Special Report: The company’s research program with the world-leading entomology unit at Purdue University in the US has resulted in a unique solution to a global problem.

Ag-tech development Bio-Gene (ASX:BGT) updated the market with a key announcement yesterday that had been years in the making.

The company advised that trial results for its Flavocide technology – an insecticide used to eradicate disease-carrying mosquitoes – demonstrated material levels of toxicity for previously resistant carriers.

The result caught the market’s attention as Bio-Gene shares surged in morning trade, continuing strong momentum in the second half of the year which has seen the stock price gain around 150 per cent since July.

 

‘Years in the making’

Speaking with Stockhead following the announcement, Bio-Gene CEO Richard Jagger said the result was the product of a multi-year research partnership with the globally recognised entomology unit at Purdue University.

He said a primary reason for the excitement around the announcement was that it showed Flavocide demonstrated a unique “mode of action” when applied to disease-carrying mosquitoes.

“Mode of action describes how the chemistry actually works to control the pest, and how it interacts with the insect to kill it,” Jagger said.

“Older chemistries have different modes of action that mosquitoes have been exposed to for decades. Many share the same mode of action so if a mosquito is resistant to one product, it could be resistant to another.”

“The key difference is we’ve found a way to control them that’s very different to what’s been used in the past or present.”

Demonstrating the success of a unique formula opens up a number of commercial pathways, given the ongoing prevalence of mosquito-borne diseases in many regions.

Malaria cases globally number in the hundreds of millions, and around 400,000 people die from the disease each year. Factoring in instances of Dengue fever and the Zika virus, that number increases to more like 700,000.

And governments and health organisations are losing the battle, with more vector borne diseases spreading fast and the reduced effectiveness of current technologies. Until Bio-Gene began developing its Flavocide technology, no new types of insecticide were emerging.

“To do it differently than how it’s been done is exciting because we can take that information and commence discussions with the big players,” he said.

And given the nature of major public health problems such as malaria, potential partners range from big pharmaceutical companies to philanthropic organisations and major government departments.

Names in the space include the Bill & Melinda Gates Foundation, the World Health Organisation and the US Department of Defense.

“The list is huge, and we have a great opportunity to talk to those groups – particularly via connections through the experts at Purdue who are recognised as global leaders for this kind of research,” Jagger said.

“A lot of those groups are putting in significant resources. And with the size of those potential partners they can also help fund us on that journey. So it’s a real golden ticket.”

 

Investor interest

While the breakthrough with Purdue marks another step forward for Bio-Gene, a consistent run of positive news-flow has attracted a steady pickup in investor interest during the second half of 2019.

Discussing the recent share price momentum, Jagger said discussions with investors centred around the company’s approach to innovation, as well as steady stewardship of its capital base.

“Investors have seen that we’re beginning to de-risk the technology, and show where the potential lies,” he said.

“I think we’ve also been very good at looking after our funds. We haven’t raised any additional funds since our IPO in 2017, and we’ve still got $4m in the bank.

“It’s about leveraging our ability to build data and knowledge with other organisations and companies. We’re starting to put pieces together with the potential to deliver some much-needed tech in the world.

“So that’s what we’ve seen from investors – it’s been a good response and we’ve seen that trading volume has grown exponentially. So there’s a lot more interest and excitement around what we’re doing.”

This story was developed in collaboration with Bio-Gene, a Stockhead advertiser at the time of publishing.
This story does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

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