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Lifestream Technologies is now in over
15,000 retail outlets with its at-home cholesterol monitor
Lifestream Technologies, Inc.
510 Clearwater Loop Ste. 101
Post Falls, ID 83854
Chairman, President and
Chief Executive Officer
Interview conducted by:
Chairman of the Board, President and
Chief Executive Officer
Lifestream Technologies, Inc.
Christopher Maus, the Company founder,
brings significant experience in marketing and distribution leadership to early stage
companies in the consumer health and beauty industry. In the past, Mr. Maus
has managed the manufacturing and international sales for eight different products in a
medical industry niche market. A founder of Solaire Cosmetic Device Company, he grew
the Company to $12 million in sales in 18 months. The Company was later sold in a private
In addition to developing the Lifestream Cholesterol
Monitor and putting together a team of top development and management professionals, Mr.
Maus facilitated the raising of approximately $8.0 million for the formation and ongoing
capital requirements of the Company and has negotiated numerous contracts and agreements.
He was previously a member of the board of directors for Performance Coatings,
Inc., an INC. 500 Company; and one of the fastest growing privately held companies in the
United States. Mr. Maus attended North Texas State University.
Lifestream Technologies developed the first at-home cholesterol monitor. The
Companys product line aids the health conscious consumer in monitoring their risk of
heart disease. By regularly testing cholesterol at home, individuals can monitor the
benefits of their diet, exercise and/or drug therapy programs. Monitoring these benefits
can support the physician and the individuals efforts to improve compliance.
Lifestreams products also integrate a smart card reader further supporting
compliance by storing test results on an individuals personal health card for future
retrieval, trend analysis and assessment.
The Lifestream Cholesterol Monitor is an affordable,
hand-held device, which provides users with accurate results in less than three minutes.
The product line has been designed to accommodate The Data Concern smart card
allowing multiple users the ability to store their personal results. Lifestream's products
are now available in pharmacy and retail outlets nationwide. To find out which retailers
carry Lifestreams products, go to Store Locator at the Web site
www.knowitforlife.com. For more information, visit www.lifestreamtech.com.
The Lifestream Cholesterol Monitor: Provides total
cholesterol results in just 3 minutes, meets accuracy and precision standards of the
National Cholesterol Education Program (NCEP), requires no fasting, tests using a single
drop of blood from a finger stick and stores up to 200 dated test results using a Smart
Maus, please give us a brief history of Lifestream Technologies.
Lifestream Technologies was started in 1994, developing a home cholesterol monitor.
This type of technology has traditionally been used in the professional market, for the
purpose of testing patients to determine if their cholesterol was elevated enough to put
them on a therapy program. Lifestream felt that the monitoring side of diagnostics would
fulfill a niche in the consumer market and today we are in over 15,000 retail stores. We
just did three million dollars in the first three quarters of the fiscal year and we are
very close to cash flow positive.
most people using this at home as opposed to going for blood tests, and what would the
Mr. Maus: There are three different types of tests.
Screening - thats identifying people that dont know. The purpose
of screening is to direct them to a physician if necessary. The doctor does clinical
diagnostics, such as a lipid panel: good, bad cholesterol, triglycerides, glucose, etc.,
to determine whether there is a need for clinical intervention. In other words, they
decide whether to treat or not to treat. Once youre on a program, whether prescribed
by a physician or self-imposed through exercise or diet, the feedback, the behavioral
component, is by monitoring. If you take a weight-loss drug or you are going to do a
weight loss program, you have a bathroom scale that you can step on and determine whether
or not your program is working. The same thing happens with cholesterol.
Lifestreams cholesterol monitor allows the consumer to know if their
cholesterol-lowering regime, whether it be cholesterol-lowering drugs or diet and exercise
or both, is making a difference.
CEOCFOinterviews: Is it
a common practice to monitor cholesterol at home?
Mr. Maus: We are
the first product on the market for monitoring cholesterol at home, much like blood
pressure cuffs were in 1972. Last year, over seven million new blood pressure
devices were sold to consumers who want to test their blood pressure at home. Individuals
who monitor cholesterol, like those who monitor blood pressure, are monitoring their state
of health for the purpose of Health Management. The outcome is positive
reinforcement that supports behavioral change and compliance with drug therapies and
lifestyle changes. Studies indicate that frequent monitoring gives positive
reinforcement and supports lifestyle changes.
We have seen our customer base grow at double and
close to triple digits this past year alone. We see the format in which we supply
our solution as the driving factor. There are two types of testing devices on the
market today: one device uses a test strips and the other device is a single-use
disposable. Each product services the need of the consumer, but Lifestream believes
the market will follow the path of the blood pressure, tympanic thermometry and glucose
markets, specifically, instrument-based devices. This is something that
will develop over time, but the acceptance has been very positive.
CEOCFOinterviews: Do you
need to convince doctors or is it the public that you need to target?
Cholesterol is the number one health care awareness issue in the US. The
cholesterol-lowering drug category, now the largest drug category in history is expected
to reach $25 billion in revenue by 2005. Studies show that cholesterol is a contributing
factor to Alzheimers and dementia, because the plaque builds up in the small vessels
of the brain. We are seeing more and more push by the federal government. Why? The number
one cause of death in the United States is coronary heart disease, and the three major
components are smoking, blood pressure and elevated cholesterol levels. Hypertension is
pretty well under control; both monitoring and the drugs are well accepted and have been
used for years. They are trying to legislate smoking and tax smoking and make it socially
unacceptable. Cholesterol is really the only area left, so we feel theres a great
opportunity here. We think it has a very close correlation to hypertension.
Our products are purchased by people who (1) want to
know their cholesterol level or (2) are on doctor-recommended dietary and/or
exercise programs. The positive reinforcement these people receive from monitoring
assists them in staying compliance with their cholesterol reducing programs. While
it is beneficial for us to have the recommendation of the medical community, it is not a
necessity for our consumer at-home monitor.
Lifestream does have a professional cholesterol
monitor for use by healthcare professionals that has the same demonstrated accuracy and
precision of the at-home monitor, but also includes the Health Risk Assessment wherein the
healthcare professional can input fifteen other cardiac risk factors (e.g., gender, age,
weight, tobacco use, etc.) identified by the Framingham Study and ascertain the likely
overall cardiac condition of the patient. This monitor can be programmed for Adult
Care (includes the AHAs thresholds for total cholesterol in adults) or for Pediatric
Care (includes the AAPs lower thresholds for total cholesterol in children and
CEOCFOinterviews: How do
you get people to know about it and use it?
Mr. Maus: The way
we bring awareness to the product is through marketing, advertising and the media.
Cholesterol is a hot subject and probably the most written-about subject in healthcare.
Federal government initiatives, food companies, pharma companies, and health organizations
have consciously pushed an education program over the last fifteen years targeted at
bringing awareness to cholesterol. Our effort is not to build awareness of cholesterol but
to make people aware our product is available. Most people intuitively know when they have
something that is symptomatic and they are doing something to change that. This works to
our favor and we find that one of the major benefits is the educational level of the
general public regarding cholesterol. We are enhancing what they already know with our
are your marketing efforts?
Mr. Maus: Our
focus is radio, print and television. Right now, our primary focus in advertising is co-op
advertising with the retailers who have purchased our products, including national chains
such as CVS; Eckerd Drugs; Albertsons, Inc., including Sav-on Drugs, Osco Drug,
Albertsons-Osco, and Albertsons-Sav-on; Rite Aid Corporation and Longs Drug Stores.
We do anticipate moving into an aggressive radio campaign in the near future to facilitate
an awareness campaign. Eventually, well go into television. Print is not the most
advantageous for us at the moment, but we do expect that to come into play as well.
disposables play a big part for Lifestream?
Lifestreams monitors sell for $99.95 to $129.95 (MSRP). A package
of six test packets sells for $19.95. Test packets are an intricate part of our
sales strategy, because of the recurring revenue. Currently, studies are being done
to look at determining how often a person should test for compliance, in other words, how
often should a person test to know whether or not their lifestyle changes and/or drug
therapies are working. The outcome of these tests could be beneficial for Lifestream
because a test packet is required for every test.
this reimbursable and is that important to move product?
Mr. Maus: No, not
at this time. I dont think that you will see insurance company reimbursement
in the near future. Last year, there were seven million blood pressure cuffs sold to
consumers without any reimbursement. We think cholesterol will follow that
product is the first to market, are there others on your heels?
Competition can be broken down into two groups: products using equivocal, single-use
cholesterol tests (non-instrument) primarily used for screening, and products using a
quantitative instrument and disposable strip. ChemTrak, Inc., sells a single-use
disposable screening test offering test results in 15 minutes. The test uses
color-metric readings, which are difficult to interpret and produce imprecise results.
Lifestream sells multiple use monitors (suggested retail price of between $99 and
$129) and six test strips for ($19.95). Lifestreams monitors are considerably more
affordable and offer the only instrument-based product with the capability of storing
cholesterol test data, combined with other lifestyle data, to analyze the risk for stroke
and cardiac disease. No product on the market today has the capability of downloading
stored results from a home diagnostic unit via a smart card to the Internet. As Lifestream
is the first to market with a cholesterol monitor, it is not unreasonable to expect that
the Company will have a commanding lead and essentially dominate the market. In addition,
the Company believes that the retailers are supportive of Lifestreams product line
as the gross margins afforded retailers are in excess of the typical margins of other
consumer healthcare products.
retail your only sales channel?
Mr. Maus: We go
through a number of channels. We see our product as a health management product. You will
see our product in catalogs. Although they are not our primary business, they do
help build awareness. Primarily, we are at the drugstores, mass merchants and, eventually,
we expect to be in the wholesale clubs. The pharmacy is where the drug is being
prescribed. Last year, the cholesterol-lowering drug category was the largest
category in history. Lipitor is the largest drug ever, and probably the first drug
in history to ever generate ten billion dollars a year. We believe the pharmacy is the
most natural place for selling our product. When it is all said and done, 90% of our
business will go through stores that have a pharmacy.
CEOCFOinterviews: How do
you manufacture your product?
Lifestream is a design, engineering, marketing and sales company. The
production of our monitors is contracted out. Currently, we are partnered with Sanmina-SCI
(NASDAQ: SANM, a leading international electronics OEM) and Servatron, Inc., of Spokane,
WA, to manufacture the cholesterol monitoring devices. Lifestream and SCI have
recently implemented new cost saving processes that have significantly improved margins,
benefiting Lifestreams bottom line.
We also have an exclusive license and supply contract
with Roche Diagnostics to provide dry chemistry test strips and calibration keys required
for the cholesterol monitors. We package the test strip packets, in addition to
receiving and shipping product, at our corporate headquarters in Post Falls, Idaho.
is the financial situation for the company?
Mr. Maus: The
company has, over the last four quarters, moved from a negative three million in revenue
to a negative two, negative one, and down to a negative three hundred thousand, which
means that we are moving very rapidly to cash flow positive. We have very strong margins.
A cost reduction implemented in October gave us a very aggressive shift in our
gross margins, coming up almost 900% over the last six months. Our cash position is quite
low right now. Management has been pleased with the acceptance of the marketplace
and sell through is good. We do need additional cash for operating capital and
marketing, and to manage this growth.
closing, what would you like to say to shareholders and potential investors?
Mr. Maus: We
are moving from a development stage company to an operating company, shifting from just
burning cash and developing the company to the point of bringing in revenue. If
people look at the numbers and what makes the numbers improve
expense is down, revenue is up and our margins are up
those are all good signs. We
think that money will follow that basic model for success within our business.
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