total sales are just about 6 million dollars.  Within the scours market, which is diarrhea in the dairy farm, we are the market leader.  First Defense® is the best product out there that is Bovine Coronavirus Escherichia Coli Antibody (Bovine Origin), which aids in the reduction of mortality and morbidity when administered to neonatal calves. First Defense is the best defense against calf scours. Other products don't have that two-pathogen claim. Other products need refrigeration or mixing, ours is a room temp product for easy oral dosing.  First Defense® is our flagship product, a lot of dairy producers know us because they know First Defense.  The key for us to grow is to build on our reputation with new products such as the few new products we have acquired lately and the few new diagnostics that we have just gotten regulatory approval on. 

CEOCFOinterviews: Is it correct to assume that you can take your new products and market them to your current customers?

Mr. Brigham: That is absolutely true, and also it helps us greatly in marketing where it is very hard to get a distributors attention with one product.  With multiple products, particularly Mast Out, when we get the FDA approval, it will be easier to get distributors’ attention.  It is more efficient to work with the media where we can do a little cross marketing and promote these different products to our different customers.

CEOCFOinterviews: What does your competition look like in the dairy and beef industries?

Mr. Brigham: There is a bit less competition than in some higher value markets, such as companion animals, (dogs and cats).  That's just a whole different world.  We would not even try to get into that kind of market where the competition is so huge.  However, there are quite a few players in the dairy and beef industries, but we win based on good value and that means a good product at a good and fair price. 

CEOCFOinterviews: In the future, will the average consumer be able to go and purchase Wipe Out from a local drugstore chain?

Mr. Brigham: I don't have the answer to that question right now. Presently we are selling Wipe Out to dairy producers.  It's a very cost effective product.  We don't have to sell to dairy producers but anyone could order it.  Where this environmental and skin sanitizing application of the product goes is really uncharted territory for us right now.  We clearly do not have a marketing presence in that kind of consumer healthcare area, so it is a potential area for a partner to come in and help us and it is our hope that we could work with the military in this area. 

CEOCFOinterviews: What kind of companies would you be looking for to partner with?

Mr. Brigham: My first choice would be the military, a very straight forward and simple collaboration, where they could figure out very quickly if this product was of interest to them, and if it would help them, we would ramp up production and get things in motion very quickly.

CEOCFOinterviews: Which of your products do you think have the best market value and could produce the most revenue for the future.

Mr. Brigham: I think that clearly, Mast Out™ has the best market value, although it is the one that is furthest out for us because it is subject to FDA approval, and we have only been working on this product since April 2000.  Mast Out™ if approved with the kind of efficacy claims that were hoping to get, would be the first product on the market in a very busy area.  It would differentiate itself from the others in that it is not an antibiotic.  Every treatment for mastitis and every intramammary infusion out there is an antibiotic.  We really like the safe and environmentally friendly and the non-antibiotic resistance characteristics.  We have some work to do to get that through the FDA.  Right now First Defense is the leader, but Mast Out would make First Defense an important but a secondary product.  We see the current mastitis treatment market in North America to be $20 million and the market outside is about that as well.  Put that in context of our current sales being around $6 million in total sales. 

CEOCFOinterviews: Could Mast Out™ double your sales when it gets going?

Mr. Brigham: Mast Out™ has the kind of potential to double our sales and has a big up side for us.  There are a lot of little things we will be doing along the way, different diagnostics and different products are coming along but they would be incremental steps and could be quite a nice and big success story on its own. 

CEOCFOinterviews: What is your current cash and credit position to continue building out your business?

Mr. Brigham: I think the thing that makes us different is the absolute numbers are very small.  However, the per share numbers can be attractive and all these numbers on a per share basis can be more interesting than in an absolute sense. What I mean by that is we currently have only about 2.8 million shares outstanding so a little bit of profit can get a good earnings per share. We have just completed some fairly significant capital investments around the facilities with an addition to accommodate increased production of First Defense, and the in-house production of Wipe Out and the associated equipment. Therefore, having made those investments in the first nine months of the year, having started in the fourth quarter of last year, our cash is down to 1.4 million as of September 30, 2001, but we are very cash-flow positive being profitable.  We have more cash than we need and we are trying to put that cash to use so investing in First Defense was an easy decision.  We have 1.4 million in cash, and I'm giving you September 30 numbers, 5.8 million in equity and 2.8 million shares outstanding.

CEOCFOinterviews: Do you see any acquisitions on the horizon?

Mr. Brigham: We are always looking and hope to be opportunistic but nothing specific at this point.  We have acquired two products over the last two years, and we would like to buy more. Furthermore, if a product has a good utility to the dairy and beef industry, we are definitely interested.  We think we can be successful there because a lot of companies are shedding off the bovine products, as they pursue maybe the human or small animal applications.  We find from time to time that the dairy and beef product is available and where we can find it, we put in an effort to buy that product.

CEOCFOinterviews: What would you like to say to current investors and shareholders?

Mr. Brigham: We would certainly appreciate anyone taking a look at the company.  We are lightly followed and that doesn't give us an Analyst, therefore it's basically a retail stock.  We have some crazy weeks such as last week when we traded 375,000 shares in one day, but typically we trade about 10,000 shares a day.  I think it is very hard to come in and out of the stock with volume like that.  I do think it's more of a longer-term investment but the down side is pretty well protected.  We have an operating and powerful core business, and if we can make any of these up sides come through, then that is where I hope to get my return along with the rest of the shareholders.

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