Anteo Diagnostics targets international growth


Transcription of Finance News Network with Anteo Diagnostics Limited (ASX:ADO) CEO, Geoff Cumming

David Taylor: Hello David Taylor for the Finance News Network here in London for the ASX Spotlight Series. Joining us today is Geoff Cumming, he is the Chief Executive Officer of Anteo Diagnostics Limited (ASX:ADO). Well Geoff, thank you for your time today. Can you give us a brief idea of what Anteo Diagnostics is all about?

Geoff Cumming: Anteo is an ASX listed company that was formed, or its predecessor/precursor was formed in about 2002. Since then, it’s
been evolving doing the screening work and then the development work and then the early stage commercialisation, for a molecular glue. We’ve now got about 25 scientists on staff; we’re based in Brisbane Australia, growing rapidly from an ASX perspective. When I joined our market cap was $1.2, our market cap is now about $150 – and I joined five years ago. So we are advancing I think at a pleasing rate, but still feel that we’ve barely begun the journey.

David Taylor: Well Geoff, Anteo Diagnostics works in the life sciences space rather than pharmaceuticals. Can you give us an idea of whether your products are in fact, approved and circulating?

Geoff Cumming: That’s actually something that’s quite exciting for us in that in the therapeutic market, you have phase one and phase two and phase three. And by the time you get to phase three, you could have invested hundreds of millions dollars and it can fail. Our product is actually here and now and available for sale. Having said that, if it is to be used for the diagnosis of human conditions, it will require registration. But generally it’s likely to be, in the US what’s called a 510(k), which is to demonstrate substantial equivalents to the existing tests. And it’s therefore, a significantly truncated process and less expensive.

David Taylor: Well that’s the economics of it, but how do your products improve testing in discovery?

Geoff Cumming: Ah, so what we’ve got is an enabling tool in the diagnostic market. So if you deliver some urinal blood to a pathology lab, they’re going to be doing tests on it and about 20 per cent of the tests that they do in pathology labs, are immunoassays. What we do is we can either allow the production of cheaper immunoassays, or more sensitive immunoassays. Most immunoassays that are on the market at the moment don’t need any more sensitivity. So you can produce them much less expensively as a result of using less antibody. Antibody is the most expensive component of the test and using our mix and go glue, you can use as much as 90 per cent less antibody.

If on the other hand, increased sensitivity is beneficial and that’s the case in for instance, troponin which is used to measure whether a person has had a heart attack. You shouldn’t have any troponin in the system at all. And if you’ve had a heart attack and you’ve got heart cells dying, you’ll have some troponin there. We can develop troponin assays that are more sensitive than anything that exists on the market at the moment. So we get a very early indication of an adverse heart event.

David Taylor: Well you’ve recently approved two new products for beta testing. Can you tell me a little bit about these?

Geoff Cumming: What we’ve found in the work we’ve done to date is that we’re very much dependent upon the decisions of third parties, for our success. And so we’re under their control in a sense. What we wanted to do was to a limited extent, gain control over our own destiny. So as a result, we’ve now got a couple of products on the market, two and they are Streptavidin coated beads and Streptavidin coated plates. Through the course of this year, we’d expect to launch perhaps four to six new products.

Now the revenues that we get from those of course will help to sustain us as an organisation. But from my perspective more importantly, the fact that those products are on the market and selling commercially, lowers any perceived risk that might be in the minds of some of the other significant parties that we’re dealing with.

David Taylor: You’ve recently raised a further $5.5 million in a stock placement. How is this capital going to be used?

Geoff Cumming: OK, we’ve got about $7 million in the bank at the moment as a result at least in part, of that $5.5 million raising. Just to elaborate on our capital structure, we burn about $3.5 million per year at the moment and we also have about $2 million, coming in at the moment from the Government. In other words our burn; our real burn is about $1.5 million. We would expect to be cash flow positive with those governmental crutches, by the middle of this year. And we’re working towards being cash flow positive against that full $3.5 million, by the end of the year.

So the $5.5 million, what’s that being earmarked for? It was raised as a result of filing two new patents through the course of last year. Once you’ve filed a patent, you’ve got 12 months to “reduce the patents to practice”. And that’s to demonstrate how broadly they can be used in hopefully, commercially valuable areas. That’s what we will be applying that $5.5 million to, to injecting as much commercial value into the patents as is possible. And further to that, we will be doing the early stage commercialisation. So we earmarked the funds to employ about five more people, at the moment we’ve got three people already working with us, as a result of that raising.

David Taylor: With which international entities are you in negotiation?

Geoff Cumming: Well we are somewhat restricted in what we can say about who we are dealing with, but one that is well known is BBI Solutions. They are very well known as manufacturers of, probably the global leading gold nanoparticles that are used in lateral flow point of care. So if you go to a chemist shop and get a pregnancy test, that’s a lateral flow test. And at the heart of those tests are gold nanoparticles. BBI has made the best in the world for a long time. They wanted to improve their offering to withstand competition and they felt that through the use of Mix&Go, they might be able to produce a product that was demonstrably head and shoulders above the competition. So there’s one. Other names, we’re very proud of people with whom we’re dealing and we are looking forward greatly to being able to inform the market, about who they are. But for the moment for the most part, we need to be somewhat coy.

David Taylor: Are you developing any new products at present?

Geoff Cumming: Well through the course of this year, we would expect that several large entities are happy for us to announce our ongoing collaboration. What I’ve not mentioned is that at the moment, some of these large companies are paying us to do work on their behalf. That’s a useful revenue stream for us. Our main revenue stream we expect to be, royalties from inclusion of our product into major commercially successful products.

So what are we going to do through the course of this year? We would anticipate having several of those signed up, embark on several new collaborations and work towards making a commercial success of those as well.

David Taylor: You sound like a very confident CEO?

Geoff Cumming: Well I think I’ve got a good product to work with.

David Taylor: Geoff Cumming, many thanks for joining us today on FNN.

Geoff Cumming: Thanks for having me.