- Bio-Gene has won two US military grants to further its natural insecticides to fight nuisance creepy-crawlies
- The latest quarterly reports show promising revenue trends
- ASX biotechs bolster their US manufacturing footprint
Maker of natural insecticides Bio-Gene Technology (ASX:BGT) shows that supplying the military is not just a case of selling hardware or weapons.
Bio-Gene shares more than doubled in value this morning after management announced two US$1.9 million ($3 million) competitive grants with the US Deployed Warfighter Protection (DWFP) program.
The enemy in question is not the Chinese or sundry rogue nations such as Greenland, but mosquitos, ticks, flies and bed bugs.
As great military forces have discovered over the centuries, fatalities from afflictions such as malaria, dengue fever or dysentery can be greater than those afflicted by their foes.
Worth $1.6m, the first grant involves developing a wearable product containing Flavocide, Bio-Gene’s repellant against mozzies and “other insect vectors of disease”.
The second pertains to developing a sprayable formulation of Bio-Gen’s Qcide, to control flies and bed bug infestations.
While the DWFP sounds like it’s all about screaming jets, it’s administered by the US Armed Forces Pest Management Board.
Bio-Gene chief Tim Grogan says the contracts were won in a peer-reviewed, competitive process and “substantially validate” the two programs.
“In addition to military use, we see a very large commercial opportunity for these products in the civilian market, where more than 700,000 deaths occur annually from vector-borne diseases,” he says.
The market for bed bug zapping is worth US$2.3 billion alone and is expected to grow to US$4.9 billion by 2032.
As well as for public health applications, Flavocide and Qcide have crop protection, grain storage and consumer applications.
A key selling point is that being au naturel, they don’t pose the same resistance issues as current synthetic insecticides.
Bio-gene is not required to match the US funding, which is just as well because as of September 2024 the pre-revenue company had cash of $1.4 million.
Bio-gene is not the only ASX life sciences play to bring germ warfare to the US military.
The maker of Travelan, diarrhoea-buster Immuron (ASX:IMC) has multiple programs with various US defence agencies.
Nyrada (ASX:NYR) has participated in a brain injury study with the Walter Reed Army Institute of Research.
Island Pharmaceuticals (ASX:ILA) benefits from US$624,000 of US Department of Defence funding to support its prophylactic trial aimed at preventing dengue fever.
Quarterlies forecast improved revenue with a chance of profits
The ongoing quarterly reporting fiesta shows that companies recently entering commercialisation are making a decent fist at growing their revenues to meaningful levels.
In the case of Aroa Biosurgery (ASX:ARX), the Kiwi-based wound management house reported December quarter cash receipts of NZ$21.9m in line with expectations but 10% better than the September quarter.
The US-focused entity also reported its first quarter of positive cash flow, with a NZ$1.24m surplus.
Management expects revenue of NZ$81-84m for the full year to March 2025, 17-22% higher with underlying earnings of NZ$2-4m.
The company says 56% of revenue derived from direct sales, with its high-margin Myriad range expected to become a larger part of the revenue mix.
A provider of microbiome testing, Microba Life Sciences (ASX:MAP) posted quarterly receipts of $3.87m, 109% higher with positive cash flow of $1.8m.
December half receipts rose 147% to $8.08m.
Others report promising revenue, but cash burn remains high.
Lung imager 4D Medical (ASX:4DX) pronounced operating revenue of $1.5m, 200% with cash outflows of $5.1m.
Also US-centric, the company said its algo-based devices had been installed at 301 sites, up 41% year on year. The company undertook 8000 scans, 77% higher.
Curvebeam’s 18% share surge defies AI market curveball
Developer of AI-based devices to monitor orthopaedics and bone health conditions CurveBeam AI (ASX:CVB) has improved its disappointing listed performance to date.
The company reported 10 purchase orders in the December quarter compared with four previously.
Curvebeam’s weight-based computed tomography devices generate high-resolution, three-dimensional images of bones, soft tissue and dental structures.
The company’s most famous advocate is President Biden – yes, he’s still formally known as such – who underwent the procedure after sustaining a hairline fracture while playing with his dogs in the White House.
Shares in the Andrew Forrest-backed Curvebeam haven’t traded within coo-ee of their August 2023 listing price of 48 cents, but they bounced 18% to 13c this morning.
Companies heed ‘made in America’ message
With the Trump Administration accentuating existing ‘made in America’ policies, life science companies are turning their minds to their US manufacturing footprint.
In the case of stem-cell leader Mesoblast (ASX:MSB), the company makes its therapies in Singapore.
But given the FDA’s groundbreaking approval of its paediatric graft-versus-host disease treatment Ryoncil, a US shift is on the cards.
Mesoblast chief Professor Silviu Itescu notes there’s excess manufacturing capacity in the US, the result of cell therapy companies assuming drugs such as Car-T therapies would come to market faster than they have.
“Other than blood cancers the solid cancer story hasn’t really panned out,” he told Stockhead.
“There are well-established brand-new facilities across the US that give us the capacity to grow.”
These sites usually have generous existing government incentives.
Prof Itescu says the quest for a US site is not urgent, as the Singapore site houses enough inventory to back the Ryoncil rollout for two to three years.
Yesterday, EBR Systems (ASX:EBR) said it had signed up for a new larger facility in California to make its Wise wireless pacemaker devices, ahead of expected FDA approval.
Struck on “very favourable terms” on an 11-year lease, the 4751 square metre facility is just down the road from the company’s current Santa Clara digs.
The terms include a one-year rent holiday and the landlord chipping in US$4 million in tenant improvements.
The company plans to move in the first half of 2026, after the FDA has ticked off the facility.
Lung imager Cyclopharm (ASX:CYC) makes its Technegas devices in Sydney’s Kingsgrove, but has flagged a secondary manufacturing site “somewhere in the world”.
With the FDA last year approving Technegas, odds-on it will be within US shores.
At Stockhead, we tell it as it is. While EBR Systems, Aroa Biosurgery and Island Pharmaceuticals are Stockhead advertisers, they did not sponsor this article.
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