The board of ASX-listed Cellmid, an Australian life sciences company, has responded to the COVID-19 crisis by fast-tracking the supply of a new rapid diagnostic test to the Australian medical market after a $6 million capital raising. Here’s how the board reacted quickly to the new market opportunity.
Cellmid knew it was onto an innovation that was of desperate need in the Australian medical market and the company has wasted no time in starting to supply the first shipment of 12,000 rapid diagnostic test kits to doctors.
The test uses a virus-specific detection method that delivers results in three to 15 minutes and requires minimal laboratory equipment.
CEO and board director Maria Halasz GAICD says the company has been inundated with requests. “We have been overwhelmed with expressions of interest, so we have started fulfilling orders from doctors already. The tests are for professional use only, so they have to be used by medical practitioners.
”The SARS-CoV-2 test was approved by Australian Therapeutic Goods Administration (TGA) as a point of care test (POCT) on 25 March, after Cellmid struck a supply agreement partnership with Australia Applications, the authorised distributor of Guangzhou Wondfo Biotech.
The Cellmid board has worked rapidly to get the product to market through due diligence processes and a capital-raising of $6 million. “The board had to act fast over a matter of a couple of weeks – maybe two to three weeks,” Halasz told the AICD in an interview. “In that period, we went through the whole process of identifying the opportunity, going through due diligence and making all the decisions.”
The board was involved in the strategy process, including engaging with the manufacturer and the local distributor. “The technical due diligence was done by our scientific team, but three of our directors have a strong biotech/medtech background, so they were part of the committee overviewing it,” says Halasz.
The firm employs 50 staff in Australia, Japan and the United States and has started a small research project to learn more about the disease by monitoring antibodies at different stages of the disease.
The decision to supply the much-needed product came after a number of approaches from multiple companies in the same space. “The Australian distributor is really like an agent,” she adds. “But Cellmid has the import permit, and the sponsorship of the Therapeutic Goods Administration and we are on the ground running the product-related message in Australia.”
Once the board was comfortable with pursuing the opportunity, it considered the capital requirements for the project. “It was clear that we would need additional funding if we wanted to rapidly deploy these tests where they are most needed. The board assessed the level of funding requirements and the decision was made to raise up to $5 million, including a share purchase plan. When the issue was heavily oversubscribed, the board made a decision to accept applications up to $6 million,” says Halasz.
A virtual shareholders’ meeting will be held soon to approve directors’ participation in the capital raising, she adds. The board was involved in due diligence of the supply agreement and in approving all shareholder communication.
The new product supply extends the firm’s biotechnology operations, but given the intense interest in COVID-19, the company has “received a lot more attention on the market”, says Halasz.
“We have been doing very well with our consumer business already and expected to become operationally profitable this year before the COVID-19 outbreak. The SARS-CoV-2 test is an important extension to our diagnostic products and of course we are also very happy to contribute to the solution to this pandemic.
“The Cellmid sponsored kit is manufactured in a facility in China, certified by the Australian Therapeutic Goods Administration (TGA). The rapid test kit differs from others on the Australian market because it is faster and can be used by mobile teams without the use of complex laboratory equipment.
Simple, rapid screening methods that do not need sophisticated equipment are critically needed to detect cases and prevent further spread in Australia, especially in medically under-served regional areas and for essential businesses.
The presence of antibodies to SARS-CoV-2 confirms exposure and is likely to convey immunity to COVID-19. Cellmid expects the test to be largely used to facilitate return to work programs.
There are two types of tests for the COVID-19 virus; nucleotide tests measuring viral load and antibody tests measuring the body’s response to the virus.
“Ours is an antibody test, and it is also a rapid point of care test (POCT) which detects antibodies within 15 minutes. This is useful to monitor exposure (anyone who was/is infected) and immunity (anyone who is safe from the disease). It is very important information to develop ‘return to work’ strategies; something boards are already looking at closely,” she says.
Business development staff are to be hired by Cellmid to work on the project. “Boards are looking for solutions they can trust,” says Halasz. “We are trying to pull all expertise together so we can deliver solutions to boards and companies that they can use for return to work programs.
”Antibody tests work after seven to eight days from infection, as the body takes that long to produce the antibodies that can be detected. “By around day 12-13 from infection, or around the time symptoms are established, the test is very accurate, with a specificity of 99.7% and sensitivity of 95%. As the disease progresses, accuracy improves,” says Halasz.
The company has also received many expressions of interest from hospitals and research groups. Cellmid itself has been impacted by the COVID-19 crisis and has cut back working hours for some staff. “The board also offered to pause their fees in support of the company.”
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