IPO Watch: The man who took Medibank public is doing the same with bacteria fighter Next Science
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The man spearheading a $35m float for bacteria treatment developer Next Science is none other than George Savvides — the same man that took health insurance heavyweight Medibank public in 2014.
Sydney-based Next Science has developed a treatment that can clear up nasty bacteria that group together to fight antibiotics, and it’s launching a $35m IPO to take it to the next level.
Mr Savvides served as Medibank’s CEO for 14 years. At the time, the Medibank float was the second largest in Australia’s history.
Prior to that Mr Savvides also led the successful float of Sigma Healthcare in 1999.
Next Science, meanwhile, has developed a technology known as “Xbio”, which is the basis for four FDA-cleared products currently being sold in the US to eliminate “biofilm-protected” bacteria in surgery and chronic wound care applications.
Biofilm-protected means a bunch of bacteria get together to form a shield that is resistant to treatment by antibiotics.
It represents about 90 per cent of all bacteria, according to Next Science.
Mr Savvides, who is chairman of Next Science, said in his 30 years of leading companies in the medical device, pharmaceutical and health insurance sectors, he had seen the significant impact of biofilm-based infections on human health, causing patient morbidity and mortality, and compounding health system costs.
“Millions of people worldwide are affected by biofilm-based infections, such as chronic wounds, chronic otitis media (middle-ear), chronic sinusitis and implant and catheter-associated infections, each year,” he explained.
Surgical site infections are the most common type of hospital-acquired infections.
According to the US Centers for Disease Control and Prevention, the estimated annual cost of managing these types of infections in the US is between $US3.5 billion ($5 billion) and $US10 billion ($14.2 billion).
Meanwhile, the global cost of the chronic wound market was estimated in 2016 to be about $US13.7 billion.
Mr Savvides says Next Science’s proprietary technology has been validated by extensive clinical testing, multiple FDA clearances and more than 70,000 patient treatments since 2017.
Next Science has distribution agreements with major multinationals 3M for its wound care gel BlastX and Zimmer Biomet for its Bactisure product, used in surgery to wash out a body cavity like the colon or stomach.
So far, the company is still running at a net loss after tax of $US14.8m for FY18 – a much bigger loss than the $US6.9m booked in FY17.
That was despite bringing in $US2.8m in income in FY18 compared to $US548,000 a year earlier.
In the last financial year, Next Science reported $US17.2m in operating costs, $US10.3m of which was related to employee expenses.
The company expects to start selling its acne treatment in Australia in the second half of 2019 under a deal with Advanced Skin Technology.
The yearly costs associated with acne treatment have been placed at over $US3 billion in the US alone and $US4.9 billion globally.
Next Science is now hoping to raise $35m by issuing shares at $1 each so it can expand its product development activities.
Its IPO opens on March 15 and closes April 4, with listing pencilled in for April 29.
If Next Science raises the full amount it will have a market cap on listing of about $179.2m and $39.7m in the bank.
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