Health Check: For ASX biotechs, the business of America remains business
Imagion shares almost double on positive FDA feedback
Quiet drug developer PYC Therapeutics wins a friend
The US healthcare system is mired down by kerfuffles over tariffs, drug pricing and cuts to regulatory and funding bodies, but for ASX biotechs the wheels of decision-making keep grinding.
As President Calvin Coolidge (supposedly) said a century ago, 'the business of America is business' and that will never be Trumped.
Among a slew of US-related disclosures, Orthocell (ASX:OCC) notes it has pocketed its first US revenue from its flagship nerve repair device, Remplir.
The achievement follows Remplir's first surgical use in the US, for a foot repair in Ohio on June 26.
The company also cites revenue from 'subsequent early surgical cases in Florida, sourced from the company's network of specialist distributors'.
Orthocell's commercial traction comes just three months after the company won US Food and Drug Administration clearance for Remplir, which wraps around peripheral nerves and protects them during surgery.
Yesterday Orthocell reported June quarter revenue of $2.73 million, up 22.8% on the record March quarter.
This took annual revenue to $9.19 million, up 35.8%.
Crucially, that does not include Remplir US revenue.
First US revenue for Artrya, too
Meanwhile, heart device maker Artrya (ASX:AYA) has announced its first US revenue for its Salix coronary plaque detection platform.
This is by way of a US$600,000, five-year contract with the Georgia and Alabama based Tanner Health.
Tanner has a network of five hospitals, cardiovascular centres, and 30 physician practices.
'This first revenue represents a major milestone for Artrya as it continues to transition to a revenue-stage business,' the company says.
The FDA approved Artrya's device in March.
So like Orthocell, it's not wasting any time in monetising the opportunity.
Artrya is 'actively progressing' commercial discussions with other US hospital networks.
The company is also girding for FDA clearance of a further module.
US approval? Imagion that
Imagion Biosystems (ASX:IBX) today almost doubled after the company said it had received positive FDA feedback on the company's proposed phase II imaging trial for HER-2 positive breast cancer.
The company aims to detect cancers early with its Magsense imaging tech.
Magsense combines the use of magnetically detectable nanoparticles with biological agents.
The underlying tech, by the way, was created by a Los Alamos, New Mexico physicist called Edward R Flynn. The good doc tinkered with magnetic sensors after his wife contracted breast cancer.
The company plans to lodge an Investigative New Drug Application – that is, assent to start a trial – with the FDA in the current quarter.
Imagion says the agency provided 'positive feedback and constructive input regarding the study plan and outcomes.'
'I'm very pleased with the trajectory of our communications with the FDA', says Imagion exec chairman Bob Proulx.
Investors were pleased as well: the FDA's kind words sent the stock up as much as 92% this morning.
Imricor wins Northstar approval
Coming back to heart health, Imricor Medical Systems (ASX:IMR) has won European regulatory approval for Northstar, as well as its second-generation ablation catheters and capital equipment.
This was under the Continent's European Medical Device Regulation, a more stringent gateway than the old rules.
Imricor has developed the world's only MRI-guided ablation catheter, which are single-use consumables.
Consisting of a workstation and software, Northstar is key to making the magic happen.
In mid-April the European gatekeepers approved the catheters under the old pathway.
'Investments in sales and marketing are beginning to pay dividends, with the number of hospitals in the active European pipeline increasing from seven to 26 over the past six months,' Imricor says.
As always, the US presents the biggest market. There, the company has lodged vital documentation with the FDA as part of the Northstar approval process.
The company aims to submit all its supportive clinical data by the first half of 2026.
'Approval of Northstar will mark the commercial entry point for Imricor in the US and enable Imricor's sales team to initiate site engagement and pipeline development,' the company says.
Mach 7 maintains cruising altitude
ProMedicus (ASX:PME) 'mini me' Mach7 Technologies (ASX:M7T) has affirmed its revenue forecast for the year to June 2025, albeit at the lower end of things.
Mach 7 also expects to break even.
On preliminary unaudited numbers, Mach 7 expects revenue of $33-34 million, in line with guidance of $33-36 million and 15-25% higher than previously.
Management expects recurring revenue – subscription revenue and maintenance and support revenue – to be 20% higher.
But CARR – contracted annual recurring revenue - should come in at $30-31 million, just below the guided $32-35 million.
'Mach 7 is in a strong financial position with no debt and expects to be operating cash flow positive for the 2024-25 year,' management chirps.
Mach 7 provides medical imaging software, including image diagnosis and vendor-neutral image archiving.
In crude terms Mach7 is 'same but different' to Pro Medicus – a key commonality being a US focus.
But they don't compete directly, by and large.
A key difference, of course, is that Mach 7 is worth $80 million, with $22 million of cash backing.
Pro Medicus is valued at $33 billion, with its shares surging 140% over the last year.
Mach 7 shares have decline 44% over his period.
Sniffing a bargain, Mach 7 is lapping up its own shares by way of an ongoing share buyback.
Mach 7's new CEO Teri Thomas officially started on July 1 and will update investors on July 29.
Thomas headed breast imaging outfit Volpara Technologies, before it was taken over by a South Korean suitor last year.
Why we like PYC
Drug developer PYC Therapeutics (ASX:PYC) has maintained a low profile and that's partly because of its convoluted story over the years.
But the Perth-based PYC now has a clearer focus on a portfolio of four rare disease candidates for rare inherited diseases, across three clinical trials.
Growing investor awareness has pushed PYC's market cap to more than $840 million.
Broker Bell Potter reckons there's room for more as PYC 'has continued to execute impressively in recent months.'
PYC's trials cover the eye diseases retinitis pigmentosa type 11 (RP11) and autosomal dominant optic atrophy (ADOA), as well as polycystic kidney disease (PKD).
The most advanced, RP11 is fully recruited should start a registrational phase 2/3 trial in the next six to nine months. This follows recent FDA feedback on trial design.
'Early data has impressed on measurements likely to be primary endpoints in the future registrational trial,' Bell Potter says.
The trial would be the first ever pivotal study for RP11, which has no current treatment and affects 1500 to 3500 Americans.
Bell Potter values PYC shares at $2.30, a 58% increment on their current value.
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Still, he will be inescapably associated with the America Party. And that, too, could present a challenge. Or several. 'The other thing that's working against him is it's not really clear what his constituency would be,' Prof Smith said. 'I mean, Elon's supporters are generally, these days, a section of the Republican Party. Some of them might really like what Elon has to say. He wants low taxes, he wants a lot less regulation of everything. He's got this futuristic vision of a tech-led America. 'But really, most of those people are, at the end of the day, going to vote Republican. It's going to be a big concern, for them, to get Democrats out, and to do that, they vote for the Republicans, they don't vote for Elon. 'They will be conscious that if they were to vote for Elon, they might actually be taking votes away from the Republican Party. 'Elon, I suppose the party that he'd be closest to currently, apart from the Republicans, would be the Libertarians, and they've already got their own established constituency. It's really hard to see what niche he is filling in American politics.' Prof Smith did stress that, even if the America Party were to fall short of winning races, 'there are other ways' in which Mr Musk could exert his influence on politics. 'His candidates could be spoiler candidates, just siphoning a few votes off Republicans. He could, given his money and resources, he could run massive advertising campaigns. So he can definitely influence politics and exercise power, in a way, but I just don't see his party being very likely to get representation.' The other factor here of course, the other billionaire with a famously large ego in the conversation, is Mr Trump. And the President did feel the need to weigh in on Mr Musk's new party this week. 'I think it's ridiculous to start a third party,' he told reporters. 'It has always been a two-party system, and I think starting a third party just adds to the confusion.' He was a touch ruder on social media, accusing Mr Musk of going 'off the rails' and 'essentially becoming a trainwreck'. 'He even wants to start a third political party, despite the fact that they have never succeeded in the United States,' Mr Trump wrote. Prof Smith said that, to be fair, 'some of the stuff' Mr Trump threw at Mr Musk this week 'is probably true'. 'The fact that Trump is spending so much time on this, though – what it shows you is Republicans, like the Democrats, they get very, very worried about potential spoilers. 'In the lead-up to the 2016, 2020 and 2024 elections, all parties spent massive efforts to try to get spoilers out of the race.' As the foremost example, he cited Robert F. Kennedy Jr, the son of former US attorney-general Robert F. Kennedy. Mr Kennedy, an environmental lawyer who gained a following as something of a conspiracy theorist on health matters – vaccines, etc – ran as an independent last year before eventually dropping out and endorsing Mr Trump. His reward was to be appointed Secretary of Health and Human Services, putting him in charge of federal health policy. Which is worth a whole other article, another time. 'In the middle of 2024, it looked like he could seriously siphon some votes away from Donald Trump, so Trump basically got him out of the race by buying him off, by promising him the Health and Human Services position,' said Prof Smith. 'So these parties will do anything to try to keep spoiler candidates out of the race. What I think you would see is Republicans mounting all kinds of efforts to try to keep Elon's party off the ballot in various states.' That leads to some complicated legal calculus. 'This is where the whole sort of localised complexity of US politics becomes a problem for Elon because every state has different requirements for parties getting on the ballot, some of which are quite onerous,' he said. 'I'm sure there will be a lot of legal challenges. Given how close some of these races are, even a spoiler candidate who gets a few thousand votes could be a real problem. 'So the thoughtfulness of Trump's reaction shows that, while Elon doesn't have a hope of winning any seats, he certainly could siphon a few vital votes away.'
