In a short period of time Traxxec has opened and delivered two operational sales channels, and continues to expand its market penetration. The new beauty client represents a potential new market sector which Traxxec is keen to exploit. CEO Amy Scopes comments, “The board is pleased that the company is now delivering revenue through two sales channels and looks forward to announcing completion of the final stage of the company development, along with positive sales stories. We believe that the company, along with key partner Rexam, is ideally placed to commercially deliver on the market potential of RFID packaging solutions.”
Sales Methodology
The customer will probably approach the purchase in a modular approach requiring a working demonstration at each phase. This will be followed by the purchase of a prototype run for evaluation according to preset acceptance criteria. The company will then be required to enter into a supply agreement that will be negotiated separately with each customer.
To support this sales cycle, expected to be 6-9 months, the company will also offer, at additional charge, the implementation of necessary RFID infrastructure (readers and software etc) and assistance with the preparation of a business case, incorporating the data from the prototype run.
Industry Market
More specifically, healthcare, including drug packaging, is identified as a segment with particular growth potential:
“A new industry study, forecasts that the U.S. market for RFID and related technologies in the hospital and healthcare sector will grow to $8.8 billion by 2010. The study says the market will be segmented into three general categories: RFID hardware and software integration ($1.3 billion), infrastructure support for RFID enablement ($2.7 billion) and hospital connectivity ($4.8 billion). ”
RFID & Emerging Technologies Guide to Healthcare, Apr. 26, 2005
As has been stated the market for RFID in healthcare is predicted to grow rapidly, much of this growth could be attributed to its ‘new market’ status and the associated low base, however the market size of $8.8 billion by the end of the decade is underpinned by continued growth in the pharmaceutical market itself.
The global pharmaceutical market grew by 9% in 2003 (IMS World Review 2004), with 11% growth in North America, (which accounts for 49% of the world market)
Bottle manufacturers are not considered direct competitors as searches have revealed little or no activity in RFID development from these players. In the longer term, dependent on market penetration of the tagged bottle of the total bottle market, they could come into play, however first to market status and the overall size of the market offer significant insulation from me-too competition. Traxxec Ltd has secured a license contract with one of the world’s leading players.
Opportunities
The company feels that the most efficient way to leverage this opportunity is to ensure ‘first to market’ status, establish a market share and continually stay one step ahead through evolution and innovation of the product concept.
The development of the product and its manufacturing process is now complete and ready for launch.
Field Summary
1. CRVR Traxxec’s technology has worldwide patent protection
2. Traxxec has undertaken through two pilot installations a feasibility study on product design and as a consequence of this work, supplied a fully commercial product for evaluation purposes to a client with an annual buying capacity of 20,000,000 bottles. Traxxec Ltd was incorporated specifically to exploit this IP commercially. Since its incorporation, Traxxec Ltd has also supplied commercial product for a live, current phase III study in the US. As part of the technology transfer to Rexam Pharma, commercial product was successfully manufactured by them and supported by systems software provided by Traxxec Ltd. To date 21,000 units have been delivered.
3. The result of the comprehensive testing led to the decision by Rexam to enter into licensing negotiation and complete the 15 year licence agreement. The market sector for pharmaceutical product is in excess of 20 billion US dollars and bottles represent 30% of the available market per annum.
4. Traxxec has commercial arrangements with Assa Abloy identification Technologies, a Swiss based global leader in the supply of packaged RFID component parts and with Telsonic Ultrasonics for current and further product development work.
5. With the global patent and the relationship with Rexam, its first licence contract, the company is ideally positioned to deliver this potential within this very lucrative market, with revenues from both product sales and system integrations as well as revenues form any further development products in line with its business model.
6. CRVR announces finalizing the purchase of Traxxec Ltd., December 27, 2007, and adoption of Traxxec’s business model specializing in the development of Radio Frequency Identification (RFID) products and their supportive systems and applications.
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