Small Talk: Akers to be transformed by US allergy test deal

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The Independent Online

Akers Biosciences will today unveil a distribution deal that has the potential to transform the medical tests company. It will make public a US distribution agreement for its Heparin allergy test with Cardinal Health, a top healthcare industry player across the Atlantic. Although Akers already sells its product in the US the deal is set to take its marketing to a completely different scale as the tie-up with Cardinal should enable it to penetrate more hospitals in more states.

The US is a massive market for the group as it has more than 8,000 hospitals. Meanwhile, Heparin tests are fast becoming a crucial part of the surgical process. It is a drug administered to patients to thin the blood and prevent dangerous clots during surgery. It is cheap and nearly a trillion units of the treatment are administered every year in the US.

But it does have a major drawback. About 50 per cent of patients develop some type of allergic reaction to the drug, and many prove to be severe.

The solution is to test people for the allergy before administering it, but existing tests take a while to produce results, which is clearly no good in cases of emergency surgery.

This is where Akers comes in. Its unique test gives an almost instant result and lets doctors know in the emergency room whether a patient should or should not be given Heparin.

Akers' test is also becoming increasingly important because of a steady increase in the number of lawsuits in the US relating to Heparin malpractice. The average payout is more than $1m (£540,000) and entire law firms have sprung up in some parts of the US dealing solely with these cases. At present, all the signs point to Akers doing rather well from its innovative technology.

Harrier take-off

Corporate action is on the way at Harrier Group. The former IT services group confirmed last month that it has sold its remaining operating subsidiaries, thereby turning itself into a cash shell. Harrier has £4.4m in the bank and is believed to be looking to complete a reverse takeover. The group's biggest shareholder is Bob Morton, the small-cap entrepreneur. He has a great track record of doing deals at the smaller end of the market and always insists on keeping a sizeable shareholding after he has engineered a takeover. His most recent successes include Armour Group, the in-car entertainment firm, Systems Union, the accountancy software specialist, and the support services group, MacLellan.

Diamond to sparkle

Positive news flow is key for the share price performance of mining companies in relative infancy. Dwyka Diamonds is one such company from which investors can expect upbeat statements from over the next six months.

At present, it has two small producing assets in South Africa - a diamond mine and a brick plant - but hopes to move up a gear after last week's purchase of three new hard rock diamond mines. Dwyka plans to upgrade the three and having them all in production by Aprilr.

IPT's a fast grower

Investors looking to put their money into a fast-growing company will not go wrong with Interactive Prospect Targeting.

IPT is a direct-marketing specialist and has managed to grow at an average 60 per cent a year since being formed in 2000. Brokers forecast it to notch up a pre-tax profit of £1.5m this year, rising to £3.8m in 2006. IPT's recent acquisition of its rival Postal Preference Services was funded by a £3m placing at 115p and since then its shares have risen to 140p. But even after this performance, IPT stock still trades at a discount to its closest peer, Deal Group Media.

The group is due to post interim results in three weeks and they are unlikely to disappoint.

White Nile is on a risky course

In May, Small Talk urged investors to be ultra-cautious about White Nile, the Sudan-focused oil explorer half-owned by the government that controls the south of the African country.

Back then, this column thought the company was one of the riskiest enterprises on the Alternative Investment Market and since then these risks have only increased.

A peace agreement signed in January between the rebel SPLM (Sudan People's Liberation Movement) in the south and the Khartoum government in the north was at best an uneasy deal, and has become more so since the death last month of the SPLM leader, John Garang. He negotiated the treaty which ended Africa's longest civil war, but his death in a helicopter crash has greatly undermined the agreement.

In the immediate aftermath, rioting claimed the lives of more than 130 people in Sudan's capital alone.

Although the rebels quickly found a replacement for their veteran leader in the form of Salva Kiir, the peace in what is Africa's largest country is far from certain.

To reflect this setback, shares in White Nile have retreated swiftly from their 147p high, and closed on Friday at 61p. But even after this drop, the company is still valued at slightly less than £200m. This looks too high a valuation, given that the group has cash reserves of only £16m.

This money must cover the cost of developing its prospect in the Muglad Basin in Southern Sudan, fighting off a possible legal challenge to its ownership of the site from the French oil giant Total and building a pipeline to the nearest port, which is Mombasa in Kenya.

Investors should not be surprised to see White Nile shares drift lower.