Fastest-Growing Public Companies 2005 to 2008

Orange County Business Journal, Oct 20-Oct 26, 2008

NO. 1

AMDL INC.

VITA REED

THE NUMBERS

Three-year growth: 26,373%

12-month sales through June: $20.5 million

Yearly loss: $104,000

Recent market value: $25 million

Employees: 311, seven in OC

Company: diagnostic tests, drugs, nutritional supplements, cosmetic products

Selling drugs and other products in China has delivered growth for AMDL Inc.

The Tustin-based maker of drugs and medical testing products tops the Business Journal's 2008 list of the fastest-growing public companies in Orange County.

AMDL's sales have grown 26,373% in the three years through June 30.

Our list ranks companies by three-year revenue growth, comparing the 12 months through June 30 versus the same period in 2005.

AMDL has gone from sales of $77,588 in the 2005 period to $20.5 million for the 12 months through June.

It is up from No. 4 on last year's list.

The company makes drug and testing products. Customers include stores, hospitals, doctors, clinics and medical laboratories.

A 2006 move into China has fueled AMDL's growth, according to Chief Executive Gary Dreher.

The company got into China by spending $9.1 million two years ago to buy a pair of drug companies from Hong Kong's Jade Capital Group Ltd.

AMDL's Jade unit makes fluids, tablets and related products and has licenses for more than 130 products, according to the company.

Part of the plan has been to sell more products through Jade's own stores, which are called Jade's Healthy Supermarkets.

The company also signed a couple of deals this year with two more Chinese drug distribu- tors, Guangzhou Lazon Pharmacy Co. and Sichuan ZhiTong Pharmaceutical Ltd.

A line of anti-aging skin care products introduced in May and a medication to prevent vomiting have helped drive sales, Dreher said.

In July, AMDL received Food and Drug Administration approval for its DR-70 noninvasive cancer blood test, which is used to detect lung, breast, stomach, liver, colon, rectal and other types of cancer.

The company "is pursuing a large, international diagnostic company and national reference laboratories for either licensing or distribution for DR-70," Dreher said during AMDL's second-quarter results call in August.

AMDL is looking at companies that distribute a test that detects an antigen produced by colorectal cancer cells and that is the closest competing technology to DR-70, Dreher said.

The company hopes to secure a strategic distributor within three months and has submitted the test for Medicare reimbursement approval, according to Dreher.

AMDL expects to start marketing and selling DR-70 internationally by the middle of next year, according to the company.

The test could spur further growth at AMDL. The company cites numbers from Kalorama Information, a suburban Washington, D.C.-based market researcher, showing that the global market for in-vitro diagnostic tests for cancer is growing nearly 11 % annually and could reach $8 billion by the end of 2012.

Challenges

AMDL faces challenges.

Like many smaller companies on our list, AMDL isn't consistently profitable.

It posted a narrowed second-quarter net loss of $429,567, down from a loss of $2.3 million a year earlier, and a loss of $104,000 for the 12 months through June. It has had a running deficit of about $39 million since its 1989 start.

The company had about $1.6 million in cash on hand as of June 30 and said in its recent conference call that its cash is being depleted at the rate of $425,000 a month.

AMDL said in its filing that it is working on potential deals that could provide its U.S. and Chinese operations with up to $14 million in financing.

Earlier this year, AMDL said it expected to have the "going concern" warning taken off its financial statements because of the China operations and other recently announced events, including the Chinese drug distributor deals and a licensed diagnostic test for the human papilloma virus, which causes genital warts, Dreher said.

AMDL's shares, which trade on the American Stock Exchange, have lost about 50% of their value for the year as of early October, giving them a recent market value of $25 million.

In September, the company's shares saw unusually high trading - 1.2 million shares traded on Sept. 15, up from an average of about 250,000 for most of the year.

That led AMDL to issue a press release it said was triggered by investor inquiries.

AMDL didn't directly address the trading. Instead, it reaffirmed previous full-year revenue guidance of $30 million to $38.7 million and said it expects to have $13 million in revenue for the third quarter.

The company also has said it expects to post a profit after taxes of $8.5 million to $11.2 million, including foreign currency adjustments, for the year. That forecast, AMDL said, doesn't include potential revenue from DR-70.

No analysts follow the company.

AMDL has other things in the works besides its Chinese operations and DR-70.

The company also is seeking a large drug maker to either partner with or license its combination immunogene therapy technology, which works to build up the body's immune system and destroy cancer cells.