Following big deal, Applied DNA gets defensive

The best offense: Applied DNA Sciences is counting on the U.S. Department of Defense for a little networking help.

Just a week after closing a $5 million stock deal with a single private investor, Applied DNA Sciences is enlisting big-time with the U.S. military.

This week, the Stony Brook-based supply-chain, anti-counterfeiting, anti-theft and product-authentication specialist announced back-to-back deals for its flagship SigNature DNA product, both with armed-forces implications.

The first deal involves microcircuits for the U.S. Defense Logistics Agency, the Department of Defense’s combat logistics command center. The second is a potentially lucrative reseller agreement with a provider of packaging services for military and commercial customers.

Both partners deal with third-party suppliers facing modern-day supply-chain risks – ideal targets for Applied DNA’s innovative, botanical DNA-based coding, which the company says is unbreakable.

Janice Maraglia: Proud to safeguard the DoD's supply chain.

Janice Maraglia: Proud to safeguard the DoD’s supply chain.

On Tuesday, Applied DNA announced a one-year, fixed-price Indefinite Delivery Purchase Order with the DLA. Terms of the deal were not disclosed, but the company said in a statement that the contract – which covers supply-chain authentication of critical FSC 5962 microcircuits – supports existing DNA-based security programs at the DLA’s Product Test Center, part of its Land and Maritime Facility in Ohio.

Janice Meraglia, Applied DNA’s vice president of government and military programs, said the Stony Brook company was “proud” to support the Department of Defense’s logistics agency in its “strategic efforts to identify and manage supply-system risks.”

“Collaboration with the team at Land and Maritime has allowed for smooth, continuous improvements as we partner on a full forensic solution including people, process and technology,” Meraglia added.

The DLA deal will provide a wide range of DNA-marking supplies and services, pairing unique SigNature DNA marks with proprietary inks and authentication testing, plus specialized training for DLA personnel.

In its new reseller agreement with Pennsylvania-based ActionPak Inc., Applied DNA will be providing tamper-evident labels combining SigNature DNA marks and Beacon, the company’s “locked optical marker” for real-time inspections. Using a patent-pending “unique encrypted mechanism,” Beacon provides covert screening that can be applied to packaging, labels and valuable assets through inks and varnishes.

Terms of the reseller agreement were also undisclosed. But ActionPak President Ira Smith said in a statement his packaging-services enterprise chose to work with Applied DNA after teaming up with the Stony Brook innovator on a cloud-based “track and trace” logistics simulation, part of a pilot project Applied DNA recently completed for the Department of Defense’s Rapid Innovation Fund program.

“Having participated with Applied DNA in a successful pilot of their forensic authentication and tracking solution … we are delighted to offer this solution to both military and commercial customers,” Smith said.

The primary target of the reseller agreement will be the industrial military complex – “Our immediate focus is supporting and delivering a solution for military suppliers,” Smith noted – but ActionPak is “keen to introduce this technology to our entire customer base, which spans from food to pharmaceuticals to retail consumer goods,” according to its president.

“We strongly believe that DNA will become a low-cost solution for preventing counterfeit products from entering supply chains,” Smith added.

ActionPak is certainly a good friend to have, agreed Bob MacDowell, Applied DNA’s director of government and military programs, who noted the Pennsylvania-based supplier “services a broad base of military, industrial and commercial suppliers that touch multiple industries.”

But it’s ActionPak’s government connections – the new reseller is a longtime supplier of many federal agencies of military and non-military stripes, including the U.S. Food and Drug Administration – that make it such a valuable partner, according to MacDowell.

James Hayward: Expanding SigNature DNA's range.

James Hayward: Expanding SigNature DNA’s range.

“As we transition work performed under our U.S. government contracts into fully commercialized products and solutions, our go-to-market strategy includes distribution via key channel partners, such as ActionPak,” the Applied DNA director said.

Reaching broader markets through government connections is certainly emerging as a mainstay of the Applied DNA strategy. In announcing the DLA deal, the company noted the completion of two other security contracts this year, with the U.S. Missile Defense Agency and the Office of the Secretary of Defense – and in both cases, Applied DNA worked with a host of commodities-supplying government subcontractors, including electronics manufacturers, aerospace engineers and numerous distributors of bearings, piping, hoses and other ubiquitous mechanical hardware.

Applied DNA President and CEO James Hayward noted the multi-market benefits of working with government agencies, including that front-line exposure to large-scale distributors facing all those modern tampering risks.

“Together, these contracts have strengthened our core capabilities to offer supply-chain solutions across an expanded range of critical commodities,” Hayward said. “These parts and assemblies are used in defense, industrial and consumer markets.”

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