GO
Loading...

Start Up Hopes to Put Drug Test at Companies' Fingertips

If you invented a drug test that detects illegal substance levels via fingerprints, where might you sell it?

Fingerprint drug-testing prototype.
Source: SmartStart Inc.
Fingerprint drug-testing prototype.

You may seek the country with the highest imprisonment rates in the developed world, and the birthplace of the crime solving FBI.

Indeed, Intelligent Fingerprinting, a private, U.K.-based company developing said device, raised approximately $5 million in March alone from angel investors in America.

The portable device, informally called the "IFP", detects drug use from the sweat in fingerprints. The company says heroin, cocaine and cannabis use can be detected in less than 10 minutes.

One Texas-based company, Smart Start, specializes in alcohol monitoring for drivers and is so jazzed about the new product, it bought a 35 percent stake in Intelligent Fingerprinting, joined the board of directors and has signed on as a distributor.

The partnership is mutually beneficial. Intelligent Fingerprinting gains access to key law enforcement markets it would not have on its own, and Smart Start, in turn, gets a cut of the profits — so Smart Start's CEO Lamar Ball is already thinking big.

"So far, we deal with police and highway patrol, who benefit from a roadside product," he said. "Blood and urine testing is very time consuming. But we want to grow, and expand into the corporate and prison marketplaces."

Ball claims the U.S. drug testing marketplace is a "$2 billion business," of which prisons account for 10 percent, and corporations about 50 percent of market share.

He concedes that the largest market will be the toughest to crack. "It's harder to work the corporate market than prisons," he said. "Companies are often already using third-party providers, like wellness programs, to get the backgrounds of new employees so they already have the relationships."

Even with that challenge, tech analyst Jeff Kagan thinks the market timing is good.

"If it works, it could be a good thing for companies to uncover a problem earlier rather than later," said Kagan. "Much of corporate America tries to have as much control as possible, but invasion of privacy will be a factor here as well."

As Kagan spoke, the Governor of Florida, Rick Scott, was in court over this very issue of drug-testing and privacy, or as the judge put it, "unreasonable search." Scott's order to randomly test state employees for drugs was ruled unconstitutional just last week.

Though the case deals with public-sector drug testing, the case got Intelligent Fingerprinting's attention.

"You can only test within the framework of corporate policy, be it pre-employment drug testing or randomly," said Dr. Paul Yates, business development manager at Intelligent Fingerprinting.

'The main hurdle for us is companies' initial response to negotiating that policy," added Yates.

For now, the device is moving forward in its development, and Yates will leave the rule book up to the lawyers.

The goal, Yates says, is to match the device's replaceable cartridge tests to a company's individual requirements.

The device has been approved with a U.K. patent to test for cannabis, cocaine and heroin; Intelligent Fingerprinting also plans to add testing for amphetamines and PCP drug.

Meanwhile, more structural capabilities are in the works.

"We think this device can help law enforcement officials use fingerprints to link a person back to a police database, for profiling. We're looking to add that," said Yates.

His patience, along with the new capabilities, are being tested. The product is still pending both patent and FDA approval in the U.S., which Yates expects should allow for sales to begin by the end of 2012.

The next challenge: sales. How well they do on that end will depend upon on what they can offer companies in the way of saving money.

Smart Start estimates the device will sell for less than $5,000, depending on additional features that might be requested. A standard five-drug test cartridge, which aligns with the U.S. National Institute on Drug Abuse's (NIDA) standard panel, would be less than $10, according to Yates.

That $5,000 may sound steep. But Yates says in most cases it would be cheaper than standard blood and urine tests, given the facility and personnel costs involved.

"There are many ways of beating urine tests, and because of that, there's a lot of prep-work to be done," Yates says. "Samples have to be witnessed by another individual; it requires time, effort and personnel."

So far, Yates says their closest competitor is German-based Draeger, which offers oral screening devices that can also test for multiple drugs. The manufacturer's list price for the Drager DrugTest 5000, is under $4,000.

Ultimately the final pricing call, Smart Start's Lamar Ball stresses, "will meet market conditions."

While Intelligent Fingerprinting still has some hurdles to face before it sees success in the U.S. market, the bottom line, says tech analyst Kagan, is that the new entry moves the industry forward. And that's a positive.

"Will this change the drug-testing industry?" he asks. "No. But it will add a whole new chapter to the book."

Email us at SmallBiz@cnbc.com
Follow us on Twitter @SmallBizCNBC

Featured

Contact Small Business

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    › Learn More