Ann: Strategy Update, page-3

Something to Read:
https://www.ntnews.com.au/business/*/scopos-powerplays-asx-health-stocks-end-the-week-ahead-despite-freaky-inflation-data/news-story/e6cb61a9db52c9ad752c34b48e914584

LBT Innovations targets big pharma

LBT Innovations (ASX:LBT) published a strategy update this week. Power says LBT is targeting big pharma with their high-tech instrumentation enabling the rapid analysis of culture plates.

"They're having some success on that front so we think it is one worth keeping an eye on," he says.

LBT has two core products with their first the APAS Independence, targeting the clinical pathology market. Their second product the APAS PharmaQC, targets environmental monitoring for pharmaceutical manufacturing customers.

Power says through the use of AI technology, the products automate and improve the reading and reporting of microbial
growth on culture plates.

"A traditional microbial quality control lab is largely manual and prone to human error, with high volume testing required by regulators," he says.

"LBT’s products streamline the entire process, improving operational efficacy, quality of results and data integrity."

Power says LBT has provided a simple analysis detailing the revenue per product which suggests up to $1m revenue per APAS sale over 5 years.

The company expects the revenue split to be ~60/40 between upfront cost/one-off costs.

One of LBT’s competitors, Nasdaq-listed Micro Biosystems estimates the TAM being 10,000 instruments representing sales of US$5bn," he says.

LBT raised $4.5m in a rights issue, priced at $0.005 in December 2023 to support expansion into the pharmaceutical microbiology market.

In addition, there are in-the-money options set to expire in September 2024 potentially raising up to $2.1m and in November 2025 potentially raising $3.3m.

Power says upcoming catalysts for the company include AstraZeneca expected to complete internal validation of APAS PharmaQC in Q1 CY25 as a precursor to their planned roll out commencing in Q1 CY25.

LBT is also is in talks with Thermo Fisher (exclusive distributor into laboratory market) to streamline and consolidate servicing of all its instruments.

"Other top 10 pharmaceutical companies are expected to engage with LBT following the AstraZeneca success and early sales to Perth based NovaCina and Thermo Fisher.

Power says the board and management have skin in the game, owning ~20% of LBT.