Media focus gives boost to BioAnalogics revenues.

Media focus gives boost to BioAnalogics revenues

Little did Dr. Albert Libke know when his Brentwood-based medical supply company introduced its latest product earlier this year that the national media would help sell it. Now he sees the revenues of his fledgling company spurting after a self-induced slump.

Libke, founder and chief executive officer of BioAnalogics Inc., says his new high-tech blood pressure measuring system has "achieved a true synergy" with the company's first product, a bio-electrical measurer of obesity. And, he admits, sales of both products are being helped by recent articles about blood pressure monitoring in a major medical journal and a nationally circulated newspaper.

In early January BioAnalogics introduced a product called the Ambulatory Blood Pressure Monitor. The device, which consists of a computer-programmed, pagersized monitor connected to a blood pressure cuff, takes patient measurements over a 24-hour period.

The monitor's release came at the close of the first quarter of the company's fiscal 1989. During that quarter, sales, which had increased 460 percent between fiscal 1987 and fiscal 1988, dropped by nearly half from the same quarter of the previous year; the net loss per common share nearly tripled from the same period.

The drop was predictable, Libke says, because the company underwent some fundamental changes during that period. "Going from infancy to adolescence sort of describes the stage we're in now," he says. But that maturing process got a major boost about a month after the monitor first was offered for sale.

In its Feb. 10 issue, the prestigious Chicago-based Journal of the American Medical Association carried an article critical of results gathered by the typical blood pressure testing done in physicians' offices. The article claimed that testing done over time, outside the pressures of a medical office, produces more accurate results. That is exactly what BioAnalogic's product does.

The criticism got even wider play when USA Today simultaneously ran a front page article recapitulating the AMA article. Although release of BioAnalogic's monitor and the spate of publicity occurred coincidently, Libke says "obviously we felt our timing was good there."

Weeks before the release of the monitor, BioAnalogics, which specializes in computerized and bio-electrical diagnostic products for the professional health care market, issued figures showing net sales increased from $571,000 in fiscal 1987 to $2.6 million in fiscal 1988. But, despite that rise, the company suffered a net loss of $1.4 million.

Libke says the net loss was predictable for a start-up company just becoming established in its industry. And, he adds, the positive outcome of the company's initial public offering of 1.35 million shares of stock last October set the company on an expansion track.

BioAnalogics, which went public at $3 a share last October, was trading and $2 3/8 bid, $2 3/4 ask on Wednesday last week.

The offering, which netted the company about $4 million, "gave us the chance to sit back and determine what our goals were," Libke says. Accomplishing the first goal, switching from a distributor-based marketing system to a direct sales force, accounted for the precipitous sales decline in the first quarter 1989 figures, he notes.

"You accept a short decrease in sales and trade that off for a real asset -- a dedicated sales force," Libke claims.

Getting the new sales staff and achieving two other goals, updating its obesity analysis system and releasing the blood pressure monitor, resulted in January sales exceeding those for the entire first quarter of this year. And a preliminary study of February sales figures shows "it appears that trend is continuing," Libke says.

And combining the blood pressure monitor with the obesity analyzer has transformed two separate medical machines into a sophisticated system that is easily marketable, he adds. "It appears to be easier to sell a $13,000 system than either product at $7,000," he claims. "That is very good for us in sales call productivity...our revenues per sales call are going to increase significantly."

Charles E. Hilton Jr., a broker at the Rancho Santa Fe office of Shearson Lehman Hutton Inc., says BioAnalogics "may be a company to keep an eye on."

Hilton, whose job includes studying small companies, recently was tested on the obesity analyzer. "Most of the people I have shown the test results to are pretty impressed," he says.

Hilton says that during his visit to BioAnalogics' headquarters, "I was impressed with what I could see." He says the company's marketing efforts and direct sales force were of specific interest to him.

"For a company this size to have a dedicated sales force is an interesting idea," he says. "It certainly suggests they're not being distracted by other products. When they got there they apparently had some immediate affect on sales."

Libke notes that BioAnalogics recently signed a contract with the Diet Centers Inc. chain to be its exclusive provider of analysis equipment. The Idaho-based chain has 2,200 outlets, although it is not known how many will purchase the BioAnalogics products, he says.

The company also is about to release a new line of medical risk analysis software designed to be compatible with the obesity and blood pressure systems, Libke adds.

With that product, Libke notes, physicians can tell patients how non-controllable factors, such as genetics, and lifestyle factors, such as stress, add to their obesity and blood pressure levels to affect their health.