United Press International - October 4, 2002
Stephen Sheldon, UPI Business Correspondent

Kiehne, a born-again Christian, is founder and managing director of Occupational & Medical Innovations, or OMI Ltd, Australia's hottest small cap firm. With the help of the Almighty, he says, he has turned the medical establishment on its head.

"God showed me a few things, and gave me a talent to see the answer to the problem," the straight-talking Kiehne told United Press International. That could well turn out to be quite an understatement.

Over the past two weeks, OMI shares have doubled since Kiehne's nine-employee firm signed a multi-million dollar Heads of Agreement with B. Braun, one of the world's largest manufacturers and suppliers of medical products, to sell it at least 4 million OMI Needle Free Access Valves per year for 5 years.

The valves are used in hospitals to reduce the number of needle sticks required in patient care. They can be attached to intravenous lines and catheters, to allow drugs to be administered without a needle. According to B. Braun, the OMI valve is unique for a number of reasons: it has a flat surface and is easier to sterilize; it is compact; it is pressure positive, therefore preventing blood from clotting in the valve's chamber; and it is cost effective to produce.

If successful in clinical trials in Australia, B. Braun says the OMI Valve will be sold worldwide. Quite a big deal, as more than 100 million valves are sold in the U.S. each year alone.

It is the first time B. Braun has purchased Australian technology. "We were very excited when we saw the OMI valve, because we believe it is superior to any valves currently on the market," said Managing Director of B. Braun in Australia, David Crawford.

The story of Kiehne's metamorphosis into medical technology innovator began in 1996 when he began converting a derelict building frequented by heroin addicts into a Pentecostal church. While cleaning up the site, his brother-in-law was pricked by a discarded syringe hidden in a chip packet.

According to Kiehne, the trauma caused by the injury helped trigger the break-up of his marriage.

"It destroyed his life. So I decided to do something," said Kiehne. "I asked the Lord: what are we going to do?"

He began researching the topic of needle-stick injuries and says he was "deeply touched" by the story of Pennsylvania nurse Lynda Arnold, who became infected with HIV from a needle-stick.

He then began a mission to prevent needle-stick injuries by designing an affordable retractable syringe, which eventually gave way to other products aimed at minimizing injuries.

How did he do it? "You don't need a college degree," said Kiehne. "It's common sense. One plus one equals two. It all comes back to something I read: It's the simple things that confound the wise."

Initial funding came from a local car yard, whose management was shocked by the number of used syringes left lying around its yard. When the money ran out, he decided to float his company, hoping to raise about $3 million.

Trouble was, no one wanted to know him. "The banks and brokers thought I was a nut," he said. "They looked at me and thought: who is this guy who believes he can change the way the world practices medicine?"

So Kiehne arranged his own float. "It was by word of mouth, and the word spread like wildfire," he said.

In October 2000, he began selling shares directly to the people who lined outside his small office, with a shuttle service ferrying the money to the bank. He held on to 10 million of the 25 million shares on offer.

The float was twice over-subscribed, allowing Kiehne the last laugh on the money men.

"I tell you what, they all ring me now!" he says with some glee.

He's now taking OMI into a market controlled by multinationals.

"You go through a really scary period when you look out on the larger market. But you have to grasp the moment," he said.

Just last week, OMI had another win, gaining Australian approval to sell its surgical scalpel.

The OMI Safety Scalpel has already been tried by Queensland surgeon Russell Strong, who hailed it a breakthrough in terms of its safety features.

"The OMI scalpel has a unique blade guard, allowing the instrument to be rendered completely safe, which is very important in an operating theatre," he said.

The scalpel has also been subject to trials in the U.S. where OMI has applied for approval from the Food and Drug Administration, and Kiehne is talking to a number of interested companies.

Kiehne says he has "half a dozen technologies sitting behind" the scalpel as well. Perhaps the closest to his heart is an automatically retracting syringe for use in the medical industry and in needle exchange programs. While the concept is not new, the main drawback of devices developed so far have been their complexity and cost.

The unique thing about the OMI syringe is that it has only one more part (a spring) than a standard syringe and, at about 10 cents (about the same as a conventional syringe), is far cheaper than existing retractables.

The retractable syringe market is huge and growing rapidly. A recent market intelligence report by Frost & Sullivan estimates that the market will account for almost 70 percent of all syringe supply in the United States by 2006.

Already, 18 U.S. states have legislated for mandatory use of retractable syringes where available.

Also in the pipeline is OMI's new cannula with automatic retractable needle, which is aimed at eliminating the safety concerns of health workers while installing intravenous drips. More than 270 million intravenous cannulae sell worldwide each year.

All of which has attracted a swarm of interest from day traders trying to make a quick buck from one of the most tightly held stocks on the market.

The rally has taken the shares from 55 cents at the start of September to over $2.00 this week. And while the stock has eased back to just over $1.30 as traders took profits, the stock price spike shows what can happen when research and development is successfully commercialized.

Kiehne is unconcerned that OMI is still to post a profit, and while he would not divulge when he thought the company would go into the black, he said: "I've done the figures and it doesn't seem too far-fetched that we will have profits of over $25 million not that far off."

"We still have (about $1 million) in the bank and we are spending it carefully. Every cent is accounted for. I don't want OMI to be a dot-com company."

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