Investors encouraged not to sleep on medtechs

WAKE UP!

Now that we have your attention, it is time to reveal the latest ASX runners of the week and this time around, it features a company that claims more than 35 years of excellence in sleep diagnostics.

Let’s face it, everybody needs sleep. Even the most ambitious trader that is bragging about keeping an eye on the ASX, the New York Stock Exchange, the TSX in Canada, the DAX in Germany and even the Bolsa Mexicana de Valores based in Mexico City has to shut their eyes for at least a few minutes every day.

And this week’s Bulls N’ Bears profiled ASX runner is aiming to do just that by addressing widespread sleeping issues. Compumedics surged more than 112 per cent this week to touch 34 cents after a previous close of 16c.

The medical device company works in the development, manufacture and commercialisation of diagnostic technologies for sleep, brain and ultrasonic blood-flow monitoring applications. And on Monday, it received the green light from the all-powerful United States Food and Drug Administration for its Somfit technology to be marketed in America.

Somfit is a wearable device for collecting patients’ physiological data, primarily for use in assisting medical professionals to diagnose sleep disorders. The design of the product aims to prioritise ease of use, being light and comfortable for the patient, while enabling the collection of high-quality signals to provide medical-grade data to aid the clinician’s diagnostic activity.

Somfit involves a single-use adhesive-gel electrode attached to the patient’s forehead that is connected to the main device, which houses sensors and transmits sleep data through Bluetooth to an app developed by the company.

Management says the home sleep testing market in the US is estimated to be about two million studies per annum. Given the pre-FDA market research activities undertaken by Compumedics, it represents a potential new addressable market of between US$110 million (AU$166.3 million) and US$180 million (AU$272.2 million) a year in potential new and incremental software-as-a-service revenues to the company. The US has about 3000 sleep centres and 15 major independent diagnostic testing facilities.

 Somfit was commercialised earlier this year in Australia, with $1.2 million in sales recorded since July.

Compumedics says it has pre-emptively appointed several new sales staff in the US to begin commercialisation activities and it will be actively pursuing opportunities available to it following the FDA clearance – a positive sign of its confidence in the new market.

So, next time this column sends you off to sleep, consider attaching a Somfit and have Compumedics identify the share price hikes you usually only dream about.

Sticking with medtechs, clinical-stage biotechnology company Alterity Therapeutics leapt 125 per cent from a close of 0.4c to reach 0.9c this week, after unveiling promising new data on the effect of its “ATH434” treatment for disorders such as multiple system atrophy and Parkinson’s disease. 

The data was presented by Alterity vice president of research and nonclinical development Dr Margaret Bradbury and showed the treatment improved motor performance and general function in monkeys with experimentally-induced Parkinson’s disease. The presentation was featured at the Future of Parkinson’s Disease Conference last month in Austin, Texas.

While testing on primates – or any kind of animal, really – is frowned upon by certain parts of society, Alterity management says the new data is exciting as it is the first time it has shown that ATH434 can reduce Parkinson’s symptoms in a higher-order animal such as the monkey.

And to be fair, the company also kicked off a second-phase clinical trial into multiple system atrophy in early November, with 77 adults enrolled globally. It should also be noted that ATH434 has been granted orphan drug designation for the treatment of multiple system atrophy by the US FDA and the European Commission.

Alterity says Parkinson's disease is the second most common neurodegenerative disorder and causes unintended or uncontrollable movements of the body, in addition to neuropsychiatric and other non-motor features. The precise cause of the disease is unknown, but some cases are hereditary, while others are thought to occur from a combination of genetics and environmental factors that trigger the disease.

More than 10 million people worldwide are living with the disease, which makes Alterity’s treatment a potential game-changer.

There were bets on in the office during the week that this column could avoid talking about lithium for at least a couple of weeks. But, lo and behold, Lanthanein Resources (somewhat predictably) beat the odds.

The company’s stock rose more than 116 per cent to touch 1.3c after a previous close of 0.6c on announcing it had entered into a farm-in agreement with Gondwana Resources to earn up to 70 per cent of the Lady Grey lithium-tantalum project, about 365km east of Perth.

Management says the operation is a highly-prospective lithium-caesium-tantalum (LCT) pegmatite operation that sits just 400m west of Covalent Lithium’s Earl Grey mine, which hosts a resource of 189 million tonnes at 1.53 per cent lithium oxide.

Lady Grey covers 77 square kilometres, with a strike of about 18km in the Forrestania greenstone belt.

According to the binding deal, Lanthanein can earn a 50 per cent interest in the operation by spending $7 million on exploration within three years. It includes forking out at least $1 million in the first year and $3.5 million within the first two years after the stage-one start date.

A first milestone payment of $500,000 is to be paid to Gondwana within one year of the start date, or when Lanthanein spends its first $1 million in exploration, with an additional $500,000 payment by the second anniversary, or once the explorer spends the relevant $3.5 million.

Lanthanein can earn the extra 20 per cent by sole-funding exploration expenditure until a decision to mine is reached within seven years of the start date, with an additional $2.5 million paid to Gondwana once a decision to proceed is made.

While it is no surprise that a solid lithium announcement has helped Lanthanein score a significant share price hike, this columnist is still disappointed the project isn’t located in James Bay, as that would have secured the usual quinella.

Finally, after a tumultuous week for oil and gas companies that saw Woodside wanting a piece of Santos and the Tiwi Islands not wanting a bar of Santos – and the South Australian Government saying it just wanted to be involved – this week’s final runner is Global Oil & Gas, which reached 2.7c from a previous close of 1.4c to record a share price hike of more than 92 per cent.

And what prompted this significant surge, you ask? Nothing market sensitive if you go by the company’s recent announcements.

Although, at the start of the week Global did mention a couple of tweaks to its board following two resignations. Invictus Energy founder and managing director Scott Macmillan adds more than 15 years’ experience in the oil and gas industry to the company’s boardroom table, while corporate and commercial lawyer Matt Ireland also brings extensive experience in corporate governance and compliance matters.

The company also announced a new secretary with the appointment of Lloyd Flint to replace Anna MacKintosh. It just goes to show, shifting some chairs can also sometimes shift shares.

Early last month, Global released an update on its Tumbes Basin technical evaluation agreement joint venture with Jaguar Exploration, just off Peru. The latest board changes were apparently made to “reposition” the company to accelerate activities at its 4858-square-kilometre offshore oil and gas block, which remains virtually undrilled using modern 3D seismic data.

Although, why you would use data to drill is beyond me. Maybe, that’s just me.

And in any case, perhaps the market knows something we don’t. Perhaps the ASX will issue Global with the regular “Please Explain” notice that so commonly pop up when researching this column.

Or maybe it just means that an untapped potential oil and gas resource due for exploration in a good jurisdiction of South America has simply got the market jumping ahead of any results.

It wouldn’t be the first time.

Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au