Highlights

  • Antimicrobial resistance is often described as a slow-moving pandemic, and the numbers coming out of the Asia-Pacific this week underline why.
  • The analysis of 28 countries found 27 had endorsed at least one national plan, but 49 per cent of plans had no costing at all and only eight countries funded their programs entirely from domestic budgets.
  • Clever Culture has increasingly focused on pharmaceutical manufacturers, which use culture plates to monitor contamination in production facilities.
  • In March the US Food and Drug Administration granted the test a CLIA waiver, allowing it to be used in more than 300,000 outpatient sites.

Clever Culture Systems (ASX:CC5) is in focus. Antimicrobial resistance is often described as a slow-moving pandemic, and the numbers coming out of the Asia-Pacific this week underline why. A study published on Monday in BMJ Public Health, and highlighted by the World Health Organization's Western Pacific office, found that while almost every country in the region now has an action plan to tackle drug-resistant infections, most of those plans remain unfunded. For a handful of small ASX healthcare companies, the push for faster and more accurate diagnosis is becoming a commercial opportunity.

The scale of the problem is stark. In 2019 an estimated 2.6 million deaths in the Asia-Pacific were associated with resistant infections, and more than 680,000 were directly attributable to them. The WHO projects that resistance could cause more than 5 million deaths across its Western Pacific region between 2020 and 2030, at an economic cost of up to US$148 billion.

Slow Diagnosis Fuels a Bigger Problem

The analysis of 28 countries found 27 had endorsed at least one national plan, but 49 per cent of plans had no costing at all and only eight countries funded their programs entirely from domestic budgets. It also found only nine countries reported that more than 70 per cent of antibiotic use came from the narrower-spectrum drugs the WHO prefers.

Overuse of broad-spectrum antibiotics is a key driver of resistance, and much of it stems from slow diagnosis. Doctors frequently prescribe before they know what is causing an infection or which drug will work. That is where artificial intelligence and rapid testing come in.

AI Moves Into Culture-Plate Reading

Clever Culture Systems, the former LBT Innovations, has spent years developing APAS Independence, an instrument that uses artificial intelligence and Machine Learning to image, read and interpret microbiology culture plates. The system can handle urine cultures and infection-control screening for MRSA, and a module called Zone Reader assesses how bacteria respond to antibiotics by measuring the clear zones that form around drug discs on a plate. The company says the platform works considerably faster than manual reading.

Clever Culture has increasingly focused on pharmaceutical manufacturers, which use culture plates to monitor contamination in production facilities. It has sold an instrument to Novo Nordisk for evaluation in Denmark and has said its engagement with five large multinational drugmakers represents a potential opportunity of 60 to 80 instruments. The shares trade at around 2 cents, giving it a tiny Market Value relative to the size of the market it is chasing.

Rapid Testing Reaches the Doctor’s Desk

Lumos Diagnostics is tackling the problem at the doctor's desk. Its FebriDx test helps distinguish bacterial from non-bacterial respiratory infections using a finger-prick sample, giving clinicians a quick read on whether antibiotics are warranted. In March the US Food and Drug Administration granted the test a CLIA waiver, allowing it to be used in more than 300,000 outpatient sites. Lumos estimated the decision opened a US market worth more than US$1 billion and triggered US$5.5 million in milestone payments. Chief executive Doug Ward said it would let clinicians deliver results during the consultation.

Atomo Diagnostics is a less direct beneficiary. Its Pascal device platform is used to deliver the FebriDx test, so higher US sales of FebriDx should translate into greater volumes for Atomo.

Orders and Adoption Become the Test

Research groups are moving quickly too. In August, Penn State researchers published a method called STREAM in Science Advances that cut the time to identify bloodstream infections and their antibiotic susceptibility from as long as a week to about seven hours, with roughly 96 per cent accuracy in about 100 samples.

For investors, the theme is compelling, but the companies involved are small and the path to profit is uncertain. The things to watch are further instrument orders for Clever Culture, the pace of US FebriDx sales for Lumos and Atomo, and whether governments in the region back their resistance plans with real funding for diagnostics.

Can Faster Diagnostics Turn Into Wider Adoption?

Attention now turns to the next operational, clinical, exploration or regulatory milestones outlined by Clever Culture Systems, with upcoming results and execution set to determine how the current development pathway progresses.