Health Check: Aussie biotechs eye $100 billion US biodefence bonanza | Stockhead
ASX biotechs are well placed to tap America's multibillion dollar quest to protect its denizens from germ warfare. Pic: Getty Images. US authorities need to spend big to counter biohazard threats – and ASX. . .
ASX biotechs are well placed to tap America's multibillion dollar quest to protect its denizens from germ warfare. Pic: Getty Images. US authorities need to spend big to counter biohazard threats – and ASX drug and device developers eye a slice of the pieEntropy trial wins ethics approval while Amplia shares spike 30% on lung cancer combo trial newsFreezer jolly good fella as Vitrafy outlines thawing technologyASX biotechs are in pole position to benefit from the US$66. 9 billion ($100bn) that US military and civil authorities are projected to spend on biodefences. The US government cites this level of spending in a five-year strategy to strengthen national defences against pandemics and drug-resistant superbugs. A slew of ASX biotechs is exposed to US military tie-ups or contracts with the Biomedical Advanced Research and Development Authority (BARDA). These includeLumos Diagnostics (ASX:LDX),PolyNovo (ASX:PNV),Avita Medical (ASX:AVH),Immuron (ASX:IMC),Island Pharmaceuticals (ASX:ILA)andRecce Pharmaceuticals (ASX:RCE)Recce is developing synthetic antibiotics to overcome the resistance problems. The company has collabs with two US biodefence bodies known as USAMRIID and USAISR. According to Recce, antimicrobial resistance ranks as the second-highest funding priority, with US$4. 46 million earmarked. The highest priority? Pandemic influenza, with a projected need of US$4. 46bn. So maybe hold on to thoseCSL (ASX:CSL)shares after all. Nice names, nasty diseasesThe strategy name-checks priority pathogen threats including melioidosis and tularemia (nice names, nasty diseases), plus the plague and anthrax (nasty names, nasty diseases). And let’s not forget the filoviruses Ebola and Marburg, which Island Pharma is working on. Formally known as the medical countermeasures funding strategy, the US Administration for Strategic Preparedness and Response (ASPR) drew up the docco. ASPR is the preparedness arm of the US Department of Health and Human Services. The budget sets out ASPR’s assessed five-year funding need across four agencies: ASPR, the National Institutes of Health, the Food and Drug Administration (FDA) and the Centers for Disease Control and Prevention. “This substantial budget confirms the national security and health threats caused by antimicrobial resistance and the US government’s prioritisation of the need for new anti-infective drugs,” Recce CEO James Graham said. We hasten to add that while the “assessed need” is US$66. 9bn – heck, let’s round it off to US$70bn bill – the doco assesses a deficit of US$33. 5bn. Bioterror attacks are not just theoretical: 2026 marks the 25thanniversary of anthrax attacks on Washington’s Capitol building that killed five people. The US this year hosted two vulnerable events, the World Cup and the nation’s 250thbirthday celebrations. These passed without incident, thankfully. The 2028 Summer Olympics in Los Angeles poses the next stern test. Vitrafy warms to US Army tie-upIn its full year results released today, cryogenics playVitrafy Life Sciences (ASX:VFY)also highlights its tie-up with the US Army Institute of Surgical Research, to improve blood platelet management. Vitrafy has developed the Guardion freezing device and Lifechain software, to overcome the problems seen with freezing – and then unthawing – biological samples. Trials to date show superior ‘post-thaw’ recoveries of the life-saving material. The army contract has led to commercial collection arrangements with two private US blood banks. Vitrafy also said it expected its first contract to manage sample handling for a customer in the burgeoning cell and gene therapy sector. The company reported full-year revenue of $169,000, an operating loss of $16. 7m and June 30 cash of $41m. Vitrafy shares have doubled since the company listed in November 2024, having raised $35m at $1. 84 apiece. Investors obviously liked what they thaw. Amplia enters Big Pharma lung cancer collabPancreatic cancer drug developerAmplia (ASX:ATX)has inked a collaboration with Eli Lilly, to evaluate the former’s lead compound narmafotinib (AMP-325) in combination with the latter’s Kras inhibitor called olomorasib. Kras stands for Kirsten rat sarcoma viral oncogene homolog. So as with the ‘Karen’ moniker besmirched by entitled middle age matrons, science has tarnished another nice female name. Kras-es are a hot area of cancer research but clinicians suspect they become less effective as patients develop resistance. AMP-325 is a focus kinase inhibitor (FAK). The phase Ib/IIb trial will target non-small cell lung cancer (NSCLC). Amplia will carry out the study at local and US sites, with an expected kick-off in 2026. Lilly currently is undertaking two phase III studies in NSCLC. “The collaboration is underpinned by narmafotinib’s growing base of clinical evidence and a strong scientific rationale that FAK activation is a key driver of resistance [to Kras inhibitors],” Amplia said. To date, Amplia has recorded outstanding data from trialling AMP-325 with two common chemotherapies, with five complete responses. That is, the tumours disappeared – almost unheard of for deadly pancreatic cancers. NSCLC also has a high unmet need. Entropy’s psychedelic trial wins ethics approvalIn other trial news, local ethics gatekeepers have green-lightedEntropy Neurodynamics’ (ASX:ENP)proposed multi-indication basket study of its intraveneously-delivered psilocin candidate, TRP-8803. The 72 patient phase Ib/IIa study will cover eight “significant and widespread disorders”. This study will be done at Swinburne University, which also hosted Entropy’s world-leading, psilocin-based binge eating disorder study. The open-label study will evaluate safety and tolerability, as well preliminary efficacy signals. Psilocin derives from psilocybin, the active component of ‘magic mushrooms’. For the record, the trial covers anorexia nervosa, body dysmorphic disorder, obsessive compulsive disorder, generalised anxiety disorder, post traumatic stress disorder, treatment-resistant depression, fibromyalgia and irritable bowel syndrome. The study will evaluate treatment-resistant depression across two patient cohorts: one receiving usual antidepressant therapy and the other not doing so. The company expects the study to start dosing by the end of 2026. Currently, there are no approved psychedelic therapies globally. Australian guidelines allow the use of psilocin/psilocybin and MDMA (‘Molly’) for research purposes. FDA registers Control Bionics’ ‘Band-Aid’The US Food & Drug Administration (FDA) has registered and listedControl Bionics (ASX:CBL)Neurostrip platform as a medical device. Based on electromyography, the wearable Neurostrips give the company an entrée into the sports and rehab markets. The company said while FDA registration was not a prerequisite for such markets, the action was a “meaningful milestone” that reinforced Neurostrip’s credentials as a medical-grade device. The registration will help the company position Neurostrip for advanced clinical rehabilitation, medical research applications and “prospective human-computer interface and medtech development partners”. With such applications, US regulatory approval normally is required. Australia’s Therapeutic Goods Administration and European authorities are mulling Neurostrip approvals. The Neurostrips iterate the company’s core tech Neuronode. Neuronode devices enable disabled people to use their own ‘brain- to muscle’ electrical signals, to control communication and movement. Neurostrips measure physiological data such as unintentional muscle movements – such as jumping the gun at a Glasgow sprint. “It’s effectively a Band-Aid that does all of the same things [as Neuronode] but with more granular data,” said CEO Jeremy Steele. Audeara inks chip deal, so we hearHearing device innovatorAudeara (ASX:AUA)has entered a “chip level” licensing partnership with China’s Optek Microelectronics, involving commercial production for two customers. Audeara values the first orders at a modest $31,000. But more significantly, they mark the first revenue-generating deployment of Audeara’s proprietary AI noise-reduction tech under its fee-per-chip licensing model. “On-chip deployment … establishes a technical foundation for potential applications across consumer audio, hearables and hearing-health products,” Audeara said. The deal furthers Audeara’s strategy of licensing its tech to semiconductor partners and original equipment makers under an ‘Intel Inside’ model. At Stockhead, we tell it as it is. While Recce and Audeara are Stockhead advertisers, the companies did not sponsor this article.