Control Bionics: A Quarter’s Worth of Progress

Good morning, Armchair Army,

Welcome to today's edition of The Armchair Analyst, a 5-minute daily update on the ASX life-sciences sector.

I love a meaty business update.

Particularly when there is a LOT of stuff to cover.

This morning, my third Armchair Pick, Control Bionics (ASX: CBL), published one of these updates alongside its quarterly report.

CBL has developed, over the past 20 years, a technology that reads electrical signals and lets people control devices with their minds.

It sells across two markets…

FIRST, assistive technology. 

Helping people who are paralysed communicate through technology.

SECOND, sports & rehabilitation 

Reading the muscle signals to improve sports performance and injury recovery.

Here is the quick take on the company's progress…

US Distribution Partners for assistive technology? 

CBL recently pivoted from a direct sales model (expensive) to a distribution model (cheaper, but less control).

Tracking along nicely. 

Sports and Rehab?

20 organisations now signed up to pilot trials.

Should hopefully start to see these become ‘paid customers’ over the next few months.

Australian NDIS payments?

If you read through the quarterly report, you can tell how frustrated the company is by this.

The NDIS is dragging its feet when it comes to reimbursement, and there is about $1.1M in customer orders waiting to be delivered.

Cash position?

Pro forma ~$9.4 million when the T2 comes in.

So overall…

A quarter that reflects a number of business transformations.

The launch of a new product (for sports & rehab)…

AND a pivot of the go-to-market in another (assistive tech).

So today, I put the CBL business update “Under the Microscope”.

But first…

A scientific paper on Amplia Therapeutics’ (ASX: ATX) FAK inhibitor reveals preclinical data that shows ATX can improve pancreatic cancer outcomes. (ATX)

EBR Systems (ASX: EBR) completes investigation of implant complications where there were two serious adverse events. (EBR)

🪑 Very necessary to clarify.

I published my full take on the situation here: Deep Cuts from the Surgeon: What happened with EBR? 

Anteris Technologies Global Corp. (ASX: AVR) requests a trading halt pending a court decision on a cleansing notice issue release. (AVR)

🪑 Co Sec asleep at the desk?

Argent BioPharma (ASX: RGT) expands its CannEpil® license with Splash Beverage Group to the veterinary market. (RGT)

🪑 Strange things going on at RGT at the moment. Up as high as 51% on this news.

Enlitic (ENL) cut its quarterly cash burn 76% to US$0.7m on US$2.3m of receipts. (ENL)

🪑 With shareholder approval secured, the ~A$15m placement and convertible note conversion, ENL is debt-free with ~A$18m pro forma cash. 

The goal is to leverage this capital (and cost savings) through to breakeven.

4DMedical (ASX: 4DX) announces a $7.2M FY26 revenue. (4DX)

🪑 Still trading at wild revenue multiples… but they are starting to grow.

Next financial year will be telling.

Mayne Pharma (ASX: MYX) reports FY26 revenue of $383.7M, down 6%, with EBITDA decreasing 33% to $31.7M. (MYX)

🪑 Not the best year for the old Mayne Pharma.

AFT Pharmaceuticals (ASX: AFP) reports FY26 sales of NZ$254.7M, a 22% increase, and an operating profit of NZ$24.4M, with a FY27 revenue target of NZ$300M. (AFP)

Beating last year's sales again. One of the all-time compounding revenue stories on the ASX. Just check out this 20-year revenue chart:

Neurotech International (ASX: NTI) enters a trading halt for a capital raise. (NTI)

Control Bionics has three business buckets.

In the business update, the company addressed the first two.

This is the NeuroNode.

It allows someone who is completely paralysed to control devices with their brain:

For the last three years, CBL has sold its NeuroNode through a direct-to-sales model.

Own the reps. Own the sales process. 

BUT, it’s an expensive endeavour, and not so easy.

… particularly in the US.

At the start of this year, the company made the choice (the right one, in my opinion) to pivot from a direct sales model to a distribution model.

This is what it looks like…

Option 1 (direct sales): Sell it yourself, max the value but wear all the cost and risk.

OR

Option 2 (distribution): Sell it through someone else, give up some of the upside but drastically reduce costs.

CBL chose option 2.

The two partners that it chose, Tobii and PRC, are the largest distributors of eye-tracking software in the US and have hundreds of sales reps to sell the product.

Tobii has started to rollout to additional states in the US with CBL’s product.

Meaning CBL site is generating revenues right now under this partnership.

The transition from the direct sales model to the distribution model was a reason for the soft sales revenue for the quarter.

(around $1M in sales)

Essentially, the company pushed the reset button on revenues in favour of long-term sustainability.

PRC starts in August, and NextLevel starts in a few weeks.

Next milestones:

Now, this is the part that I’m most interested in.

A few weeks ago I was invited to test out the NeuroStrip device at the CBL offices.

The NeuroStrip is a tiny version of the NeuroNode that can read muscle signals with incredible accuracy and sensitivity.

Here is the device reading my muscle signals and providing feedback:

Right now, CBL has signed up a bunch of customers on trial agreements (that range from 2-4 months).

These are essentially test customers to establish value (and hopefully) turn into paying customers for the product.

There are 20 of them, with big names including…

British Olympic Team, Hawthorn, Broncos, GWS Giants, Rugby Australia (on the sports side).

Mayo Clinic, Mountain Land Physical Therapy, Ohio University (on the research and rehab side)

Oh… and there is a “significant European Football Club”.

(I’ve got a feeling I might know who it is).

This is the main growth driver I see for CBL, and a big reason why I named them as my third Armchair Pick.

The company has an ad out to find someone to lead the team:

That’s on the sports front.

It also sells the NeuroStrip product to rehab clinics.

What will drive sales will be clinical validation.

One of CBL’s major customers, the Stroke Lab in Japan, published an independent interim report on CBL’s NeuroStrip.

“Paretic-side surface EMG, pre- and post- intervention”

NeuroStrip proved it can measure muscle problems in real stroke patients that existing rehab tests completely miss.

The data is intended to be presented at “three academic conferences”.

(This is essentially the sales peer-to-peer sales pitch that drives adoption of medical device products).

Next milestones:

FIRST, on the assistive technology side.

A bit of a weaker quarter revenue-wise, which is understandable as the company transitions from a direct sales model to a distribution model.

BUT, distribution rollout is happening (and revenue is being earned) from those agreements.

In my view, this will take around six months to properly ramp up.

SECOND, on the sports & rehabilitation side.

Very good progress: 20 pilot trials in and some very big names using the product.

The first paying customer is a big milestone.

It will be validation that the technology is not only useful, but useful enough for someone to pay for it.

Right now, as the first few customers roll off their trials, it will be really interesting to see if CBL is able to secure a commercial sale in the near term. 

The company also completed a capital raise and has a pro forma cash balance of ~$9.4 million when the T2 cash comes in.

(To be voted on next week)

So it has the runway to deliver.

This is very much a “reset” quarter.

Next one is about getting early traction, and those first customers across the line to pay for the product.

See you all next week at Bioshares!

The Armchair Analyst