On December 20th, 2012, PositiveID Corporation (PSID) announced they have teamed up with The Boeing Company for a licensing agreement that could lead to big profits for both companies. The Boeing Company will manufacture and sell PositiveID’s M-BAND bio-threat detection devices in North America, while PositiveID secures reoccurring revenue streams by retaining the rights to sell the reagents and assays for the devices.
What is Bio Watch 3?
Bio Watch Generation 3, a program being procured by Homeland security and estimated to cost $3 billion, involves the deployment and testing of an estimated 2,500 M-BAND units as part of the Department of Homeland Security’s Bio Watch Generation 3 program, set to roll out over the next five to six years.
The Power of M-BAND
Appropriately called a “lab in a box”, PositiveID Corporation’s M-BAND bio-threat detection devices take up about as much space as a modern industrial fridge. Developed under contract for the Department of Homeland Security Science and Technology Division, M-BAND is a bio aerosol monitor designed to perform sample collection, data processing and detection, continuously analyzing air samples for a range of certain airborne pathogens such as bacteria, viruses and toxins. Since resulting data from individual M-BAND machines gets communicated in real time via a secure wireless network, this system promises to provide accurate and current information to connected field instruments. When operated as an integrated system, an M-BAND network becomes a solid warning system and the foundation of the Bio Watch 3 program.
The current system for analyzing and detecting potential bio-threats requires at least 36 hours and sometimes more before a threat can be identified. The M-BAND system can go from detection to alert in 4 to 6 hours, dramatically faster.
The Agreement Explained
The licensing agreements and teaming agreements between these two companies specifies that The Boeing Company will have the exclusive right to manufacture, market and sell the M-BAND threat detection devices in North America to the United States government specifically for use in the Bio Watch 3 program. PositiveID Corporation will retain the rights to be the exclusive provider of all reagents and assays for all M-BAND units sold by Boeing, as well as international rights.
The Boeing Company is the world’s largest and most versatile manufacturer of military aircraft, and their unit called Boeing Defense, Space & Security claims a title of equal importance as the world’s largest defense, space and security businesses. A partnership with a company as large and successful as Boeing can only spell success for an emerging medical technology company like PositiveID Corporation.
How will License agreement affect PositiveID?
Chairman and CEO of PositiveID, William J. Caragol explained the true importance of PositiveID Corporation’s agreement with Fortune 50 company Boeing in a recent interview. “Think of it as the razor blade, with the M-BAND being the razor, model.” He says that the reagent and assay business is important to them because by retaining the right to provide reagents and assays, which will be needed on a monthly basis, PositiveID has strategically secured a solid reoccurring revenue stream in a market estimated to generate 90-120 million in annual revenue with 10-15% margins.
Based on the schedule released by the Department of Homeland Security, the first stage of Bio Watch Generation 3 includes initial pilots and testing of M-BAND units and is scheduled to be procured by 2013.
In addition to retaining the right to sell reagents and assays, PositiveID also still retains the right to sell the M-BAND systems, reagents and assays internationally. When recently asked about the realistic potential for an international market, Caragol reported that PositiveID has “actually taken some inbound inquiries … both from Europe, as well as from the Middle East, allies of the US inquiring about the ability to use the systems and implement the systems … for the very same homeland protection that the US is looking to do.” He claims that as the Bio Watch 3 program gains recognition as a successful project, international buyers will begin showing strong interest in implementing these same systems in their areas.
PositiveID Pursues Opportunities with SAIC
CEO Caragol claims that PositiveID’s agreements with Boeing leave PositiveID free to pursue other opportunities in the defense arena as well, such as defense threat reduction agency contracts. In November 2011, PositiveID announced a teaming agreement with Science Applications International Corporation (SAIC) to pursue opportunities with the Defense Treat Reduction Agency (DTRA). With these recent contracts and teaming agreements, PositiveID Corporation seems to have paved the way for outstanding success in 2013.
In addition to bio-threat detection technology, PositiveID’s HealthID division is focused on providing health solutions for consumers, businesses and animals, such as blood glucose monitoring, rapid virus detection, and various other products aiding diabetes management. Products announced so far include iglucose, Easy Check and GlucoChip.