A Glance At Medical Technology Company, LBT Innovations Limited

LBT Innovations Limited (ASX: LBT) is a medical technology company based in Adelaide, South Australia and is engaged in the development of world’s leading products in microbiology automation. The company offers advanced technology solutions to the healthcare industry, utilising artificial intelligence and software engineering.

LBT’s first product MicroStreak^®, was the first such product in the automation of the culture plate streaking process globally. The Automated Plate Assessment System (APAS^®), the second product of the company, is an advanced platform technology used for automation of culture-plate screening. The APAS^® is being commercialised through LBT’s 50 per cent owned joint venture company Clever Culture Systems AG (CCS) with Hettich Holding Beteiligungs- und Verwaltungs-GmbH.

US FDA 510(k) clearance was recently granted to Clever Culture Systems’ APAS^® Independence instrument with urine analysis module (AM).

The company has an active pipeline of products targeting the clinical unmet needs. LBT’s projects include APAS Analysis Modules, WoundVue technology, Biofilm, Automated Gram Stain Assessment, and MicroStreak.

Achievements of LBT in the March Quarter 2019

LBT informed that it focussed on the early commercialisation activities in Australia, the EU and the US during the March quarter.

• United States – During the quarter, Clever Culture Systems initiated the lead generation sales activities ahead of the expected FDA clearance (in 2H FY19) of the urine analysis module, by reaching out to over 600 prospective customers to understand their automation needs and laboratory profile.
• European Union – To complete the pre-clinical development phase of new analysis modules for the detection of Methicillin-resistant Staphylococcus aureus (MRSA), the company worked closely with its reference site partners.
• Australia – LBT started a clinical study of the MRSA modules at St Vincent’s Hospital, Melbourne.

In April 2019, representatives of LBT attended the largest global conference for clinical microbiology in Amsterdam – the European Congress of Clinical Microbiology and Infectious Diseases (ECCMID). The MRSA clinical data was presented at ECCMID meeting, which confirmed that the system performed with a sensitivity of 100% and a specificity of 98.1%.

The net cash outflow of the company in March quarter was $1.5 million which was below the company’s forecast outflow ($2 million) in the December 2018 Quarterly Report. The company witnessed a lower than expected spending as the company:

• Deferred planned increases in expenditure.
• Focussed all activities to those critical to achieving a regulatory cleared product in the US and Europe.
• Commenced early work towards specific sales opportunities ahead of a cleared product in those key geographies.

The cash balance at the end of the quarter was reported at $4.2 million. LBT also achieved the requirements for the first instalment ($1 million) of its loan facility provided by the South Australian Government. The funds are intended to support the company in insourcing core technical capability in South Australia, with ten additional staff added over the last 15 months, in the areas of artificial intelligence, software and science.

Future Outlook

LBT expects to undertake the following activities in the near future:

• Completion of the clinical evaluation for the MRSA analysis modules in the second half of 2019, providing the formal validation required. The completion will support the self-certification regulatory processes in the EU (CE Mark) and Australia (TGA), which will give way to the commercial release of the modules in Europe and Australia.
• Launching of the APAS^® Independence instrument in US on receiving the FDA approval.
• To develop its sales pipeline for the US, CCS will continue with lead generation activities. Placements of instruments with the purpose of an evaluation to procure is expected to begin in the second half of 2019.
• LBT has planned several customer meetings for the upcoming Australian Society of Microbiology meeting along with tours of the LBT facility, offering customers an in-depth understanding of the technical AI development as well as demonstrations of the APAS^® Independence instrument.

LBT is trading at A$0.175 (As at 3:32 PM AEST, 29^th May 2019). The stock has generated a return of 110.53 per cent, 185.71 per cent and 150 per cent during the last six months, three months and one month, respectively.

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