Applied DNA Sciences inks mega security deal

Applied DNA Sciences CEO James Hayward: Catell knows infrastructure.

A new partnership with a California-based training organization represents a big step toward realizing Applied DNA Sciences’ plans for the United States – starting with access to more than 12,000 U.S. police departments.

Applied DNA Sciences, a Stony Brook-based biotech firm providing anti-theft and product-authentication solutions, announced a “collaboration agreement” Tuesday with Sacramento-based Security Marketing Resource, a security-focused marketing and online training organization. The agreement will allow more than 12,000 U.S. police departments to be trained and certified on Applied DNA’s SigNature DNA programs, which use double-strand plant DNA to create security markers for brand protection, supply chain security and anti-theft purposes.

The collaboration will also provide a “central Internet portal” for more than 14,000 U.S. private security firms to train their field technicians, as well as a customer relationship management area of the portal allowing private security firms to purchase SigNature DNA protocols for their clients.

Applied DNA Sciences CEO James Hayward cited the “very important strategic advantages” of the deal. The company, which Hayward relocated from California when he became CEO in 2005, has already trained officers in Denmark, Sweden and nearly 70 U.S. police departments on SigNatureDNA protocols, but to truly penetrate the domestic market “we need the support of police nationally,” Hayward noted, even though “the police are not the customer.”

“The customer could be an insurance company or an individual homeowner,” the CEO told Innovate LI. “But in the event their home is robbed, we need the police to know how to recognize a marked item, how to sample the DNA, how to send us samples through the chain of custody container and how to manage our expert-witness documents.

“The infrastructure to make it work requires the police,” Hayward added. “And what’s been amazing is the enthusiasm has been so broad … this business goes from police chief to police chief.”

The law enforcement training and certification programs and the private-security CRM options are expected to be available when the new portal goes live in January. The companies are anticipating an initial market of more than 500 domestic security firms with an estimated 500,000 private customers.

Security Marketing Resource CEO Greg Rankin, who launched the marketing and training enterprise in 1987, said he was excited to partner with Applied DNA Sciences, noting no innovation has more “potential impact … for crime deterrence [or] the apprehension and conviction of criminals” than forensic DNA.

“Blending existing security technologies with the proven science of DNA will open up many new opportunities for security organizations to provide a much higher level of safety, security and peace of mind,” Rankin said in a statement.

The collaboration agreement continues Applied DNA Sciences’ 2015 hot streak, which has included a prestigious – and potential lucrative – index listing, several professional partnerships and most recently a corporate acquisition.

On June 26, global investor-index publisher FTSE Russell added Applied DNA Sciences to its Russell Microcap Index, which tracks the microcap segment of the U.S. equity market. Following the smallest securities in the Russell 2000 and the next thousand smallest eligible securities by market cap, the index is decidedly small-fry – but it does provide increased exposure to the financial community.

Hayward would not speculate on whether the hot streak would convince FTSE Russell to put Applied DNA Sciences on the Microcap Index again in 2016 – the index appointment is for one year only – and stressed that “our focus is on our company’s performance and insuring the best return for our investors.”

Neither would the CEO confirm that the Russell Microcap Index listing has generated an investment influx. Hayward did note that Applied DNA Science’s trading volume has been on the rise and said “interest in our stock has certainly been following an upward trend,” but credited those gains to a multitude of factors.

Investors certainly took notice in September, when Applied DNA Sciences announced a series of corporate alliances and international extensions and even a corporate acquisition. First, the firm announced it had qualified another California company – Gilroy-based Creative Labels Inc. – as a “certified print partner” capable of providing customers with SigNature DNA-based labelling solutions. The deal, which included a unique botanical SigNature DNA identifier to be marketed exclusively by Creative Labels, was designed to expand Applied DNA’s reach into vertical markets, according to the Stony Brook company.

Applied DNA Sciences also expanded its European reach in September, signing a five-year exclusivity agreement with UK firm Patronus Systems Ltd. to supply SigNature DNA protocols for a Patronus bonding agent with security uses in European ATM machines.

Also in September, Applied DNA Sciences announced it had acquired the assets of West Virginia-based Vandalia Research, a $1.5 million cash deal that scored Applied DNA Vandalia’s core DNA-sequencing technology and related IP, as well as existing Vandalia contracts with pharmaceutical and biotech customers.

The Vandalia Research acquisition allows Applied DNA Sciences to mass-produce specific DNA sequences – a terrific innovation for a firm focused on DNA-based security – and to produce longer DNA strands, which according to Hayward could ultimately prove useful to scientists involved in gene therapy and DNA-based vaccinations.

Integrating Vandalia tech and personnel into Applied DNA Sciences’ operations has gone “very well,” Hayward added.

“We did our due diligence extraordinarily well,” the CEO said. “It’s been a picture-book acquisition.”

Following Tuesday’s Security Marketing Resource announcement, Hayward – a former research director for cosmetics kingpin Estee Lauder, venture fund partner and two-time Inc. Magazine Entrepreneur of the Year – said he envisions a distribution infrastructure that makes SigNature DNA programs like DNA Home Asset Management and DNA Forensic Sting Kits available to “every citizen and corporation in the United States.”

“This agreement provides the support framework that will allow our DNA programs to be taken up by police departments and municipalities from coast to coast,” he said.