Morning, welcome to Microba Limited's fourth quarter of financial year 2023 quarterly investor presentation. From the company today, we have the Chief Executive Officer, Dr. Luke Reid, and the company's Senior Vice President of Therapeutics, Professor Trent Munro. Before I hand it over to Luke and Trent to go through the presentation released on the ASX this morning and up on your screen shortly, I'll just remind you that you can submit questions through the Q&A button at the bottom of the screen, we'll go through them at the end of the presentation. I'll hand it over to Luke to get started. Thanks very much, Luke.
Thank you, Simon, and good morning, everyone. I'm very pleased to share an update on our progress following the close of the quarter ended 30 June, 2023. As always, I'll kick off by stating that our investment thesis at Microba remains unchanged, that the trillions of organisms that live in your gut, known as your gut microbiome, represent one of the biggest untapped opportunities to improve human health. This will see microbiome testing and therapeutics become a routine part of healthcare, and at Microba, we believe we have the best technology in the world to unlock this. We're continuing to execute on establishing a dominant global position in both microbiome testing and in therapeutic development in the microbiome to capture that opportunity. Quickly, for anyone new to Microba, our commercial model to capture this market opportunity is summarized here.
We deliver testing services globally to clinicians, consumers, and research clients, together with market-leading distribution partners. These services, now for five years, have been building our large proprietary microbiome databank with consented and de-identified customer data. We've been mining this large databank to now discover and development novel therapeutics to ultimately execute pharma out-licensing transactions on those assets. Microba is a data-driven biotech company. We are commercial stage and already delivering global revenues through our testing services. We continue to deliver strong year-on-year revenue growth. We've established partnerships with market leaders across our business, including global medical diagnostics leader Sonic Healthcare, Europe's largest medical diagnostics company, SYNLAB, and New York Stock Exchange-listed synthetic biology leader, Ginkgo Bioworks. We believe that we've now established the most valuable microbiome databank in the world, and from that databank, our proprietary.
From that proprietary databank, we've established three therapeutic programs, with our first lead drug candidate targeting ulcerative colitis, a major form of inflammatory bowel disease, now progressed into a phase I first-in-human clinical trial. This is a fast-growth emerging market, which we're capturing with world-leading technology, supported by peer-reviewed publications and our two co-founders, who are leaders in the field. Underpinning all of this, we have a truly world-class team, including Deputy Chair and Chair of our Medical Advisory Board, Professor Ian Frazer, one of Australia's most distinguished clinical scientists and the inventor of Gardasil, the cervical cancer vaccine, which now does over $7 billion in annual sales for Merck, and our Head of Therapeutics, Professor Trent Munro, who's joined us on this call, who joined us last year from California-based multinational biopharmaceutical company, Amgen.
Upfront, I want to highlight some of the recent milestones and key achievements from the quarter. Firstly, for our testing services, we signed our first distribution agreement with major shareholder and strategic partner, Sonic Healthcare, to distribute something new, an advanced infectious disease test, which we call MetaPanel, which opens up a new market, which we believe could represent a significant commercial opportunity for the company. We also continued to expand access to our testing across Europe, with Europe's largest medical diagnostics company, SYNLAB. We added Brazil during the quarter, opening up the largest country in South America, adding to the additional six countries recently signed with SYNLAB, with most of them already operational and with first sales delivered.
We continued to see strong uptake of Microba's next generation test range, MetaXplore, which launched in Q3, and this was seen in quarter-on-quarter growth, exemplified by 87% growth in test sales between March and June. Finally, for our therapeutics programs, we successfully commenced the phase I first-in-human clinical trial of MAP 315, our lead drug candidate under our inflammatory bowel disease program, formally transitioning the company into a clinical-stage drug development company. Firstly, I'll take you through an update on the progress of our testing services, which is driving our global revenue growth, and then switch over to update on the advancement of our therapeutic programs together with Trent. First, a reminder of our strategy.
We're building a leading microbiome testing company through a globally scalable distribution partner model, and that distribution partner model enables us to work with our partners to access our platform, launch and deliver a microbiome test powered by our world-leading technology. Closing out the year, we achieved strong growth in our distribution base. We launched our MetaXplore healthcare test, and as guided by the company, we saw that translate into growth in the second half, and importantly, laid strong foundations for growth into the new financial year. Across the first half of this year, the company's messaging regarding the testing services and revenue growth was unwavering. We were expecting another year of positive revenue growth weighted to the second half of the financial year.
I'm pleased to update that we delivered on that, with AUD 3.26 million in revenue for the second half, representing 52% growth half on half. For the quarter, revenues were up 21% year-on-year, driven by Microba's personal testing business, up 35%, through growth in both domestic and international testing. Looking at the full financial year results, we closed out with another year of growth, reaching AUD 5.4 million in revenue, again, driven by Microba's personal testing business, up 23% for the full year, driven by both domestic and international testing. Cash receipts for the year totaled AUD 6.33 million, representing 37.5% growth upon the prior year.
Given the delayed launch timing of our MetaXplore test range and our slower than expected timing of new countries and distribution partners becoming active, this is a strong result and highlights the growth opportunity for the full year ahead, with a full year of MetaXplore growth in Australia. Commercial progress with our 15 countries signed during the financial year, most of which were only signed and operationalized in the third quarter. Unlocking the commercial opportunity with Sonic Healthcare, with the distribution of first tests here in Australia, and progressing opportunities into their other major markets. Zooming out, I want to put these milestones into perspective of our strategy. To succeed in building a leading microbiome testing company, there are two core ingredients: product and sales and distribution. Firstly, on product, MetaXplore launched in Q3, and MetaPanel is scheduled for launch with Sonic in the next quarter.
We're at the forefront of this field with market-leading testing products, positioned to deliver strong value and clinical utility, and addressing large patient populations with significant unmet needs, which is outlined on this slide here. The MetaXplore test range, which launched in Q3, significantly advances the clinical utility of microbiome testing in a healthcare setting, and we're seeing continued strong uptake in Australia. This test combines diagnostic gastrointestinal health biomarkers together with Microba's advanced metagenomic gut microbiome markers, to deliver the most comprehensive GI testing solution available on market. This has all been built hand in hand with clinicians, and the test targets a large addressable market in patients with what's known as a disorder of the gut-brain interaction related to the bowel, which impacts over 30% of the population.
We also have observed clinicians using the test with patients that have a chronic health issue, which may be influenced by their gut microbiome, which has been estimated at over 20% of the population. The test represents a significant market for Microba, both domestically and internationally, with over 150 million addressable patients. We've seen strong uptake following the launch, exemplified in that 87% sales growth between March and June, and further exemplified with 480% growth on the prior quarter for registered healthcare professional accounts to access Microba's MetaXplore testing. We're excited about the domestic and international growth opportunity ahead, and the impact that this test is already having on patient management. I was pleased to announce during the quarter that, firstly, we had signed the distribution agreement, the first distribution agreement, following our recent strategic partnership with Sonic.
Secondly, that there was something new as a part of this relationship. Together with Sonic Healthcare, we will be bringing to market an advanced infectious disease test, which we call MetaPanel. We've been developing this test for a number of years. It employs Microba's advanced metagenomic technology to comprehensively diagnose infectious pathogens such as bacteria, fungi, parasites, and viruses, together with assessment of virulence factors and antimicrobial resistance genes to support precise clinical decision-making and treatment decisions. The test helps clinicians to avoid multiple low coverage and sequential diagnostic tests that can impact treatment outcomes, particularly for high risk and immunocompromised patients.
Microba's worked intimately with clinical microbiologists and infectious disease experts to design the final test and support clinical validation, including the Sonic Healthcare Douglass Hanly Moir team, one of the most highly respected and high quality pathology service teams in Australia, and leading clinician, Professor Paul Griffin, who's Director of Infectious Diseases at the Mater Hospital in Brisbane. Ultimately, we believe MetaPanel and its technology has the opportunity to create a new standard for gastrointestinal infectious disease pathology, and could represent a significant commercial opportunity for the company. It's estimated that there are over 16 million patients globally per annum, including 100,000 of those patients in Australia, which are high risk and susceptible to gastrointestinal infection, who receive routine testing for pathogens in a hospital setting. That's the initial beachhead market for the technology, and with further opportunities beyond that, once we've established that testing to market.
Work in the U.S. has outlined a well-established hospital direct billing opportunity in North America, and a path to CPT coding and reimbursement. I look forward to sharing more about the MetaPanel opportunity, the clinical and commercial application that it presents, and the commercial strategy over the coming quarters as we move to launch this test with Sonic Healthcare. Secondly, regarding sales and distribution execution, that second ingredient. Over the financial year, in particular in the second half, we made great progress here, which translated into revenue growth. We have a leading bench of international distribution partners, Sonic, SYNLAB, Genova, and G42 Healthcare provide us with strong access into major global healthcare markets. With those partners, we now have access into 35 countries.
At the beginning of the financial year, we'd activated operations into four of those countries. The company guided that we expected to double that distribution base from four countries to eight over the course of the financial year. I'm pleased that we were able to significantly exceed that, achieving the signing of 15 countries, and the operationalization of 13 of those countries with first sales delivered. In FY 2024, we expect Sonic Healthcare to contribute to distribution, both domestically, through our first agreement signed with Sonic Healthcare and the Sonic Healthcare Australia Pathology Network, and through our plans to execute additional agreements across their major markets internationally. Here, I've summarized an update on our progress with our distribution country, distribution partners and countries.
We have a clear partner success program that we're progressing partners through, for each partner and country, from Stage one, planning and contracting, through to Stage four, execution and growth. We made further progress across the quarter. We signed Brazil, as I mentioned before, opening up the largest country in South America to Microba. We signed our first agreement with Sonic, set to operationalize and launch next quarter. We progressed Italy and Romania into the execution and growth phase. We'll continue to keep everyone up to date as we make continued progress in distribution with our leading venture partners. In addition to our growing testing revenues, these services also generate that high-value data, which enables us to discover and develop novel therapeutics. We're making strong progress across all three of our therapeutic programs.
For people new to Microba, this part of Microba's business has really taken shape since our ASX listing last year. During the quarter that just closed, transitioned into a next level of maturity, moving into clinical development. Also, the sector is maturing in parallel, and during the quarter we saw the second FDA approval of a live microbiome drug, which was also the first approved oral drug by a company called Seres Therapeutics. Microba is in a prime position at the forefront of microbiome drug development, through our ability to pinpoint a therapeutically relevant biology using our data-driven platform to develop these precision microbiome therapeutics. We have a pipeline that's now delivering compelling biology with distinct mechanisms, strong preclinical safety, and we've demonstrated the ability to scale manufacturing and produce a drug product.
Matching this, we have a strong multidisciplinary team with experience from across the globe, and a range of valuable global partners supporting our therapeutic development efforts. On that, I will now hand over to our Head of Therapeutics, Professor Trent Munro, to take you through an update on our three therapeutic programs. Trent, over to you.
Thanks for that, Luke. Just a reminder for, again, those that are new to Microba, as Luke mentioned, really at the heart of all of this is our data-driven platform for drug discovery from the microbiome, underpinned by our world-leading microbiome analysis technology and that proprietary data bank. This platform is now generating multiple potent therapeutic candidates. On this slide, you can see an overview of how we go from human first data in that data-driven platform to go from a large proprietary population data bank, all the way through to therapeutic leads that we can put into preclinical assessment and then take into human clinical trials. That's really the point of maturity of where we are now. When we look at our pipeline and where we are with these, we have three key programs.
These span inflammatory bowel disease, cancer immunotherapy, and autoimmune diseases. Our inflammatory bowel disease program is targeting the novel therapy for patients suffering from ulcerative colitis. During the quarter, we completed manufacturing of MAP315 with Bacthera in Europe, and all activities were finalized to initiate and dose patients for our phase I clinical trial. I'm pleased to announce that we have completed dosing of 50% of the participants in that trial, and we expect to announce the complete trial results in December this year. This formally transitioned the company into a clinical stage drug development company. This is a significant milestone for Microba, which encompasses many years of work, and demonstrates the drug development capability which has been established at Microba to progress novel microbiome drug candidates from discovery, guided by our data-driven platform, all the way through to an orally delivered drug product.
dosed in a first-in-human clinical trial. For our cancer immunotherapy program, we are targeting the development of a therapeutic to improve response rate, improve response rates in cancer patients receiving immune checkpoint inhibitor therapy. As many of you will know, that's really changing the paradigm of standard of care in cancer. Following the compelling first animal model results we announced in Q3, the team has now moved quickly in progressing these immunological experiments further, including additional animal model studies, with additional results expected to be delivered over the next two quarters. For our autoimmune disease program, in partnership with New York Stock Exchange-listed Ginkgo Bioworks, we are targeting three autoimmune disorders, including lupus, psoriatic arthritis, and autoimmune liver disease.
Following the first positive results across multiple in vitro assays that we delivered in Q3, this discovery program continues to progress on schedule towards completion of Stage One activity before the end of the year. Each of these programs represents a significant commercial opportunity to shareholders, and I'm excited by the data we're generating and the potential impact we can have on individuals suffering from these debilitating chronic conditions. I want to give a little bit more color to our pipeline and our strategic decisions here. At Microba, we are right at the forefront of this field with our world-leading technology to use human data-driven insights to unlock compelling therapeutic biology with distinct mechanisms. We've demonstrated the attractive preclinical safety profile, and this is underpinned importantly by a robust and growing intellectual property portfolio protecting these assets.
We've also demonstrated the ability to scale GMP manufacturing, which is critical to the success and has been a challenge for others in the field, particularly those going after complex consortia-based products. We're now seeing disease and modality-relevant deal precedents ranging from AUD 500 billion up to AUD 11 billion , depending on the stage of development. This is really exemplified by the opportunity we see for MAP315 in inflammatory bowel disease, both in terms of the market size and the novel biology that may be achieved by a microbiome-based product that can address gaps in current treatments of addressing epithelial and mucosal healing. Particularly for those who are new to Microba, I'm not going to run through the next three slides, but they're in the deck, so you can get further information on the technical information underpinning each of our programs.
Alongside our progress, as Luke mentioned, we saw an important additional catalyst for the microbiome sector in April. This included the second-ever FDA approval of a live microbiome product, a product called Vowst, which was developed by Seres Therapeutics, which is also importantly the first approved orally dosed microbiome product. These live microbiome drugs are termed Live Biotherapeutic Products, are an entirely new class of drug. Now we have two FDA-approval drugs that importantly clear the path to market in what we consider to be the first generation of these products based on fecal donor materials, and they're also targeting an unmet need in infection, and that being recurrent C. difficile infection.
At Microba, we really believe the big opportunity is in rationally developed microbiome-derived drugs, which can be manufactured at scale to treat millions of patients globally and address major unmet needs in chronic disease settings. Our therapeutic assets are at the forefront of this. With a clear regulatory path in our transition into the clinic, we believe this puts Microba in a strong position to develop these therapeutic assets for partnering and potential out licensing transactions. To close out the therapeutic update with some recent examples of transactions in the inflammatory bowel disease and microbiome space, we have some examples on this slide. During the quarter, Merck announced a $10.8 billion deal to acquire a company called Prometheus Biosciences. There's important parallels with what Prometheus' strategy was and Microba.
Not related to the microbiome, but related to the fact that this is a novel inflammatory bowel disease drug that has underpinning human data-driven information spanning inflammatory and autoimmune related indications. Very appropriately, they received a deal with a large valuation for those assets. This demonstrates the value the industry is placing on novel drugs, addressing unmet, major unmet needs for inflammatory bowel disease with a compelling data-driven development base. Again, with this clear regulatory path to market and growing appetite for the next generation of therapeutic assets underpinned by data-driven discovery methods, and Microba now in clinical development, I'm excited by the impact we can have on individuals suffering from chronic diseases and the commercial opportunity for shareholders. I will now hand back to Luke to talk about the milestones ahead.
Thank you, Trent. Closing out another year of growth and therapeutic advancement, what's ahead? We executed on all milestones from last quarter and have a range of important milestones over the next 6 months, which will advance the company and unlock value for shareholders. As at 30 June 2023, we had AUD 32 million in the bank, so Microba remains in a strong position to execute its growth strategy. I'm very excited and optimistic about the company's future, and in particular, what will be unlocked for shareholders over the coming period. I'll stop there and hand back to you, Simon, for questions.
Perfect. Thanks, Luke. First question: could you please explain the improvements in MetaXplore compared to the previous generation products? What explains the 87% increase in sales since launch?
The 87% growth is the growth from the prior quarter. For me, that just shows the work that we've done in making sure that we deliver the product, that ultimately has clear clinical utility, that clinicians have been asking for a number of years, and that we've now brought to them. That product is distinctly different from the Microba Insight product, which was the first product that we launched to market in 2018, which provided information for individuals to be able to manage their health manage their microbiome health and broader health through targeted dietary change. This test includes diagnostic markers, is specifically designed for healthcare professionals, and directed to those individuals that have these chronic disorders of the gut-brain interaction.
Very specifically, a healthcare professional product that's been built hand-in-hand with clinicians over a number of years. The feedback that we've gotten from the market is very strong, that we are delivering a clinically useful tool that can be used to support better patient management for those individuals suffering those chronic conditions.
Great. Thanks, Luke. Following the first distribution agreement with Sonic in Australia, what can we expect next for the partnership?
First, we're very focused on the launch of MetaPanel here in Australia, scheduled for next quarter. In parallel, we've been progressing conversations across multiple of their major markets, including Germany, Belgium, the U.K., and into North America. We're excited by, firstly, the opportunity for MetaPanel, particularly in North America, and what we can achieve with them. They're a world-class partner, and we continue to experience that, and we're making great progress together. What we're focused on first is delivering here in Australia, and then opening up those further international markets together with them.
Great. Thanks, Luke. The MetaPanel product is opening up a new market. What more can you say about the opportunity and what it means for the company?
To put it into perspective, the current standard of care for infectious disease pathology testing are qPCR panels for pathogen detection, and then culture testing for antimicrobial resistance. The largest qPCR panel has around 22 common pathogen targets, so it covers only a small fraction of potential pathogens someone could be infected with. Culture testing for antimicrobial resistance is labor-intensive and slow. For high risk, and by extension, immunocompromised individuals, infection with a GI pathogen presents a very high risk in that setting. We're looking at patients, which would include bone marrow transplant, solid organ transplant, broader hematological cancers, cancer patients receiving chemotherapy, and then that opening up a larger high-risk population in dialysis, long-stay ICU. There's a lot of opportunity there.
Let me walk everyone through what a clinical use case would look like. Let's just say an individual diagnosed with leukemia, scheduled for bone marrow transplant. First, an important note, that procedure in the U.S. costs between $100,000 and $300,000 U.S , so a very costly procedure. In preparation for the transplant, you undergo a range of pre-admission tests, including screening for whether you have a GI pathogen, which could cause complications, particularly after taking immunosuppressive drugs to undergo the procedure. They do a stool test, they check for that small set of pathogens, get a negative result, and undergo the procedure. Post-surgery, that individual finds themselves with extreme diarrhea, which is quite common, and other complications, which causes the clinicians to really quickly scramble to try to diagnose the pathogen.
They'll employ multiple qPCR tests covering different targets, and then often reflex into culture assays to define which antimicrobials you can effectively treat that pathogen with. This can take them a week or more, and for some patients, that can be catastrophic, particularly if there's complex antimicrobial resistance. This is high risk for the patient and very costly for the hospital and insurer. Inserting MetaPanel in that pre-admission screening, we can cover a full array of hundreds of pathogens, virulence factors, antimicrobial resistance genes, all up front in one test to catch and treat any GI pathogen with specificity. That same value proposition of being able to cover it all in one test also applies to a range of other high-risk hospital inpatient settings that I outlined before.
We believe all of that represents a potential significant commercial opportunity for the company. For these high risk and expensive clinical scenarios, our advice to date indicates also that this test is likely to command quite a significant price point in market. What's nice about this opportunity as well is that we have, and I mentioned it before, multiple points of advice which lay out a clear, direct hospital billing strategy in the US under DRG coding, which means that we wouldn't need to wait for CPT coding and reimbursement to start selling these tests and generating revenue in North America. I'm reserving some of the detail until we launch the product, but I look forward to revealing more over the coming quarters about the commercial opportunity and strategy aligned to MetaPanel.
All right, thanks, Luke. just along the lines of revenue, when might we see significant revenues from the international partners of scale? What is the key block to revenue, and what is achieving cash flow, break-even, rough guide, rough timeline on that look like?
Microba hasn't put out any forecasts, but I'm really pleased with our progress in the financial year. You know, we aimed to double our distribution base from four to eight. We exceeded that with 13. We launched a new healthcare product. We signed and set up the path to launch for MetaPanel for that advanced infectious disease opportunity. We did close out the year with a good year of growth, particularly in personal testing, both domestically and internationally. If you look at cash receipts, we've reached over AUD 6.3 million, representing 37.5% growth from the prior year. We have all of the ingredients for strong growth into FY 2024.
I don't see that there is an inhibitor from here for us to continue and accelerate that growth trajectory, other than continuing to deliver that product excellence, making sure that we do an excellent job of sales and distribution together with our leading venture partners. Again, I think I've used this example before to outline what I see the commercial opportunity being at various levels of success. At one end of the spectrum, I use the comparable of Ariosa Diagnostics, who were one of the pioneers in prenatal genetic testing. They reached circa AUD 50 million in revenue and were ultimately acquired for AUD 600 million. The other key example I'd point to is a company called Foundation Medicine, who were a pioneer in cancer companion diagnostics.
Ultimately reached circa AUD 200 million in revenue and was acquired by Roche for over a couple of billion dollars. AUD 2.4 billion, I think, was the acquisition number. That I see is the opportunity ahead for Microba. The speed of how quickly we can unlock that opportunity, I think we've got all of the ingredients to do that over the coming years.
Great. Thanks, Luke. Just back on MetaPanel, how long would it take for the results to be available after the patient is tested?
The fastest result that we have delivered so far is within 48 hours. Really, it comes down to what the clinical needs are. There's no specific inhibitor, other than how quick we can move it through the laboratory, to delivering those test results. In that pre-admission setting, you've got time and space to be able to deliver that result over several days. The more time you have, the more we can open up margins on that product. The faster it is, the higher the cost to run the test, based on the laboratory processing materials that need to be used. We can deliver that test result quite quickly if needed. Importantly, there's enough margin that we can see to where a cost of goods associated with that.
Great. Thanks, Luke. Can you expand on the progress with the phase I clinical trial of MAP 315?
I'll hand over to Trent for that.
Thanks, Simon. Thanks, Luke. For the phase I trial, I think the good news is everything's tracking to schedule. In terms of recruitment, that's been smooth. I think we've mentioned previously that we're working with Nucleus Network down in Melbourne. They've been great in bringing participants through onto the trial. I think as people may be aware, it's structured into two cohorts. I mentioned we were through 50%, so that means that we've completed dosing, recruitment and dosing for Cohort 1, and we're looking forward to moving into Cohort 2. From where we sit here, everything's on track for that results delivery later this year, as we've mentioned.
Great. Thanks, Trent. Final question: What type of immunological experiments are being run by the immuno-oncology program, and what should investors be looking for there?
Yeah, I think fundamentally, what's important to say here is that we're really energized by the possibility of what the microbiome can do in this immunotherapy landscape and enhancing response to immune checkpoint inhibitor treatments, as we mentioned. We're seeing that, you know, interesting data that really got us excited about the potential by looking at reduction of tumor burden in some initial mouse studies. For us now, it's really about looking at what are the drivers there. For us, that's two parts to that answer. One is that we need to conduct additional animal models to ensure that we see this across different tumor types.
The other rationale for doing that, of course, is to get the samples that we need to look at what's driving this from an immunological perspective. We continue to see in the literature a large number of really high-quality studies that are starting to unpick this. You know, we believe we've got the advantage in taking this data-driven approach to identifying some novel organisms that we're using in these studies. For us, the focus is on finding that novel immunology that will allow us to then have the confidence to progress these into the clinic and see if they can have a meaningful impact to our patients in the future.
Right. Thanks, Trent. Thanks, Luke. Luke, I might just hand it back to you for closing remarks.
Thank you, Simon. Closing out the financial year with our world-class team and technology, we made significant progress in capturing this rapidly emerging microbiome testing market and matured into a clinical-stage drug development company. I'm excited about the milestones and value, which will be created for shareholders over the next six months. Thank you, everyone, for your time and attention and tuning in for the update. We'll close there.
All right. Thanks, Luke. Thanks, Trent. Thank you all for attending.