LBT Innovations (ASX:LBT) automating the lab, August 2021Craig Foley
LBT Innovations Limited (ASX:LBT) CEO and Managing Director Brent Barnes provides an update on sales and distribution for the company's Automated Plate Assessment System (APAS), which is used to read culture plates in laboratories.
Melissa Darmawan: Hello. I'm Melissa Darmawan for the Finance News Network. Joining me from LBT Innovations (ASX:LBT) is CEO and Managing Director Brent Barnes. Brent, nice to meet you, and welcome back to the network.
Brent Barnes: Thanks for having me.
Melissa Darmawan: It's good to have you. Now, LBT Innovations has a history in developing world-leading solutions in microbiology automation. Can you tell us more about this?
Brent Barnes: Absolutely. LBT, for the last 15 years, have been focused on bringing to market disruptive and innovative technology to the clinical microbiology space. So, our founding product automated the inoculation and streaking of a specimen onto an agar plate, and that was successfully sold all around the world. About 500-odd instruments installed around the world. And our current product automates the culture plate reading part of that workflow. So, that next part of the workflow downstream. And we're in the early commercialisation phases of this product.
Melissa Darmawan: Thanks, Brent. Before we talk about your products, can you tell us about the operations of a lab and the potential to automate processes?
Brent Barnes: Yeah. So, clinical labs are made up of different kinds of sub-disciplines and departments. So, virology is one example, looks at viruses. That's pretty relevant at the moment with COVID. So, that's where all of those testing occurs. Bacteriology is another sub-department, and that's the area that we're focusing on. And it's a discipline that hasn't had the same level of disruption and innovation as other areas like clinical chemistry or perhaps haematology. So, the Petri dish or the agar plate was developed in the late 1800s, and today there are literally millions of these Petri dishes being processed in labs all around the world. And so it's largely done manually. And the other aspect is we have a shortage of qualified microbiologists. And so it's really an area that's ripe for automation, which is why it's an area we've been focused on for that 15 years, which is really a short period of time when you think about medical devices and bringing products to market.
Melissa Darmawan: Let's dive into your lead instrument. Could you tell us what it is and give us a landscape around the commercialisation and development of it?
Brent Barnes: APAS is the automated plate assessment system. So, like I said before, it automates the reading of culture plates. So, rather than a microbiologist needing to pick the plate up and read it and then put the results into a computer, we have an instrument that we've developed that automates that process. And probably the key ingredient and the key innovations are around the algorithm, the interpretive software that we've been able to train to make the interpretation of various specimens.
Where we're at from a sales and commercialisation perspective, in the recent quarter we were really happy to make a couple of sales to the health services laboratory. It's a state-of-the-art lab, it's a Sonic lab in London. They bought two instruments, which was really great. And we've also made steady progress towards a US distribution partner.
Melissa Darmawan: And how about operations?
Brent Barnes: Yeah, look, we're really busy developing these analysis modules. So, this is that AI interpretive software that I mentioned. And so we've got USFDA clearance for urine specimen and we're developing more urine processing for Europe, and we're waiting for the USFDA for our MRSA submission. So, making steady progress along those fronts. But what we're super excited about is the anti-microbial susceptibility test that we're developing automation for. So, this is looking at anti-microbial resistance to various bacteria, and that's a really important step of the workflow, because it forms the basis of a drug recommendation to fix this specific issue for the patient. And so what we've done again is trained an algorithm to measure these zones of inhibition, and that's really, really critical, and a very manual step that happens also within the workflow.
Melissa Darmawan: Last question. Can you provide a snapshot of the results and what's ahead?
Brent Barnes: Yeah, so we finished the June quarter with 9.6 million in the bank, and we have a cash burn rate about 1.5 million per quarter. We expect that to be fairly consistent on a go-forward basis. So, quite well-funded. I mentioned the two sales with the health services lab, so we're really happy about that. But I think what most shareholders are really eager for and expecting this quarter is the appointment of a US distribution partner. Obviously, the US is the single largest market globally for us. We've been working with a number of parties for the last 12 months. And so I've indicated to the market that we are expecting that announcement to occur this quarter. That's only five weeks away from now. And we're on track to that. So, that'll be a really significant milestone for the company and really lays that foundation block in terms of scaling our sales efforts for the US. The MRSA analysis module that we've had with the FDA for a bit over a year now, we're waiting on feedback from the USFDA. So, they're still a little bit behind in their processing due to COVID. So, we're expecting a result, again, also in this quarter.
So, really kind of wrapping up and considering this quarter, it's a really big one for the company, and watch this space because it's one that we're really expecting to deliver on and laying those successful foundations to see this company scale over the coming period.
Melissa Darmawan: Brent Barnes, thanks for the update. I look forward to hearing from you again.
Brent Barnes: Thanks very much.
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