Health Check: Syntara shares plunge on FDA ‘do more trial homework' edict
Avita Medical looks to raise capital after a disappointing quarter
EBR Systems is on track for limited US launch of its novel heart pacing device
Shares in cancer drug developer Syntara (ASX:SNT) this morning lost almost half their value, after unfavourable advice from the US Food & Drug Administration (FDA).
The agency has advised the company to do a placebo-controlled phase II trial, before proceeding with a proposed pivotal study for myelofibrosis.
As any drug developer would attest, it's always a good idea to take the agency's counsel on board.
The FDA wants a placebo-controlled trial to glean "additional safety and efficacy data'.
Syntara says the trial should focus on improvements in symptoms and spleen volume reductions, 'in order to optimise the design and efficiency of a subsequent pivotal phase III trial'.
Agency takes "conservative" approach
CEO Gary Phillips today told investors the company only heard the news on Saturday and was still digesting the implications.
'The FDA has taken a more conservative approach to get the drug to approval,' he says.
'It's not the fast track we were looking for, but nonetheless their guidance is extremely helpful.'
In effect, the company can't leapfrog to a planned phase II/III trial, enrolling up to 300 patients at a cost of around US$80 million.
The company now is likely to carry out a 90-patient phase 2b study, probably with 60 on active treatment and 30 on placebo.
Phillips estimates the cost 'in order of US$25 million', but the study would mean a subsequent phase III trial potentially could be smaller and cheaper.
The FDA's stance does blow out the company's time lines, given the phase II effort would take 12 to 18 months to recruit.
Ironically, the more circuitous path means lower short-term cash requirements: the company's $15 million should last into 2027, rather than mid 2026 as envisaged.
'The FDA has given us a different clinical path, but everything else around this asset remains the same,' Mr Phillips says.
Promising early results
The FDA mulled the interim data from Syntara's ongoing phase 1c/2 trial, which tests Syntara's amsulostat (SNT-5505) in combination with the standard-of-care ruxolitinib.
Results to date from the open-label study suggest amsulostat 'may deliver deep and long-lasting benefit of patients who are sub optimally controlled by ruxolitinib alone'.
Syntara values the myelofibrosis market at US$1 billion a year.
Meanwhile, the company expects to release further results from the current open-label trial before the end of September.
Reimbursement 'confusion' crimps Avita's sales
Friday's poorer-than-expected June quarter result from Avita Medical (ASX:AVH) shows the burns and wounds care pioneer is lagging its revenue and earnings targets, with US reimbursement delays delaying sales from upgraded products.
Avita has commercialised Recell for thermal burn wounds and full-thickness skin defects. Unlike other treatments, Recell harnesses the patient's own skin in a spray-on format.
In May 2024 the FDA approved Recell Go, which has enhanced features for clinicians.
The agency in December then approved Recell Go Mini, for smaller wounds of up to 480 square centimetres.
Missing expectations
In short, the US rollout has been slower than expected, partly because of reimbursement delays.
Bell Potter suggests this resulted from confusion over administration of these payments, which saw physicians not getting paid.
There's no Hell like a doctor not being remunerated and they reverted to alternative therapies including skin grafts.
Avita posted June quarter revenue of US$18.2 million 20% higher year-on-year but flat on the March quarter tally. The numbers were around 16% below market expectations.
June half revenue gained 35% to US$36.5 million.
The company lost US$9.9 million in the quarter, compared with a US$15.39 deficit a year ago.
Management has trimmed calendar 2025 guidance to US$76-81 million, from the previously guided US$100-106 million. The tally is 19-27% higher year on year.
Balance sheet concerns
As of June 30, Avita had cash and equivalents of US$15.7 million. It also has a US$40 million debt facility, from specialist lender Orbimed Advisors.
The company has won a series of waivers its debt covenants, relating to minimum quarterly and annual revenue.
But Avita must continue to maintain a minimum US$10 million of cash.
In a 'going concern' note to the accounts, management says that 'absent any mitigating action, the company probably won't be able to comply with a minimum cash balance covenant within the next 12 months.
'The company is actively evaluating strategies to obtain the required additional funding for future operations. This includes an equity raising.'
Broker Morgans says 'despite a significant shortfall in sales, Avita successfully rolled through cost-base reductions as planned, decreasing the net loss with more to come in ."
Nonetheless, "another missed guidance target is unlikely to reassure investors, and it is now evident that additional capital will be necessary to support the company to profitability.'
Rating the stock a 'speculative buy', Morgans forecasts a calendar 2025 loss of US$36.5 million, improving to a US$18.1 million deficit in 2026.
Avita then cracks a US$5.6 million profit in 2027.
Morgans assumes a US$50 million equity raising.
Bell Potter believes the administrative 'confusion' resulted in a 20% drop in demand for Recell over the half – a 'material circa $5 million in lost revenues over the top 10 accounts alone'.
The firm says Medicaid patients account for 70-75% of Recell volumes, 'hence it is critical that the matter is resolved without further delay'.
Avita shares have tumbled close to 20% since Thursday's close and have lost about two-third of their value since the start of the year.
EBR Systems readies US rollout
Following a pilot stage, EBR Systems (ASX:EBR) is on track to roll out its novel heart device in the US market in the December quarter.
In April the FDA approved WISE, the world's first and only leadless pacing system for heart failure.
Addressing a Canaccord Genuity conference in Boston, EBR CEO John McCutcheon said the company would focus on 'strategic' hospitals.
Crucially, in October EBR won reimbursement for both inpatient and outpatient settings, at up to US$63,300 per procedure.
EBR cites an 'initial addressable market' in the US of US$3.6 billion.
In early June EBR announced its first commercial implants, at St David's Medical Centre in Texas and the Cleveland Clinic.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
West Australian
7 minutes ago
- West Australian
ASX reporting season live updates: All the news from companies reporting their results to the market today
OK, we eased into the week yesterday. Nothing too alarming, nothing too much to worry about ... all things considered. JB Hi-Fi delivered a solid set of full-year results but investors showed their nerves when it was announced CEO Terry Smart was unplugging from the electronics giant and would exit at the start of October. A beefed-up final dividend and a special payout of $1 a share weren't enough to soothe shareholders and the stock closed down more than 8 per cent. Ouch. But it was a btter day for lithium miners after the closure of a mine in China raised hopes of improved prices for the key battery ingredient. PLS, Mineral Resources and Liontown Resources all enjoyed double-digit gains. But the main focus was on whether the Reserve Bank would cut official interest rates today. The market seemed to think so, with the S&P-ASX200 hitting a record intraday high in early trade. But before we get to that call, we have SGH (formerly Seven Group Holdings), Seven West Media and Life360 waiting in the wings to deliver their results. On with the show ... Here's whathappened on US markets overnight. Wall Street's main indexes ended lower as investors anxiously await inflation data this week to assess the outlook for interest rates and eye US-China trade developments. Investors expect the recent shake-up at the US Federal Reserve and signs of labour market weakness could nudge the central bank into adopting a dovish monetary policy stance later this year, fuelling much of the optimism. July's consumer inflation report is due on Tuesday, and investors anticipate that the Fed will lower borrowing costs by about 60 basis points by December, according to data compiled by LSEG. 'The inflation data is starting to embody the more direct tariff impacts on the consumer, raising concern that inflation will remain sticky,' said Eric Teal, chief investment officer at Comerica Wealth Management. 'Lower inflationary readings and slower growth numbers are needed to support the case for lower rates.' The Dow Jones Industrial Average closed on Monday 200.52 points, or 0.45 per cent, lower to 43,975.09, the S&P 500 lost 16 points, or 0.25 per cent, to 6373.45 and the Nasdaq Composite lost 64.62 points, or 0.3 per cent, to 21,385.40. Read the full wrap up here .
News.com.au
2 hours ago
- News.com.au
FDA Waiting Room: For Aussie applicants, it's (mainly) business as usual
Despite myriad pressures under the Trump regime, the FDA's drug and device approval process largely has been unfettered Telix Pharmaceuticals expects a company-making approval decision by the end of the month Painchek is among a string of device plays awaiting the agency's assent The US Food & Drug Administration's (FDA) resources have been cut more times than Martin Scorsese's then-edgy 1988 religious drama The Last Temptation of Christ. Word from within the powerful agency's imposing Maryland portals is that reviewers have struggled with their task of late because of lack of access to Zoom calls and similar everyday privations. For a legion of Australian drug and device makers awaiting company-making FDA approvals, it's a nervous time. But need they be worried? Business as usual In most cases, the risk of rejection is the same as being struck by lightning. The prevailing message is that despite mayhem at the agency in the Trump era, the approval process has not overly slowed unless the therapy is in a controversial realm (read: vaccines). Rather like the Kyiv denizens carrying out their lives amid a barrage of missiles, it's largely business as usual. A couple of notable rejections aside – namely Replimune Group's melanoma drug RP1, and see the Telix section below – so far this year the FDA has approved therapies for a range of cancers, autoimmune diseases, urinary tract infections and even menopausal hot flushes. PainChek (ASX:PCK) CEO Phil Daffas says the FDA does a 'superb' job under considerable pressure. The developer of a digital pain assessment, Painchek awaits FDA clearance under the de novo (new) device pathway (see below). 'Their M.O. (modus operandi) has been nothing but guidance and support,' he says. Aussie biotechs get the nod ASX life science have-a-go heroes have found favour, especially in the devices and diagnostics realm. In the drug space, the FDA last December greenlit Mesoblast's (ASX:MSB) graft-versus-host disease stem cell treatment, Ryoncil. In June, the agency approved CSL's (ASX:CSL) home-grown Andembry, the world's only prophylactic for hereditary angioedema. Device-wise, the agency approved Orthocell's (ASX:OCC) peripheral nerve repair tool Remplir. It also waved through EBR Systems' (ASX:EBR) groundbreaking left-ventricle assist device Wise and Nanosonics' (ASX:NAN) next-gen medical probe steriliser, Coris. 'Everyone was getting nervous towards the end, but we were very fortunate not to be impacted (by the FDA changes),' Nanosonics chief Michael Kavanagh says. 'The Australian medtech industry should be proud, not necessarily Nanosonics but Australia's ability to do these types of things.' Telix sweats on kidney imaging decision Is the FDA poised to make us further proud? Radiopharmacy giant Telix Pharmaceuticals (ASX:TLX) will know within three weeks whether the FDA has approved its kidney cancer imaging agent, Zircaix. The stakes could not be higher for the $6.8 billion market cap Telix, given Zircaix could well present a bigger market than for Illuccix, its approved prostate cancer imaging agent. So far at least, the FDA hasn't come back with any queries. Mind you, Telix hasn't had its way on other fronts. The FDA in late April knocked back the company's New Drug Application (NDA) for its brain cancer imaging agent, TLX101-CDx. As Telix CEO Dr Chris Behrenbruch pointedly noted, this was despite 'a robust consultation process prior to submission and during review of the NDA'. Painchek's painless process As with Telix, the FDA's decision will be company making for Painchek. Painchek's eponymous app is used across 110,000 nursing home beds in Australia, the UK and Canada – an addressable market of 500,000 beds. The US opens a market of three million beds, worth an estimated $100 million in annual recurring revenue. Painchek's FDA process started in 2019, when the company sought guidance on a supportive clinical trial (since successfully completed). 'The primary contact was the same person all the way through,' Daffas says. Painchek lodged its review in November 2024, after two pre-submission meetings with the agency. 'They recommended a two-step process, with feedback after each step,' he says. 'That was very helpful guidance. If there was room for a misunderstanding it got clarified in those two meetings.' Daffas says the FDA reps included experts in AI, privacy rules and cybersecurity and communications. 'Once again it's very helpful for us, as it makes for a more robust product.' Painchek expects an FDA decision around early October. 4D Medical breathes easy The developer of algo-based lung images tools, 4D Medical (ASX:4DX), has 'frequent flyer' status with the FDA which has approved eight of its devices already. These include its XV LVAS, which processes conventional X-ray scans 'to provide rich, functional lung health detail not available via other modalities'. 4D is now waiting to hear from the FDA about a ventilation perfusion imaging device. The company dubs the FDA's review as 'well progressed'. 4D has filed under the 510(k) predicate device route. According to the company, last year companies waited an average 112 days for an FDA yeah or nay. The current situation is 'aligning well with our experience in previous applications', the company says. Artrya is back for seconds … Artrya (ASX:AYA) says hard-to-detect coronary plaque is a key cause of heart attacks. This was an uncontroversial proposition for the FDA, which in late March approved Artrya's Salix Coronary Anatomy (SCA) platform. The AI-enabled tool provides point-of-care detection of high-risk plaque, a key predictor of heart attacks. Artrya has submitted for approval of a second device, Salix Coronary Plaque (SCP). SCP will extend the use to patients who have undergone a coronary CT angiogram. 'Once cleared, will enable us to deliver near real-time, AI-powered cardiac analysis to a large and growing market and unlock access to an established reimbursement code for plaque analysis,' co-founder (and now CEO) John Konstantopoulos says. The company expects to hear from the FDA by the end of September. … as is Echo IQ As with Artrya, heart diagnosis peer Echo IQ (ASX:EIQ) is no stranger to the FDA. In October last year the agency approved its EchoSolv AS, an AI-inspired device to detect aortic stenosis (narrowing of the heart valves). Echo IQ now is eyeing consent for a second product, EchoSolv HF, to detect heart problems early. It has teamed up with the esteemed Mayo Clinic to carry out a validation trial, the final requirement for FDA submission. Mayo also has exclusive rights to use EchoSolv HF across its 30 hospitals and possibly even co-brand the product. Echo IQ expects FDA approval by the end of the year. Imricor goes modular Still on matters of the heart, Imricor Medical Systems (ASX:IMR) is taking a Lego Masters approach to its maiden FDA application, for its cardiac ablation device, Vision-MR. By this we mean that Imricor has submitted its FDA in separate modules ('bricks'), to enable a rolling review. Vision-MR is the only ablation catheter designed for use with a magnetic resonance imaging (MRI) scanner, as opposed to x-ray fluoroscopy. The company last week said the second module was under review and it expects to submit the third module in the December quarter. 'We expect a steady string of 510(k) product submissions and approvals, which in turn helps accelerate the commercial launch across the US," the company says. In the March quarter European regulators re-approved Vision-MR, under tougher new rules. The European gatekeepers also approved Northstar, 'the world's only MRI-native 3D mapping and guidance system.' The FDA is also likely to approve Northstar in the current half. This will enable the company to start the initial rollout of its interventional cardiac magnetic resonance cardiac ablation labs. Patience, please Some applicants strike trouble with the FDA because they assume that reading the agency's intentions is easy as a Golden Book, when in fact they can be harder to fathom than Ulysses. As Telix's brain cancer setback attests, being on the same page is crucial. Amid the chaos of RFK Jr's early days as health czar, in March your columnist warned that while FDA approvals were often company making, don't expect quick returns. That's because shares may have run hard in anticipation of the happy event and profit takers move in. Often, companies raise capital on positive news and this constrains the share price. EBR did the rounds for $66 million in May and Mesoblast in January raised a monstrous $260 million. FDA approval is only the first step to commercialisation: securing reimbursement and distribution network are just as important. But without consent, companies aren't even in the starting block to tackle the world's richest – albeit more quixotic – healthcare market. If anyone needs reminding, the US accounts for roughly half of the world's healthcare expenditure.
ABC News
3 hours ago
- ABC News
Donald Trump extends China's 125pc tariff deadline for another 90 days
Donald Trump has signed an executive order extending a pause in sharply higher US tariffs on Chinese imports for another 90 days, a White House official said. A tariff truce between Beijing and Washington had been set to expire on August 12 at midnight Beijing time (3:01pm AEST), but the Trump administration had hinted the deadline could be extended. The US and China agreed to a 90-day pause on triple-digit tariffs in May, after the trade war sent world markets tumbling. If it is not extended, US tariffs on Chinese goods will shoot up to 145 per cent, with Chinese tariffs on US imports set to hit 125 per cent. On Monday, the US president said Washington had been "dealing very nicely with China". "We'll see what happens. They've been dealing quite nicely. The relationship is very good with President Xi [Jinping] and myself," Mr Trump told reporters. Earlier in the day, Beijing said it was looking to Washington for "positive" trade outcomes. "We hope that the US will work with China to follow the important consensus reached during the phone call between the two heads of state," said Chinese foreign ministry spokesperson Lin Jian in a statement. He added that Beijing also hoped Washington would "strive for positive outcomes on the basis of equality, respect and mutual benefit". Although both sides reached a pact to de-escalate tensions after high-level talks in Geneva in May, their truce has been shaky. In June, key economic officials convened in London as disagreements emerged and US officials accused their counterparts of violating the pact. Policymakers again met in Stockholm last month. Even as both countries appeared to be seeking to push back the reinstatement of duties, US trade envoy Jamieson Greer said last month that Mr Trump would have the "final call" on any such extension. Last week, US Commerce Secretary Howard Lutnick said in an interview that it is likely Mr Trump would further the pause by another 90 days. Mr Trump said in a social media post late on Sunday that he hoped China would "quickly quadruple its soybean orders", adding that this would be a way to balance trade with the United States. For now, fresh US tariffs on Chinese goods this year stand at 30 per cent, while Beijing's corresponding levy on US products is at 10 per cent. Since returning to the presidency in January, Mr Trump has slapped a 10 per cent "reciprocal" tariff on almost all trading partners, aimed at addressing trade practices Washington deemed unfair. This surged to varying, steeper levels last Thursday for dozens of economies. Major partners like the European Union, Japan and South Korea now see a 15 per cent US duty on their products, while the level went as high as 41 per cent for Syria. The "reciprocal" tariffs exclude sectors that have been separately targeted, such as steel and aluminium, and those that are being investigated like pharmaceuticals and semiconductors. Mr Trump has also taken separate aim at individual countries such as Brazil over the trial of former president Jair Bolsonaro, who is accused of planning a coup, and India over its purchase of Russian oil. AFP/ABC
