Transcription of Finance News Network Interview with Medibio Limited (ASX:MEB) Executive Director, Kris Knauer Carolyn Herbert: Medibio Limited
(ASX:MEB) is a medical technology company developing a circadian heart rate variability technology, to assist in the diagnosis of depression and other mental health disorders, and chronic stress. I’m Carolyn Herbert and joining me at the CEO Sessions in Sydney is the company’s Executive Director, Kris Knauer. Kris welcome to FNN.
Kris Knauer: Thank you for having me.
Carolyn Herbert: Can you start by giving us an introduction to Medibio?
Kris Knauer: As you said we are a medical technology company, we’ve got two distinct streams in the business. Firstly, we aim to have the first FDA approved evidence based or objective test for depression, and other key mental health disorders. As opposed to the current practise, which is a sort of subjective pen and paper test. And in using the same technology, which is looking at basically architecture of your heart rate curve while you’re asleep, we developed a tool, which can diagnose your stress levels and the impact that stress is having on you.
Carolyn Herbert: How does the diagnostic test work and what is it designed to detect?
Kris Knauer: What we’re effectively doing is taking a snapshot of your autonomic nervous system, by the architecture of your heart rate curve, while you’re asleep. The research started in the University of Western Australia about 15 years ago. They noticed in a study they were doing with mentally ill people and looking at sleep disorders, some distinct waveforms for each type of illness. That then progressed to a data collection exercise.
So what we’ve got is we’ve now developed some machine learning algorithms, which will actually look at these waveforms in your heart rate, while you’re asleep. And put you in a box of normal, depressed, depression anxiety, anxiety and in a similar set of mission learning algorithms, which weren’t possible a couple of years ago, to diagnose your stress levels.
Carolyn Herbert: Has the technology been trialled and proven?
Kris Knauer: Internally yes, there have been three peer review papers written by the original inventors. One of those involves some blind testing, where they were getting around 80 per cent accuracy. There has also been a drug test done where the results haven’t been published, again they were getting better than 80 per cent. At the moment we’re just starting that work. We’re starting a study and we’ve got ethics approval yesterday, or it might have been the day before, with Johns Hopkins University School of Medicine in the US.
And we’ve also started a trial with the Bowdoin University, and it’s those trials that will aid and certainly validate the technology. But more importantly, provide the data we need for our FDA submission to get FDA approval.
Carolyn Herbert: Who’ll be the first customers for the test?
Kris Knauer: So I’ll go to our stress product, which is not the medical route. On the stress product we don’t need FDA approval, it’s not covered by the regulators. So we can and are commercialising now. We’ve signed an agreement with a large Australian corporate with over 10,000 staff; it’ll be an initial trial. And then assuming the trial goes well; they’ll rollout to their staff members. We’ve also signed an agreement with a wellness company in Perth, called Vital Communications. They have also got their first customer, which is a multinational with about 200,000 staff. It’ll initially start with their Western Australian staff, then rollout across Australia.
As we trial this, we’re also at the pointy end with a couple of big corporates. Mainly big insurers and wellness companies, who’ll go to market strategy for stress testers. We’re not going to put 70 sales people out on the ground and try to sell this to the corporates. We’ll partner with the wellness companies. So hopefully in the next month, you’ll see some announcements of these big partnerships.
Carolyn Herbert: How will the tests be delivered?
Kris Knauer: With the corporate tests, it’s at base. So what will happen is you’ll get an ECG monitor given to you as part of the test. You’ll put that monitor on, you’ll download our app on your phone and that app will guide you through syncing the monitor with your phone. The monitor sends the heart rate data direct up to the cloud; all of our readings sit on the cloud. It’s costing us $0.01 every time we run one of these tests, and then that will automatically shoot your stress test result back to the phone. And also there’s a series of interventions or treatments, tailored specifically to your stress level.
With the corporate, what they will actually see is a series of dashboards with de-identified aggregated data. So from the 100 staff we’ve tested, 70 per cent were in the moderate stress category, 10 per cent were in the serious category. So corporate stress test delivered by the phone app, in the medical route, it will be a pathology model. So in the US at the moment, you have to get your three-day heart monitoring for say, a suspected cardiac arrhythmia. You go to a clinic, they fit you with a monitor, you then use that monitor for three days, return it and our delivery mechanism in the medical market will be much the same.
Carolyn Herbert: Now to financials, what’s your cash position and are you fully funded?
Kris Knauer: At the moment we’ve got about $2.5 million in the bank. We’ve got about $1.8 million coming back from an R&D rebate, takes us up to about $4.3 million. We’re burning around about $800,000 a quarter, so we’re fully funded through to the first quarter of 2017. In that time, we’ll meet a number of key milestones. First should be FDA approval of our depression test. Secondly, we should have these key agreements with wellness companies that I was alluding to, signed up.
We’ll also be generating revenue and showing the ramp up in the business model. So that should let us, if we need to, raise some more money, probably late 2016, early 2017. And hopefully, it will add significant uplift to the current share price.
Carolyn Herbert: Finally Kris. What are you hoping to achieve in the next 12 months?
Kris Knauer: Next 12 months, I want to come back here in 12 months and basically, if we haven’t got FDA approval, we’re very close to FDA approval. We’ll have our validation study with options completed, results out. We’ll have three or four key multinational wellness corporations signed up. We’ll be generating revenue and be able to come back and tell you what that revenue is, and where we’re going to get that revenue in the next two to three years.
Carolyn Herbert: Kris Knauer, thanks for the introduction to Medibio.
Kris Knauer: Thank you very much.
Ends
