Second largest healthcare company acquires strategic stake in Australian startup

MedTech News: The second largest healthcare company on the ASX has invested in local startup.

Sonic Healthcare has invested A$17.8 million to acquire a 19.99% shareholding in Queensland-based Microba Life Sciences, a precision microbiome company. In addition, Sonic is seeking to acquire options for an additional 5% equity position, subject to approval by Microba’s shareholders.

Sonic and Microba have agreed initial terms of a strategic alliance to deliver Microba’s microbiome testing technology with non-exclusive distribution into Sonic’s broader network including Australia, New Zealand, Switzerland and the United States, along with exclusive distribution into Germany, United Kingdom and Belgium for a period of 1 year commencing on 31 January 2023 with plans to extend this agreement.

Chair of the Board at Microba, Pasquale Rombola, said “Since the inception of Microba five years ago, our vision and strategy has remained unchanged. The human gut microbiome represents one of the biggest untapped opportunities to improve human health, and because of that, we expect microbiome testing and therapeutics to become a routine part of healthcare in the future. Our successful IPO that raised $30m earlier this year was an important step in our company remaining steadfast in the pursuit of building a global position in microbiome testing and therapeutic development, by leveraging Microba’s world-leading technology.”

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Professor Ian Frazer, Deputy Chairman of the Board and Chair of Medical Advisory Board at Microba, commented “This year we have developed a microbiome test for healthcare professionals that is, for the first time, approved in Australia and Europe for in vitro diagnostic microbiome testing, and approved as a Laboratory Developed Test in the United States. This new test provides information directly of use to doctors and health care professionals caring for patients with bowel problems and some other chronic disorders.

“We are making steady progress toward the initiation of our first clinical trial of live bacterial therapy in patients with inflammatory bowel disease, specifically targeting ulcerative colitis. For our cancer immunotherapy program, using microbiome data from melanoma patients, we have also identified
individual organisms that may enhance the efficacy of immunotherapeutic interventions for cancer.”

Sonic Healthcare’s Chief Medical Officer, Dr Stephen Fairy, will join Microba’s Medical Advisory Board, responsible for governing the medical and scientific direction of Microba’s commercial activities.

Sonic Healthcare’s CEO, Dr Colin Goldschmidt, said “Sonic Healthcare prides itself on delivering accurate, reliable medical diagnostics services using leading laboratory and informatics technologies. Our partnership with Microba exemplifies our commitment to invest in cutting edge developments in laboratory medicine. We see microbiome testing becoming a key part of pathology over coming years and are excited about the potential of this partnership and the opportunities that Microba’s technology will provide for Sonic’s global operations, our referring clinicians, and our patients.”

Dr Luke Reid, CEO of Microba, stated “The Microba investment thesis continues to develop to plan, with excellent progress across our two core business segments of testing and therapeutics. Sonic is globally respected for its leadership in delivering trusted medical diagnostic services, and our partnership deeply aligns the interests of both companies to bring microbiome testing and therapeutics into the hands of clinicians and patients globally to improve standard of care”

Professor Frazer added “Global clinical research continues to highlight the importance of our microbiome on our health. Landmark papers this year highlighted the impact of the gut microbiome in Rheumatoid Arthritis and other chronic inflammatory disorders. It is becoming increasingly clear that testing and treating the microbiome will be a component of maintaining human health.”

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