Memphasys (ASX:MEM) at Meet the CEO, Life Sciences 3 March 2022

 

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Memphasys

On 3 March 2022, Alison Coutts, CEO of Memphasys (ASX:MEM), talked about the potential of its product in improving outcomes in in-vitro fertilisation and the clear advantages over existing technologies in this space.

Full transcription below.

 

 

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Moderator: Now let’s hear from Memphasys. The great thing I love about the life sciences sector is that good science never dies, it just evolves into something that’s a little more deliverable. If you go way back to the ’80s, there was a company called Gradapor [SP], one of the first life sciences companies ever to go public on ASX. In a way, it’s still around. That’s Memphasys’ technology, but in much better hands management-wise, and also with a much more focused application of the technology. And Alison can set us straight if I’ve misrepresented how good the technology once was. Alison’s very versatile in her career. She spent a long time with the American engineering firm Bechtel, from San Francisco. She was also involved in executive recruiter with a firm that pioneered that space, Egon Zehnder. I first met her when she was pioneering investment banking focused on life sciences with a firm you may remember called EG Capital, which obviously trailblazed this whole sector. You can’t keep a good entrepreneur down. EG Capital moved on, but Alison went on to help create a number of companies which are still around, one of them called Mariposa, which you’ll probably hear about are doing some good things in the respiratory disease space. Micro X, I hadn’t realized that she was one of the hidden geniuses behind that company, which IMEX1 I can encourage you to check out, the next big thing in X-rays.

But she’s here to talk to you about Memphasys, which was Gradapor’s technology, but upgraded for something really useful. Amongst other things, we may have the next big thing in IVF, thanks to Alison, and a pretty smart laboratory at the University of Newcastle. But here to tell us all about it, please welcome Alison Coutts.

Alison: Well, thanks, Stuart and Mark. I have a show and tell. Nothing like a real…

Man: If you need a mod to help, yeah, just step in.

Alison: Yeah, no, no, I’ve got to unwrap it so that you actually see. And thank you, by the way, for getting me to talk today. It’s a pleasure. So, here is cartridge and boxes, and this…these are here for making babies, right? So, these things are in the foil, I actually did a pair of scissors and cut them, this is the cartridge…all very, very, carefully wrapped, proper manufacturing process, absolutely sterile. And I’ll tell you about it more in a minute, but I’ll just get it all together. Oh, you know, nothing like a real medical device. This is our Felix device. Felix is a boy’s name, it means joy. This is joy to the parents. And you put this in there, I’ve got an electrical lead, all of that’s in there, and you put media and semen in there, six-minute automatic process, flashing lights, caching, at the end of it you pipette out, and you’re ready to put that into the egg that’s just been harvested to make a baby. So, that’s our flagship new device. I’m really very excited about it, as you can probably tell.

So, I’ll just give you the history. And I’ve got too many slides here, and we’ve actually released these to the ASX today, so you can look at these at your leisure, and I’m going to zoom through these and just pick out some of the more pertinent bits. But going back to about eight years ago, I was executive chair, I had just become the executive chair of this company, and it was in a mild state of mess, too. Well, that’s an understatement. And anyway, we fixed it up, but there were two great things that happened at that time, two marvelous things, even though it looked pretty dire. Apart from lack of funding, there were all sorts of other mess, but I’m not going to focus on that, two great things happened.

We looked around, and we saw a product on the shelf that many years before, it was a predecessor to this thing, it had been used to make babies first at Sydney IVF, and then at Westmead. And it had been put on the shelf because this company was known as a bioseparations company, and my predecessors thought they could do stuff with blood and get proteins out of it, bioseparation, but they had to re-engineer this device, and it was all a bit, I think, maybe a bit hard, so they left it on the shelf. Being an engineer, I thought, well, we can do something with that. I mean, goodness gracious, that’s pretty exciting, it’s the world’s first sort of technology. And the other great thing that happened at that time was that we met Professor John Aitken, at the University of Newcastle. Ex-Cambridge guy, ex-person who was involved with the Scottish people at Dolly the sheep, and all of that. He’s an absolute international guru in anything reproductive, biology in particular, andrology, which is the male’s side of things.

So, two things that came from this. We now have developed this device, and it has now started sales, all right? So it’s in early markets, where they don’t need anything regulatory-wise, Canada, New Zealand, India, and Japan. But we’ve also done research sale in China, and we’ve just started a clinical trial with Monash IVF, who are our clinical partner as well. But we’ve also got a great portfolio of fabulous programs, diagnostics, devices, media with John Aitken. And you might say, well, you know, what about focus? Well, of course there’s focus. We actually support seven people up at the university, we get all the R&D tax refund on that expenditure, too, which is great, very carefully run projects. John’s a fantastic project manager, we employ him half-time as a Mamphasys employee now. And these things all have a life of their own, and I find it hard to work out which one’s going to be our next great product because there are a few beauties.

I’ve got a presentation here that is going to be too much for me to go through in 15 minutes, but we put it up on the ASX today, and you can look at that at your leisure. So, there’s also a rather complex slide that’s going to come up, that is going to be a bit hard for you to see. But anyway, I’m having trouble with my…

Woman: Sorry…

Alison: Thank you. Yeah, so here we go, a bit about John Aitken there. Read it at your leisure, but he’s extraordinary. He’s published over 650 research articles, cited 55,000 times, huge impact, ranked number one in the world in sperm biology and fertilization. And all of this life experience, this extreme level of knowledge and expertise, and particularly in biochemistry, he’s actually giving to us, so you know, that explains why we have a portfolio of products with him. And as I said, our lead product is the Felix device. So, this is a pipeline slide, and I’m sure that you people in the audience will find difficult to see in the degree of detail that is required, and you can look at it in your leisure. Number one product at the moment is the Felix device for sperm separation. I might add, and we’ll view some slides later, the other techniques they use in the clinic right now are each half an hour, multi-laborious laboratory processes, different pots and centrifuges, and whatever else, versus six minutes all in one pot, all done, ready for you. And no DNA damage, either, from ours, versus when you centrifuge. So, that’s the Felix. The oxidative stress one, that’s in development, but I think that is an absolute [inaudible 00:09:02.704] we can pull that off with the biochemistry, and I think we will.

We’ve got the Samson…Samson. Okay, so we’re doing some trials we’ve done in racehorses and in standardbreds, because we do animals as well as humans, anything reproductive biology-wise, and we did that to have a look at the pregnancy prediction, using semen analysis from dismounts, dismount samples from racehorses, but we also did standardbreds, trotters used for artificial insemination. I can’t say much about that yet because we haven’t actually given the results to the market, but we will shortly. But what I say in this slide pack is that we’ve got two products coming out, I think, and one of them’s…well, they’re both pretty exciting. And we’ve got a semen transport device that keeps the semen at room temperature. You know, if you freeze any sperm, it’s not good. And one of the indications is for a diagnostic for humans, and the other is artificial insemination for animals. Very, very interesting stuff. And we’ve also got cryopreservation programs. So, that’s the tip of the iceberg, actually. We’ve got more, but these are the products that we can see that are pretty exciting.

Human IVF market, I’m not going to spend time on this slide, we all know that it’s growing massively. What you might know is that males tend to be 50% of the problem. A lot of people think that’s females, but actually, it’s two to tango, and males also have some factor in there. And also, as parents get older, male and female, bad, either or, and both is even worse. And just because you go to IVF doesn’t mean to say you’re going to have success. It takes at least two times, I’ve known people to go ten times. And there’s a lot of way to go to improve the process, and this is just one of the things we’re doing, which I think will improve IVF outcomes. The animal reproduction market, that’s massive as well, and artificial insemination is massive. There’s also, you probably don’t know, but racehorses are not allowed to be bred artificial insemination-wise, but that’s a huge industry in its own right. So, we’re across all this stuff.
What happens is that we have sometimes animal models. We might start in a horse, we might start in a cow, and then we go and work it out for a human. When you go to the market, the people who are the companies that play in the market, they tend to actually go with strictly human or strictly animal, but the biology all starts, like, across species, so the animal reproduction market is very large as well.

Here’s our Felix device. And you’ll see [inaudible 00:12:15.787] and it’s patented, rapid, easy, automated. The two main processes it’s put against are density grade and centrifuge, or swim up. They’ve each got their issues. First of all is speed, they’re each 30 minutes, they involve multiple steps, laboratory processes. Ours is very gentle, quick, six minutes, doesn’t cause DNA damage. Anytime you centrifuge anything, you’re going to cause DNA damage. And there’s also a wide amount of semen we can treat, so guys with small sperm counts, low motility, ie. sperm don’t move well, viscous samples, even frozen ones, and the frozen ones particularly are not good with the current processes. The way that this thing works, I’m not going to spend long on this slide, you can have a look at your own time, there are a couple of membranes here, that’s a restriction membrane, so a patented hydrogel we’ve done. And this separation membrane is a five micron, just large enough to let the sperm through, keep out the nasty white blood cells and other debris. And we have electric forces [inaudible 00:13:42.905] bringing the sperm across, because guess what? The sperm’s got negative charge, the good sperm. And this is what John Aitken told my predecessors, and that’s our basis of the whole thing. So, we separate on the basis of negative charge, and also size. So, that’s really, really crucial.

So, we’ve got a lot of points in our favor with respect to our commercialization. We’ve already made a couple of sales, one to a very high end but small Indian clinic who tested our device, and actually tested against some embryos that they made through the other processes, and they determined that ours, from Felix, were the nicest embryos. So, they’ve actually made a commercial order. And we’ve also got a sales order for research in China, we’ve got clinical trials starting with Monash IVF, who are our clinical partner in Australia. That’s very exciting. That is…I mean, it’s started, and there will be more said about that very shortly. And that trial is expected to go for a year, patient recruitment very, very close, going to happen soon. It’s going to be about demonstrating safety and performance of the device, and to generate enough data for making a TGA submission.

We’ve got the in vitro testing around the world, with global key opinion leaders, 15 of them or so. We’ve got some really nice data coming on through, we’re going to write a paper about it, and we’re going to be doing more embryo trials with some of the important clinics. And we’re planning to not only publish, but also speak at conferences about what we’ve got. And as I said, we’re starting sales in low regulatory markets. And I already told you about the first four markets, and they represent 24% of the global market, and of those, two are particularly important, Japan and India. Those two are, like, 15% and 10% of the market. And then combine that with China, the largest single market for IVF in the world, and we’ve got key opinion leader clinics in China, and we’ve done a research sale here. We’ve got a lot of the market already covered, and we’re going for a rapid approval in China called the Green Channel, and hopefully that will come our way.

The next product I just want to talk briefly about. It’s a bit of a busy slide, sorry about that, but it’s all about oxidative stress. I mentioned that John’s a biochemist, John Aitken, he’s extraordinary, and he’s been banging on about oxidative stress. We’ve been talking about oxidative stress to our Toronto clinic, they’ve got whole programs about oxidative stress. Anybody who works in reproductive biology knows about oxidative stress, it’s a major problem that males and females face, one of the reasons they don’t get pregnant, its a reason for stillbirths, it’s a reason for problems with ladies who’ve got endometriosis, all sorts of conditions. Guys who’ve got low sperm counts, who’ve got issues with getting their partner pregnant, it’s usually oxidative stress. Where does it originate? Mitochondrial energy chain gets worse as you get older.

But oxidative stress is also probably what’s going to kill us all, it’s involved in just about every disease state, you know, cardiovascular, cancer, diabetes. But we’re not going there for the moment, we’re going to keep just reproductive. But if we could get a diagnostic, a point of care diagnostic that is easy to use, in one pot, and that’s what we’re working on, then this would be huge. Because most people can’t even diagnose it properly, they need [inaudible 00:17:48.600] in the lab and all of that. We think we’ll be able to do this. And then once you actually diagnose where it is, when it happens, how big it is, then you’ll work out how to deal with it. And it’s not just about taking antioxidants either, because it’s no good just taking antioxidants, you’ve actually got to make sure you’re suffering from oxidative stress. If you don’t suffer from much oxidative stress, and you make a big dose of antioxidants, you’re going to actually give yourself reductive stress. So, this is a big one for us. I’m not saying that we’re going to actually crack it, but I think chances are that we will. We’ll know in six months.

The Samson device, I already gave you a little introduction about it. We’ve talked to the market about it, about the horses, I think that there are two products emanating from this. And interestingly, there’s a total motile sperm count, and the pregnancy prediction is interesting, and I think that there’ll be a use for it, but this is about horses. But with the total motile sperm count, we can, I think…yeah, this is new. This is something we haven’t actually told the market yet, and we’re going to actually put out a release, but just recently, John’s worked out that this same test can be applied to human semen, and it can be potentially created into an in situ at home diagnosis of how your sperm count is. And motile sperm count, not just total. The motile ones are the ones you want. At home, in the privacy of your own house. And then if you’ve got a problem with it, then go and see a specialist. But a lot of guys are a bit, they want to do this privately.

And then I talked about the semen transport device, we call it SEMPORT for now, and this is a way to keep the semen at room temperature. We’re well on the way with developing that one as well. Two applications, one is as a diagnostic for human semen to be transported across geographic distance, where the male can give you a sample, and then it can be assessed by a laboratory, full semen workout. If you freeze it, then you muck up the motility, and you muck up, you know, the various other attributes. We’ve already managed to get the thing lasting for three days, and I think we’re heading hopefully for seven. And if you can scale this up, you would also have a device, potentially, for artificial insemination, without having to freeze the sample, and that would be huge as well.

And then as I said, you know, the cryopreservation, we’re working on that. The Felix device, this little thing being shown, early days yet, a few samples, but for cryopreserved semen samples, and there are many for people who’ve got issues with their sperm, you know, who are worried about future chemo treatment, or maybe the partner is remote, or maybe they’ve got surrogacy, a donor, lots of frozen samples, and the current processes don’t handle them very well. And besides that, cryopreservation itself, that media has been around for at least 50 years, and glycerols even then sometimes use egg yolk. We can do better than that.

So, there are our projects. Corporate snapshot, you can read about me and my board, it’s all very good. A nice set of experience and backgrounds in our board. ASX, you know, the market’s a bit disappointed with us. I know it’s all short term, they’re worried about when we’re going to make the next sale. Don’t worry, it will happen, but there’s a whole lot more than just another sale. So, this is what we’re about. Our little caption is “Better technology, more life.” You see up there, it’s about all of those different species, and there’s a lot that we’re excited about. So, I won’t go into it again, you can read it at your leisure, but I open up to questions.

Moderator: Thanks, Alison. A question’s come through mainly regarding, I suppose, the cost of [inaudible 00:22:15.850] cost of conventional and current [inaudible 00:22:20.374] comparison to the Felix program, for example, what is the end cost involved for the…sorry, the cost involved for the end client, I guess comparatively to…

Alison: Oh, okay. So if you are going through IVF in Australia, you’re probably looking at $10,000 for a cycle, and the first one, I think, is supported by Medicare. Now, that includes all the drugs and the doctors and what have you, and if you add in pre-genetic screening and all that, it will be more. Our thing is about the disposable…this is a disposable, throw it into biological waste at the end, one semen sample, one cycle, all right, next, it can’t be contaminated. This thing, it’s like the coffee pods, you know, Nespresso, you virtually give this thing away, and then you have a whole lot of these, it pays for itself very quickly. How much does all this cost? Well, I’m not going to answer it directly because each market will be different, but we know that we will be cost-competitive with…I mean, I’m not saying that right now DGC versus swim up, when you add labor and materials and whatnot, it’s probably at least $80 Aussie, and then over in the States it’s $80, $100 U.S. A little competitive product, there’s an automated swim up thing called ZyMot, they’ll be probably charging $200 U.S. for a single shot. We know that we can be competitive with all of that, and so it’s not an issue.

Moderator: Okay, great. Thanks. Just one last question as well, “Hi, Alison. Great presentation. Do you think your products are applicable for conservation?

Alison: Ah… Yes, I think it is. Yes. We haven’t done anything about that because we’ve been busy, but yeah, I’d love to work with some zoos. Because, you know, well, I love what I do, and I, this thing…sperm is sperm. They got the negative charge on the surface, the bulls, they’re eight microns, the horses and the humans, five microns, but you can get membranes that are the right size. I mean, you optimize your media, you can optimize your electrochemistry, what can’t you put through? I think we could do other species as well. That’s about how much we can do.

Moderator: Fantastic. If anyone had any questions? All good.

Man: Well, sorry, I’ve got a question for you before you go. So, the strategy has been, basically, picking individual markets, and find key opinion leaders in those markets who can see the utility of what you’ve created there.

Alison: Yeah.

Man: How’s that been going in the last couple of years, given COVID.

Alison: Oh, look, we’ve had stops/starts with COVID. We’ve got one key opinion leader who’s fabulous, he’s in France, and he’s an oxidative stress guru with John, and he hasn’t been able to start. He’s very disappointed, you know? It’s just, like, it’s been mammoth. We’ve just had a German one start, and I’ll be very interested, and say, you know, wonderful. We’ve had Cornell Weill in New York just bring results in, terrific. Boston IVF, just starting, you know? The Sweden results are in, we’re just assess-…looking at them, Japanese results, done, you know, Indian, done, lots of different markets, done, Monash IVF, done. We’re putting a paper together about what results we’ve got to date, and we can’t actually wait for everybody because, you know, I mean, COVID and all of that, enough, enough. We’ve got enough data now, I think, pretty well much to go, we’ve just got to analyze the Swedish data.

Moderator: Well done. Please thank Alison Coutts. It’s a whole new definition of seed capital.

Alison: Baby maker.

Moderator: If you need some sperm samples, there’s a few guys in the room here.