Australian biotech Anatara is busy working on its next big idea in the market for digestive health products.

The company caught investors’ attention in May last year, when it signed a distribution deal for one of its animal products with global player Zoetis.

However, the underlying terms of the deal weren’t as good as the market had hoped, and the stock price promptly slumped.

Some poor market communication aside, Anatara (ASX: ANR) has been back in the lab — this time focused on customers of the two-legged (human) variety.

The company says it’s concluded a successful proof of concept study for a dietary supplement that treats gastrointestinal problems.

Qn: What is GaRP?

Answer: Any product that assists in Gastrointestinal ReProgramming.

GaRP products are used in the treatment of both Irritable Bowel Syndrome (IBS) and Inflammatory Bowel Disease (IBD).

More than 10% of the world’s population experience IBS symptoms at some point, so a successful treatment formula could be potentially lucrative.

Anatara completed its proof of concept for a dietary supplement which treats IBS using “in vitro” gut models to measure its performance.

Speaking with Stockhead, Anatara CEO Stephen Lydeamore further clarified how the process works.

“The trial is conducted inside test tubes, so we’ve created 3D gut models which effectively map out a human gut replica inside the test tube,” Lydeamore said.

According to Anatara, the supplement significantly reduced inflammatory proteins, and cut the number of inflammatory bacteria that infect health gut cells by around 95%.


Not a bad strike rate, but the company is being cautious in its next steps.

“It’s a dietary supplement, not a drug,” Lydeamore said, which means the amount of hoop-jumping required for regulatory approval is a bit less rigorous.

But Anatara will still take the time to ensure that its product meets the Generally Regarded As Safe (GRAS) criteria, as prescribed by the Therapeutic Goods Aministration.

“Getting GRAS approval will make it easier to bring on a global health company as a partner,” Lydeamore told Stockhead.

Like previous Anatara products, the core of their supplement comes from the same ingredient taken from the base of a pineapple. But this incarnation is a bit more complex and includes additional inputs.

Anatara’s plan from here is to carry out testing of the product on actual humans in the second half of this year.

It then wants to partner up and move towards a commercialisation strategy by H2 2020.

Funds check

During the December quarter Anatara did a lot of product testing, but no selling.

As a result, quarterly operating cash outflows rose to $1.115 million and the company isn’t exactly swimming in money.

Lydeamore is confident; he told Stockhead that he’s mapped out a cashflow forecast all the way to the proposed commercialisation phase, and doesn’t expect liquidity problems.

As at December 31 though, the company only had $1.495 million in liquid cash or cash equivalents. But if a squeeze intensifies, it’s got access to another $4.5 million held in term deposits over 90 days.

For now, the market is waiting to see more evidence that a successful commercial strategy could come to fruition.

Shares in Anatara were unchanged at 50 cents following the announcement, still well down from their 12-month high of $1.73.