Health Check: Bug buster Genetic Signatures' US expansion is a jumbo-sized task
BTC Health makes a (literally) lifesaving sale
The lessons from Sarepta's billion-dollar FDA woes
Gut disease diagnostics provider Genetic Signatures (ASX:GSS) is finding its US market entry more elephantine than first envisaged and has made some changes 'to better align with current strategy and needs'.
On June 4 last year the US Food and Drug Administration (FDA) approved Genetic's Easyscreen, which can detect eight gastrointestinal (GI) parasites accounting for 90% of all tummy bugs.
On the same day the company launched a $30 million capital raise to support the US push and announced a new CEO (former Roche Diagnostics exec Allison Rossiter).
Genetic expected to be selling in the US within 60 to 90 days.
Today, Genetic says the US sales ramp-up has been 'impacted by prospective customers' internal processes, competing priorities, preference for enhanced workflow and uncertainty in the US healthcare environment.'
In part, the company discovered that clients craved more automated sample processing.
In response, Genetic has entered a three-way 'strategic partnership' with a mob called Tecan (lab automation) and Repado (compliant in vitro diagnostics).
This threesome will result in a 'scalable suite of fully automated diagnostic platforms for syndromic testing labs'.
Genetic doesn't mention any dollars, so we presume the financial impact is immaterial.
Speaking of finances, Genetic today reported June quarter sales of $4.4 million.
This was 52% higher than the March stanza, reflecting higher seasonal testing during the Australian flu season.
But turnover was flat on a year-on-year comp.
Having expended a net $5.95 million, Genetic ended the quarter with still-healthy cash of $30.9 million.
Microba GI testing sales are on tract
Still on tummy bugs, microbiome testing outfit Microba Life Sciences (ASX:MAP) has met its guidance with full-year revenue of $15.67 million, 30% higher year on year.
June (fourth) quarter revenue fell 13.5% to $4.2 million, the result of the company shedding a non-core research services business.
Microba has commercialised two clinical tests, to assess and manage GI patients.
The flagship Metaxplore tests assess a range of markers to appraise the GI tract and presents the results in a clear report.
Metapanel is the 'first line' test to determine whether the patient has a pathogen that can be treated simply with antibiotics.
Currently Metaxplore is sold in Australia and the UK, while Metapanel is available locally via the company's partner and biggest shareholder, Sonic Healthcare (ASX:SHL).
Microba chief Dr Luke Reid says Microba has a 'well considered plan' for US rollout, based on creating a beachhead in one city.
Mayne they could swap notes with Genetic's management.
Locally Microba sold 3451 Metaexplore tests during the quarter, up 88%. Microba also sold 266 Metapanel tests here (up 85%) and 429 in the UK (the test was only launched there in May).
Microba recorded net cash outflows of $5.56 million for the quarter, but management affirms the Australian and UK ops should be break-even this year.
BTC Health's PDF format suits investors
One of the more unusual life science plays on the bourse, medical product distributor BTC Health (ASX:BTC) has secured a $500,000 equipment order with Adelaide's Women's and Children's Hospital.
The order is for extracorporeal membrane oxygenation (ECMO) and follows a similar deal with Melbourne's Royal Children's Hospital.
ECMOs take over the work of the heart and lungs when these organs cannot perform their duties.
BTC Health is building a portfolio of diverse yet specialist medical devices, such as heart valves and infusion pumps.
BTC is a valuable pooled development fund (PDF), a remnant of a Keating-era initiative to bolster investment in small business.
PDFs pay only 15% tax on income and capital gains, but any returns to shareholders are tax free.
Only 17 PFDs remain and – like coastal property – God is not creating any more of them.
BTC chief Dr Richard Treagus previously headed generic drug play Acrux, the sector's only other PDF.
BTC posted December half revenue of $5.3 million, with underlying earnings of $200,000.
The company expects to have remained in the black for the full year to June 30 with a 'pathway to sustainable growth'.
Sarepta 'is worth nothing'
Could a $US1.31 billion company really be worth nothing?
US investment bank H.C. Wainwright thinks so, having ascribed a 'price target' of yada and zip to the Sarepta Therapeutics on the back of the Nasdaq-listed entity's drug strife.
Last week the FDA asked Sarepta to voluntarily halt shipments of its Elevidys gene therapy, for muscular dystrophy.
This follows the death of two patients from liver toxicity issues and the third from a separate experimental gene therapy treatment.
Defying the agency, Sarepta said it would continue to ship the therapy to ambulatory patients, but maintain a halt for wheelchair-bound ones.
The deaths pertained to the latter.
The FDA approved Elevidys two years ago for walking patients aged four or older, with the Duchenne muscular dystrophy (DMD) gene mutation.
A year later the agency expanded the assent to non-ambulatory patients.
Sarepta shares shed up to 40% on Friday and a further 5% overnight.
Don't fight City Hall
H.C. Wainwright previously had a US$10 valuation on Sarepta, compared with the stock's overnight close of US$13.32.
The firm describes Sarepta's fight with the FDA as 'unwinnable' and – indeed – you can't beat City Hall.
Elevidys generated US$384 million of net revenue in the December quarter, more than half of Sarepta's total revenue of US$638 million.
The lesson for everyone is that even when drug makers have done the hard yards of developing and commercialising a therapy, success is still not guaranteed.
In one of the best-known cases, in 1999 the FDA approved Merck's Vioxx, for osteoarthritis pain. After racking up billions in sales Merck withdrew the drug from sale in 2004, amid concerns it could cause heart attacks and strokes.
Locally, Percheron Therapeutics (ASX:PER) is reinventing itself after its DMD therapy failed in phase IIb stage last December.
Perhaps the company dodged a bullet by discovering the problems early in the piece, but wounded investors might disagree.
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Trump has said he will decide soon on a landmark trip to China, and a new flare-up of tariffs and export controls would likely derail planning. Top US and Chinese economic officials will resume talks in Stockholm to try to tackle longstanding economic disputes at the centre of a trade war between the world's top two economies, aiming to extend a truce by three months and keeping sharply higher tariffs at bay. China is facing an August 12 deadline to reach a durable tariff agreement with President Donald Trump's administration, after Beijing and Washington reached preliminary deals in May and June to end weeks of escalating tit-for-tat tariffs and a cut-off of rare earth minerals. Without an agreement, global supply chains could face renewed turmoil from US duties snapping back to triple-digit levels that would amount to a bilateral trade embargo. The Stockholm talks come hot on the heels of Trump's biggest trade deal yet with the European Union on Sunday for a 15 per cent tariff on most EU goods exports to the US, including autos. The bloc will also buy $US750 billion worth of American energy and make $US600 billion worth of US investments in coming years. No similar breakthrough is expected in the US-China talks but trade analysts said that another 90-day extension of a tariff and export control truce struck in mid-May was likely. An extension of that length would prevent further escalation and facilitate planning for a potential meeting between Trump and Chinese President Xi Jinping in late October or early November. A US Treasury spokesperson declined comment on a South China Morning Post report quoting unnamed sources as saying the two sides would refrain from introducing new tariffs or other steps that could escalate the trade war for another 90 days. Trump's administration is poised to impose new sectoral tariffs that will impact China within weeks, including on semiconductors, pharmaceuticals, ship-to-shore cranes and other products. "We're very close to a deal with China. We really sort of made a deal with China, but we'll see how that goes," Trump told reporters before European Commission President Ursula von der Leyen struck their tariff deal. Previous US-China trade talks in Geneva and London in May and June focused on bringing US and Chinese retaliatory tariffs down from triple-digit levels and restoring the flow of rare earth minerals halted by China and Nvidia's H20 AI chips and other goods halted by the United States. So far, the talks have not delved into broader economic issues. They include US complaints that China's state-led, export-driven model is flooding world markets with cheap goods, and Beijing's complaints that US national security export controls on tech goods seek to stunt Chinese growth. "Geneva and London were really just about trying to get the relationship back on track so that they could, at some point, actually negotiate about the issues which animate the disagreement between the countries in the first place," said Scott Kennedy, a China economics expert at the Center for Strategic and International Studies in Washington. "I'd be surprised if there is an early harvest on some of these things but an extension of the ceasefire for another 90 days seems to be the most likely outcome." US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng will lead the delegations in Stockholm. Bessent has already flagged a deadline extension and has said he wants China to rebalance its economy away from exports to more domestic consumption - a decades-long goal for US policymakers. In the background of the talks is speculation about a possible meeting between Trump and Xi in late October. Trump has said he will decide soon on a landmark trip to China, and a new flare-up of tariffs and export controls would likely derail planning. Top US and Chinese economic officials will resume talks in Stockholm to try to tackle longstanding economic disputes at the centre of a trade war between the world's top two economies, aiming to extend a truce by three months and keeping sharply higher tariffs at bay. China is facing an August 12 deadline to reach a durable tariff agreement with President Donald Trump's administration, after Beijing and Washington reached preliminary deals in May and June to end weeks of escalating tit-for-tat tariffs and a cut-off of rare earth minerals. Without an agreement, global supply chains could face renewed turmoil from US duties snapping back to triple-digit levels that would amount to a bilateral trade embargo. The Stockholm talks come hot on the heels of Trump's biggest trade deal yet with the European Union on Sunday for a 15 per cent tariff on most EU goods exports to the US, including autos. The bloc will also buy $US750 billion worth of American energy and make $US600 billion worth of US investments in coming years. No similar breakthrough is expected in the US-China talks but trade analysts said that another 90-day extension of a tariff and export control truce struck in mid-May was likely. An extension of that length would prevent further escalation and facilitate planning for a potential meeting between Trump and Chinese President Xi Jinping in late October or early November. A US Treasury spokesperson declined comment on a South China Morning Post report quoting unnamed sources as saying the two sides would refrain from introducing new tariffs or other steps that could escalate the trade war for another 90 days. 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"Geneva and London were really just about trying to get the relationship back on track so that they could, at some point, actually negotiate about the issues which animate the disagreement between the countries in the first place," said Scott Kennedy, a China economics expert at the Center for Strategic and International Studies in Washington. "I'd be surprised if there is an early harvest on some of these things but an extension of the ceasefire for another 90 days seems to be the most likely outcome." US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng will lead the delegations in Stockholm. Bessent has already flagged a deadline extension and has said he wants China to rebalance its economy away from exports to more domestic consumption - a decades-long goal for US policymakers. In the background of the talks is speculation about a possible meeting between Trump and Xi in late October. 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