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Health & Biotech
Given the paucity of life science listings this year – and IPOs in general – it’s noteworthy that two of them hit the boards today.
Coincidentally, both have FDA-approved products.
A provider of cryogenic services for human and animal health applications, Vitrafy (ASX:VFY) this morning traded as high as $2 a share, an 8.65% premium to the $1.84 listing price.
The listings are the first for the sector since autism testing provider Blinklab (ASX:BB1) debuted in early April (which, before today, was the only life sciences IPO for the year).
The Ballarat-based Vitrafy raised $35 million to commercialise its products, which combine freezing and thawing units with software that regulates the process.
While there’s plenty of competition, Vitrafy’s schtick is that current nitrogen-based methods take too long, leading to the samples – such as cells, sperm or ova – degrading.
Vitrafy’s thawing device has FDA approval.
Meanwhile a nerve-repair play, ReNerve (ASX:RNV) , raised $7 million at 20 cents per share. Shortly after midday the shares traded at 18 cents.
Renerve is developing porcine collagen-based products to repair and regenerate damaged peripheral nerves and related soft tissue.
The FDA approved the company’s protective cuff, Nervalign in 2022 but sales are yet to flow in earnest.
Both Vitrafy and Renerve have ASX-listed rivals, in Cryosite (ASX:CTE) and Orthocell (ASX:OCC) respectively, so expect plenty of bragging about who has the superior mouse trap.
Respiri (ASX:RSH) has availed of its improved share price to purchase a private Texas-based company, Orb Health, in all-scrip deal valued at US$9 million – $13.8 million – plus another US$700,000 in working capital.
Orb Health undertakes remote patient monitoring, an area in which Respiri is keen to expand with its flagship Wheezo respiratory disease detection tool.
This calendar year Orb Health is expected to generate US$4.2 million in annual recurring revenue, compared with Respiri’s revenue for the year to June 30 2024 of only $500,000.
The purchase will add 2400 ‘connected care’ patients, taking the merged entity’s complement to 550 patients.
The union is also expected to generate cost savings of $3.5 million and cross-selling opportunities of $2 million in the first 12 months.
Respiri’s US operations are expected to be profitable from early 2025.
But the deal is bad news for senior Australian staff: the US expansion means local software engineering operations will be discontinued, along with most so-called ‘C suite’ roles.
The deal is subject to a shareholder vote in late December.
Respiri shares jumped 6.2% to 8.5 cents.
We like Kiwi companies because generally they work on a March end-of-year agrarian calendar, so their results are not bunched up with everyone else’s.
So, we have the headspace to report that wound care house Aroa Biosurgery (ASX:ARX) improved its sales revenue by 25% in the half year to September 30, to NZ$39.1 million ($35.2 million).
Aroa’s hero product was its Myriad range for soft tissue reconstruction and complex wounds, with a 45% sales increment to NZ$14.8 million.
Sales of Ovitex products by Aroa’s partner Tela Bio grew by 23%, to NZ$18.4 million. The Ovitex range is used for abdominal wall reconstruction and plastic and reconstructive surgery.
Aroa also reported a normalised underlying loss of NZ$1.5 million compared to a NZ$2.7deficit previously; with a reported net loss of NZ$3.294 million compared with the previous NZ$4.1 million shortfall.
With a cash balance of NZ$21.6 million, Aroa remains debt free and expects to be cash-flow positive in the current half.
The company has maintained full year guidance of revenue of NZ$80-87 million total revenue, up 21-32% and normalised underlying earnings of NZ$2-6 million.
Aroa’s products are based on its proprietary ovine forestomach matrix technology (a.k.a sheep guts). The material promotes new tissue growth and blood supply and dissolves in the body after it has done its job.
To date, Aroa’s products have been applied to more than six million wounds.
The sheep angle might sound like a quintessential Kiwi story, but Aroa is focused on the US market.
Aroa shares rose 0.8% to 65.5 cents.
Paradigm Biopharmaceuticals (ASX:PAR) has attributed this week’s share price run to something that hasn’t happened, rather than something that did happen.
On Monday the ASX queried the company as to why its shares leaped from 32 cents at Friday’s close to an intraday high of 45 cents yesterday – a 40% bounce.
The gains were also on elevated volumes.
The company said there were no announceables but noted that on October 31 it had submitted its revised phase III clinical trial protocol to the FDA.
“The FDA’s standard review period for such submissions is 30 days, concluding on November 28, 2024,” the company said.
“As of this date [Monday], the company has not received any feedback or communication from the FDA.”
In other words: no news is good news. If the regulator had had any queries, it would have piped up by now.
The trial will evaluate Paradigm’s repurposed pentosan polysulfate sodium (Zilosul) to treat knee osteoarthritis and to say that investors eagerly anticipate this study is an understatement.
Paradigm Biopharmaceuticals also expects a response to its determination application recently submitted to the local Therapeutic Goods Administration (TGA). Approval would pave the way for a further submission to have Zilosul approved as a local knee osteoarthritis treatment ahead of formal assent.
Management expects responses from both the FDA and the TGA by the end of December.
The phase III trial is expected to enrol 466 patients – half of them on placebo – with the primary endpoints of improved pain and movement function.
The company expects to start enrolling across ten Australian sites in the March quarter, with sites in the US, Canada and the UK added thereafter.
Paradigm shares this morning advanced a further 12%, to 51.5 cents.
At Stockhead, we tell it as it is. While Paradigm, Aroa and Renerve are Stockhead advertisers they did not sponsor this article
Health & Biotech
Health & Biotech
Health & Biotech
