Next Science Limited (ASX:NXS) Managing Director Judith Mitchell provides an update on the company’s portfolio of biofilm products to help patients with chronic infections, after surgery events, and resistance to antibiotics.
Good afternoon everyone and thank you to Martin for actually a really nice segue for us because we’re a little company in many respects with enormous ambitions and an enormous opportunity and fortunately, none of it gets hit by the macroworld. So what do we do?
We’re a company that have answers to the infections that change or end people’s lives. People with chronic infections, people with after surgery events, people who are perhaps at the end of being able to deal with more antibiotics, we have answers for those conditions. Currently today, we have products that work for surgical site infection and the prevention of surgical site infection but also the treatment of surgical site infection. Chronic wounds so leg ulcers, bedsores, diabetic foot ulcers, and prosthetic joint infection. When that pain saving knee gets replaced and then at some point in time gets an infection and you’ve got to deal with that, we have ways of helping you with your surgeons to get back on your feet without some of the pain, suffering and additional surgeries that can happen today.
And we also have some answers for our young people for acne. Acne is a biofilm-based infection and it’s turning out to be something that bugs us all our lives and there’s acne turning up in the discs in your back, in the bottom of your brainstem so this is another bad bug that we’re really better off without.
So, we have in the market today a group of products that have made up our first-half revenue and I’m going to talk quickly about them all with some level to the size of market we expect these products can serve around the world. Right now though, our concentration is the United States and a little bit into Australia, we’re just starting our footprint in Europe and growing into that although I have to be honest, that’s the one place that given the COVID conditions, we’re not racing off to Europe right now.
So our first product into the market was an anti-microbial wound gel. It looks like that, a very miracle product that does great things for people onto a wound, getting rid of the infection in the wound and helping the wound close. Over 12 million people around the world have chronic wounds and they have a worse mortality rate than cardiac disease.
The next product that we sell is the same kind of product, same chemistry but in a kit that’s sterile packed, so it can go into the operating room and help that surgeon stop you from getting a post-operative infection and why is this important? Because, the great work of a surgeon is very easily undone by bad bugs.
Then we have some acne products, currently online is the tbh brand and in the clinic is the Aspect brand in Australia and tbh themselves have just raised some capital to move themselves off shore as well.
So then our major surgical products. The first one is Bactisure. This product’s been in the market since 2017. It’s distributed through our global partners Zimmer Biomet and it is used to treat an infected surgical cavity. Predominantly a surgical revision on a joint, a hip, or a knee, or shoulder. There are about half a million to a million of these surgeries that happen annually. Unfortunately, these are really quite aggressive surgery occasions for patients and so the advent of Bactisure is trying to help make sure that second surgery is a final surgery and people are not lining up for three or four or five more which can happen unfortunately.
Then our latest product. Xperience, No Rinse Antimicrobial Solution, released in the United States starting at the end of April and I’ll talk about it in some more depth.
So over the first half of this year, we had our best first half admittedly we’ve only been listed for two years. We fired 3M which is an interesting thing for tiny little company to say that we took on one of the biggest healthcare providers and said, you’re actually not good enough to carry our product and we brought this product, which is the BlastX product back to us. What we found is, to do business in that marketplace, you need to be small and nimble not huge and worrying about big boxes. So we’re doing really very nicely in picking up all of our old customers and once again, being able to help a wider and wider range of providers who are treating the patients in that segment.
As I mentioned, we got the pre-market clearance in the United States for experience. We got a wound gel clearance for BlastX within Australia and we’re right now trialing in several hospitals predominantly based in Sydney.
Looking at this product, healing both chronic wounds for those people who are going home or cared for at home but also acute wounds in the hospital that are not healing during hospital stay. All of this is underpinned by some of the things that are behind me on the wall and that’s our patents that back up our science and we patent aggressively. It was 36 in August as we come through September, it’s now 38.
So Bactisure, a quick overview, a very fast acting rinse wash, highest kill rate known in the market for non-toxic product that is also not an antibiotic, which is key, because the more antibiotics we feed people, the less effective they are over time. So the less we can use and get an effective answer, the better off patients are going to be.
This product through Zimmer Biomet, who are the world leaders in hip and knee replacement is available in the United States and now Europe in the UK, Canada, Chile, New Zealand, South Africa and Australia.
So our wound care product and apologising for anybody who is not too thrilled at the pictures. This product is sold through outpatient clinics, the VA Hospital network are big users, the Kaiser Hospital network so provider payers love it. Why did they love it? It closes the wound faster and takes down their overall cost to treat the patient.
As I mentioned, this is a large patient group around the world and with the increased admin of diabetes, this patient group is not getting any smaller and the second half of this year, we’re actively looking to expand our footprint in home health. That’s something called long-term acute care, which is a whole segment of industry in the United States. Not quite nursing home, these people have acute disease like cardiac disease or recovering from stroke and they’re bedridden and unfortunately, when you’re bedridden what quite often happens is you end up with something like what is in the pictures which was a chronic wound and that’s a really interesting case.
This woman got this, this was the wound in April 2019. It had been that way for two years. So 2017, this lady had a stroke and this wound resulted from her bed stay. The patient was treated with BlastX for a month and it healed. After two years of pain, suffering, dressing cost, and really miserable existence when you’re living with these things so we call this our little miracle in the tube.
So right now, as I mentioned, it’s returned to Next Science with full market access in the US. We have executed logistics supply agreements with Cardinal Health and Owens and Minor who act as intermediaries in that health market, remembering you’ve got tens of thousands of providers out into that community and they help everybody get product in places. We have a direct sales working really very nicely and we’re piloting in home health by putting together a format that suits the way they deal with their patients.
So when I say we severed our relationship with 3M. 3M likes to sell lots of products in a big box but if you’re a home health group, you want to get a section of product dedicated to your patient, billed and sent to your patient so you need a business that has the flexibility to do that and I’m pleased to say as a patient-centered company, Next Science has the ability to make that need.
So then we have SurgX and this is BlastX put in the sterile pack and the objective of being in the steroid pack is you can go into the operating room in what they call the sterile field. So it gets opened and handed off into somebody who is within the sterile environment. It goes on the wound as they’re closing, does a great job in keeping out infection but it also has been shown to improve the look of the scar.
And we know how but I can’t tell you because it’s a secret but it does a really beautiful job and more and more of the orthopedic surgeons and the plastic surgeons are picking it up knowing not only are they protecting their patient against infection, they’re also giving the patient the best possible aesthetic outcome for the surgical incision.
And then our newest product and this is a groundbreaking product. It’s a groundbreaking product for the industry but more importantly, it’s a groundbreaking product for patients. Why? This is the first time we’ve shown anywhere near the kill rate necessary to protect the patient against catching an infection in the operating room. Now, why would you catch an infection in an operating room? You actually bring it in yourself.
We are the biggest causes of most of our own infection and what this product does as you rinse in, as the final rinse, you’ve left a covering over all of the internal cavity that has been open which means any bugs that are going to come down from the skin level or the tissue levels between where your surgeon has been operating and the skin, those bugs won’t make it. At a seven [lognormal bug] kill, this is 10 million times more effective than everything that’s been used in the past. It’s non-toxic, so unlike both povidone-iodine and chlorhexidine, we help tissue, we don’t hurt tissue and they leave it behind which makes the surgery actually even faster.
So where are we right now? We have approval in the United States. We’ve done our first surgeries. We’re in a process called value assessment submissions which means we make submissions to the individual hospitals which we couldn’t do until we got the FDA approval and we’re coming through that process with each of the hospitals.
So we have about 320 surgeon supporters who’ve helped us get 270 submissions in and those submissions take 14 days maybe, rarely and anything up to six months. We’re coming through this process and building a cadre of not only small hospitals but also large hospitals and in some cases, some major systems. So in the last 60 days we have signed up Duke University, The Northside Hospital Group in Atlanta, Steward Health who are in both Florida and the Northeast, Atrium Health out of North Carolina, Robert Wood Johnson Health out of New Jersey and lastly, Memorial Hermann Hospital out of Houston. So I very quickly say a name like Memorial Hermann Hospital but Memorial Hermann actually represents 34 hospitals in the Texas area so that gives you an opportunity to go and then convert a whole lot of surgeons.
Why is this important? Because what we actually do is related to the surgeon. As we come down a cascade to get into the market, FDA approval means you get to come to the hospital. That approvals mean you get inside the door of the hospital and then you’re selling to the surgeon so a lot of our work is now moving and focusing on those surgeon customers. This is a brief snapshot of the profit and loss statement for the first half of the year. As I said, biggest first-half we’ve had since we listed and a huge improvement on last year. We were heavily impacted by COVID last year when people basically closed up shop in a lot of the medical practices in the United States, especially through that first half, that second quarter of the year was really extremely quiet while everybody stayed home.
So continuing to improve our operating statement and reducing our losses, as you see where the money gets spent, more and more of our money is moving towards the outward look or the sales and marketing look about business and at the end of June, we had $13.2 million cash on hand and no debt.
So where to now? Our priorities for the second half of this business is to execute on the experience launch and get those gap submissions into active hospitals with surgeons operating, using this product day in and day out. We continue to build a BlastX momentum with the successful pilots in home health and then we’re leaning in to support converting more of those surgeons. We are leaning into some more direct salespeople, which we haven’t been using previously.
So all in all our objective as a company is healing people and saving lives. We managed to do that one surgeon, one patient at a time and our true objective is to become standard of care, building great outcomes for patients and a great medical device company for Australia. So thank you very much for your time today and we look forward to talking to you again. Thank you Clive.