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TWST: Can we begin with a brief historical sketch and introduction to Provalis (London:PRO.L; NasdaqNM:PVLS)?

Dr. Gould: Provalis is a healthcare company located in the Northwest of the UK, listed on the London Market and listed on NASDAQ. It’s got two divisions: pharmaceuticals - largely pharmaceutical sales, and that division operates in Europe; and the medical diagnostics division, which operates worldwide. The medical diagnostics division is a fully integrated business from research, development, design, assembly, manufacture and we sell ourselves in the UK market and we sell in other markets via a series of distributors.

TWST: What are your main products?

Dr. Gould: In the pharmaceutical sales business, our lead product is a product called Diclomax which is a once a day formulation of diclofenac, which we bought from Pfizer at the end of 2001. It was originally a product from Park-Davis (Warner Lambert} and obviously became available when Pfizer took over Warner Lambert. That product sells in the UK market about £7 million and collectively this year the analysts are forecasting the pharmaceuticals sales business, with our other products, will turnover around about £11 million in the UK. In our medical diagnostics business, which I mentioned was global, we have a product called Glycosal® which is a diabetes diagnostic product, which we sell ourselves in the UK market, but in the key US market we sell through two partners: Bio-Rad Laboratories, a large multinational in diagnostics; and Cholestech, who are very focused on point-of-care in the USA. The Bio-Rad product is branded as the Micromat II, and with Cholestech it’s branded as the GDX product.

TWST: Can you take us through the last 12 months at Provalis and touch on the milestones and key developments that have taken place?

Dr. Gould: We just reported our half-year results in the early part of March and in those results we showed that our sales had grown by over 90% to just over £7 million (about 10 million) in the half year. Our loss had reduced substantially to £1.2 million and the business is now breakeven pre-R&D and our ongoing business going forward is now EBITDA positive for the first time. In terms of the products within that, what had really led that growth was the sales of Diclomax in the UK, which we had maintained at levels achieved by Pfizer, and also the major contribution for the first time of our diabetes diagnostic product, Glycosal, really leading from its penetration in the US market where Cholastech and Bio-Rad had made sales. In particular, Cholestech had developed an early agreement with Abbott Laboratories and that really gave us a kick start in getting the product established in the US market. So, the big milestones for us was to get critical mass in the healthcare business and to really get the US sales of Glycosal going, both of which have begun to be achieved.

TWST: Can you tell us a little more about Glycosal and the market opportunities for that product?

Dr. Gould: Yes, we’re very excited by the product and its progress in the US, and we’ve begun to look at the potential market size there. Now that we’ve got, frankly, every approval or registration that we need, both FDA and something called NGSP, we feel the product really is opened up to every healthcare professional in the US. But, specifically looking at it in terms of numbers, there are just over a 100,000 doctors’ office type opportunities in the US for Glycosal, and we frankly feel that we’re only really scratching at the very surface of that at the moment. To illustrate this, to the end of this financial year, which is a couple months time in June, we think in total we’ll only ship about 7,500 units to the market. So there’s a fair amount to go even in the US market alone. From then in we should be able to build cartridge sales; each cartridge being a single test and each diabetic patient is usually tested at least four times a year. With so many diabetes patients in the USA – estimated to be 7-8% of the population- it begins to build up some steam in terms of getting cartridge pull, then volume demand, and then sales return from that business.