Profile: IRIS International (IRIS.O)

IRIS International, Inc., incorporated in 1979, designs, develops, manufactures and markets in vitro diagnostic (IVD) products, including IVD imaging systems based on neural network-based automated particle recognition (APR) software to enable high-speed digital processing to classify and display images and describe the morphology of microscopic particles, urine chemistry analyzer and related chemistry test strips and accessories, molecular diagnostics assays based on its nucleic acid detection immuno-assay (NADiA) technology, as well as special purpose centrifuges and other small instruments for automating microscopic procedures and deoxyribonucleic acid (DNA) processing performed in clinical laboratories. Its commercialized products and product pipeline comprise three categories: morphology, molecular diagnostics and sample processing.

Morphology and Related Products

The Company’s morphology category includes all urinalysis and hematology products consisting of the Company’s commercialized urine chemistry and microscopy products, as well as its development-stage products, such as an automated urine bacteria screening instrument and 3GEMS hematology and urinalysis analyzers. The Company’s principal product is the family of iQ urine microscopy analyzers. As of December 31, 2008, it has sold over 2,150 iQ analyzers. IRIS International, Inc.’s iQ technology platform utilizes image flow cytometry and software to achieve reductions in cost and processing time as compared to manual urine microscopy. The Company markets its fully-automated urine chemistry analyzers and distributes fully automated urine chemistry analyzers domestically that were developed by ARKRAY, a Japanese IVD company.

IRIS International, Inc. generates revenue from the sale of consumables and service contracts for its urine microscopy and urine chemistry analyzers. During the year ended December 31, 2008, revenue derived from consumables and service contracts accounted for 49% of its total consolidated revenues and 57% of its diagnostics business unit’s revenue. Consumables include urine and body fluids reagents, calibrators and controls for its microscopy systems and test strips, calibrators, controls, and other solutions for the urine chemistry analyzers it manufacture and distribute. The Company offers annual service contracts for its domestic customers after the initial year of sale, which is covered by product warranty. On an international basis, it offers spare parts to its distributors who in turn service the end-use customer. Its isolation separation technology that binds antibody-coated albumin micro-bubbles to target cells, isolating any bacteria present in the urine and concentrating the particles for identification. The Company’s 3GEMS platform combines its core imaging technology with software and sample processing to enhance the identification of various cell types and particles found in urine, blood and other body fluids.

Molecular Diagnostics

The Company’s molecular diagnostics category consists of its development-stage products that utilize its NADiA technology for ultra-sensitive detection of proteins in low concentrations below the detection thresholds of current immunoassay and molecular diagnostic methods.

Its molecular diagnostics pipeline includes the products under development prostrate specific antigen (PSA) is a cancer marker used for the diagnosis and clinical management of prostate cancer in men. The Company is developing an ultra-sensitive, blood-based diagnostic test that utilizes NADiA ProsVue technology to monitor levels of PSA in men with prostate cancer, who have undergone radical prostatectomy, or removal of the prostate gland. In February 2008, it announced the completion of a retrospective study of stored leftover serum of 85 men with prostate cancer, who had undergone a prostatectomy using its NADiA ProsVue. In this study, the NADiA ProsVue Assay detected levels and increasing levels of PSA that were previously undetectable using conventional ultra sensitive assays, thus potentially enabling detection of biochemical recurrence (BCR) an average 2.5 years earlier than with the sensitive commercially available PSA assays.

The Company is developing a blood-based human immunodeficiency virus (HIV) viral load test utilizing NADiA technology. Her-2/neu is a validated cancer marker used as a prognostic indicator of the aggressiveness of a breast cancer tumor and a guide for appropriate treatment. It is developing a blood-based diagnostic test utilizing NADiA technology to identify and quantify the levels of Her-2/neu in women with breast cancer.

Sample Processing

IRIS International, Inc.’s sample processing category develops and markets small centrifuges and other processing equipment and accessories for specimen processing. The Company’s sample processing group markets and develops centrifuges, semi-automated DNA processing workstations and sample processing consumables. Its StatSpin brand bench-top centrifuges are used for specimen preparation in coagulation, cytology, chemistry and urinalysis. Its worldwide markets include medical institutions, commercial laboratories, clinics, doctors’ offices, veterinary laboratories and research facilities.