Good morning, Armchair Army,

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

Today I have something special for you.

Friend of the newsletter, Surgeon Dan, is back with another company review as part of my Biotech 165 Challenge.

This was a company that he found himself.

When he did a deep dive… he bought shares on the market the next day.

It solves a big problem for surgeons.

Making sure that when they cut the cancer out, nothing gets left behind.

Did they get all of the margin?

Right now, surgeons have just two tools at their disposal to solve this problem.

Their eyes and their fingers.

(Yep… when Dan first told me about this, I didn’t believe it, but that’s all that stands between someone going through cancer surgery and coming back in 4 weeks to get more cut out).

For the types of surgeries that Dan does (prostatectomy), 1 in every 4 patients will need to come back.

For breast cancer, it's closer to 1 in every 3.

Terrible outcomes for patients… and the healthcare system at large.

The next company on my Biotech 165 Challenge is Optiscan (ASX: OIL), which has developed a handheld touch-and-see probe that lets surgeons see cancer cells in real time.

Forgive the company's stock ticker… It’s a shocker.

But the technology… 

Well THAT is super interesting.

But first…

BCAL Diagnostics (ASX: BDX) takes a 10% stake in Genetic Signatures (ASX: GSS) for ~$1.4 million. (BDX)

I love this move.

If you value GSS just at cash backing, BCAL bought ~$3M for $1.4M.

It sets the stage for a merger in genuinely complementary businesses.

I was wondering who did that big cross-trade from Asia Union Investments announced late last night.

… I guess we have our answer.

Not what I expected, but I like it.

(I own some GSS as a trading position).

Telix Pharmaceuticals (ASX: TLX) aligns with the FDA on Part 2 of the ProstACT Global Phase 3 trial for TLX591-Tx in the U.S. (TLX)

🪑Milestone ticked.

Imricor Medical Systems (ASX: IMR) receives FDA 510(k) clearances for NorthStar and Vision-MR Diagnostic Catheter in pediatric use. (IMR)

🪑This is big news.

IMR’s first customers, I expect, will be pediatric patients, who would be most at risk from surgeries using X-ray (due to the radiation). Great outcome.

AdAlta (ASX: 1AD) announces a strategic collaboration with Oktopi to access an AI-enabled platform to enhance decisions in medicine development. (1AD)

🪑 Seems like they just signed up to a SaaS vendor? 

That’s like a tech startup signing a deal with “Salesforce” when they change their CRM platform.

OncoSil Medical (ASX: OSL) was selected to participate in the PALACROS consortium, conducting a Phase II clinical trial of its OncoSil™ device for pancreatic cancer. (OSL)

🪑Cheap option on more independent data. Nice.

Echo IQ Limited (ASX: EIQ) announces a strategic partnership with Advara HeartCare for exclusive access to up to 1 million echocardiography studies. (EIQ)

🪑 A big part of EIQ’s moat is its proprietary database of echocardiograms (heart images) used to train its AI. This gives it exclusive access to another 1 million echos (more of a defensive play than anything).

Starpharma (ASX: SPL) reports positive preclinical results for its DEP® HER2-Lu radiotherapy, with plans for a Phase 1 clinical trial in H2 CY2026. (SPL)

Starpharma (ASX: SPL) has filed a patent application for its DEP® drug delivery platform in radioligand therapy following positive preclinical studies. (SPL)

🪑 Back-to-back announcements for SPL today.

Neurotech International (ASX: NTI) advances US composition-of-matter patents for its NTI164 product for neurological disorders. Final patents ‘expected within the coming months’. (NTI)

Island Pharmaceuticals (ASX: ILA) secures a Singapore patent for ISLA-101, protecting its use against infections caused by the Dengue and Chikungunya viruses. (ILA)

🪑 Patent down the hatches! That’s the third patent announcement today: SPL, NTI and ILA.

Rhythm Biosciences (ASX: RHY) launches a targeted GP awareness campaign for ColoSTAT®, leveraging market research findings indicating significant colonoscopy backlogs. (RHY)

Zelira Therapeutics (ASX: ZLD) issued 1,250,000 shares following the conversion of options at an issue price of USD 0.40 per share. (ZLD)

🪑 Such a strange one.

ZLD was suspended, and this conversion was at a MASSIVE premium to the last traded price.

Just get the cash in the door?

Noxopharm Limited (ASX: NOX) announces a $1M grant from the Medical Research Future Fund to the Hudson Institute for a project using NOX’s platform to develop a cream for childbirth injuries. (NOX)

Tetratherix (ASX: TTX), commercial partner for nasal spray GLP-1s, peptides and hormones, Superpower Health, just launched a campaign with NBA superstar Giannis Antetokounmpo. (LinkedIn)

🪑 Superpower is pulling out all the stops to advertise its products and services. TTX will be a major beneficiary of this advertising budget, as the greater the volume of product purchased from Superpower, the more money TTX will make per sale.

The first nasal spray GLP-1, hormone and peptide products are yet to launch… but expect that when they do, there will be a LOT of interest.

Neurolink published an update regarding a major breakthrough in the transdural procedure (getting their microchip into the brain):

🪑 What stood out to me about this is just how much effort is required to address the “invasiveness” of the brain-computer interface surgery.

My recent Armchair Analyst Pick, Control Bionics (ASX: CBL), uses surface EMG to read brain signals and let humans control computers with their minds.

But the mind control doesn’t require brain surgery; it's just an electrode on the skin.

Neurolink and CBL sit on two different ends of the spectrum for brain-computer interface, each with their pros and cons:

Hi there, Armchair Army, Surgeon Dan back again.

I’m a doctor who has worked in urology for over 7 years across hospitals in Western Australia.

I’m also an ASX Stock Punter.

Today I’m looking at Optiscan Imaging (ASX: OIL), a company developing a handheld medical device to improve the outcome of cancer surgery.

It immediately caught my attention because it solves a major problem every cancer surgeon faces.

Making sure that when we cut the cancer out, nothing gets left behind.

You’ll be surprised at just how rudimentary the tools we have as surgeons are for solving this problem.

It’s essentially our fingers and our eyes.

Whenever I talk to one of my colleagues about the product, I can see their eyes sparkle as they think about how it could improve their dissection, surgical outcomes and workflow.

The company is just 12 months away from three FDA submissions, and then getting this product to market.

After speaking with CEO Dr Camile Farah, researching the company and writing this piece, I bought some shares.

Optiscan was founded at Monash University in 1994, and has been ASX-listed since 1997. 

For most of that history, Optiscan was an OEM, building tech for other companies to brand and sell. 

OEM = Original Equipment Manufacturer.

The first product was a flexible confocal laser endomicroscope developed with Pentax for Gastrointestinal applications. 

(basically a camera that is used to test your gut health)

That work led to the first CPT codes for endomicroscopy in the US. 

Then Optiscan built the Convivo, a rigid neurosurgical scope for Carl Zeiss. 

This product is FDA-approved, CE-marked, TGA-cleared, and currently generates revenue.

For 25 years, that was the business… 

Make the tech, let someone else brand it and sell it. 

(Which, in my opinion, is a tragic business model when your tech is this good.)

Five years ago, Optiscan started a deliberate pivot to private label.

Sell Optiscan-branded devices directly, control the narrative, capture the margin, partner to scale.

That five-year pivot is in its final year. 

The products? 

A handheld touch-and-see probe that lets a surgeon see cancer cells in real time.

InVue: cellular imaging during surgery (the surgical version).

InForm: digital frozen section in seconds (the pathology lab version).

FDA submissions are scheduled for mid-next year.

The third device, InSpecta (for Vetinarians), is currently awaiting the result of its FDA submission.

Dr Camile Farah has been the CEO since 2022.

He was working in oral pathology, deeply familiar with optical imaging, but hadn’t heard of Optiscan. 

So when someone told him about a Melbourne company making a touch-and-see probe that showed cells in real time, his reaction was very similar to mine.

What is it? And how can I get it?

Optiscan shipped him a unit; he used it in his own practice, and it changed his entire view of what was technologically possible. 

He stepped back from full-time clinical work to run the company, though, importantly, he still uses the device in select cases and remains a practising pathologist.

Optiscan’s hero products are InVue and InForm.

They provide real-time, slide-free cancer imaging at the point of contact with the tissue sample.

Now, let me tell you why that is so important. 

Every week, surgeons spend hours operating at the very tip of modern medicine.

(Two-million-dollar robots, four-arm precision, 3D high-definition vision, and AI-assisted instrument tracking- you name it… I’ve used it)

Then, at the most important moment of the operation, the moment that decides whether the cancer is gone, we have two tools at our disposal.

Our eyes and our fingers.

This is all that stands in the way of a patient walking out of the surgery cancer-free, or coming back for repeat operations.

With all the high-tech tools that we as surgeons have at our disposal… our best “quality control” is a finger and an eyeball.

This is for every cancer surgery worldwide.

What happens is that we cut out the cancer and poke around by feel or by general appearance to assess the margin.

Margin = the rim of healthy, non-cancerous tissue removed alongside a tumour.

Send a biopsy to a pathology lab to test if the cancer is gone.

… Then wait 2 weeks.

I’ve watched this play out hundreds of times. 

If it says negative margins? Exhale. File. Move on.

If it says positive margins? Pick up the phone, ring the patient, have one of the worst conversations in surgical practice.

Mr Smith, the pathology has come back, and unfortunately…

A meta-analysis of 59 studies put the positive surgical margin rate after radical prostatectomy at 25.3%.

One in four.

For robotic prostatectomy specifically: 26.0%.

For nerve-sparing, which is what every surgeon tries to do when possible, 28.0%.

A quarter of the men who walk into the theatre for prostate cancer surgery walk out thinking they’re cured. 

Four to six weeks later, they’re being told they need salvage radiotherapy, high-risk biochemical recurrence monitoring, and possibly hormone therapy.

Positive surgical margins nearly double the risk of recurrence.

And the kicker… 

You can’t just take them back to the theatre and shave more off. 

The prostate is gone. The patient is closed up. 

The horse has bolted.

Breast cancer is the same story, different organ.

Modern US data puts the re-excision rate after lumpectomy at 21.1% in commercial cohorts and 14.9% in Medicare, about one in five. 

And for specific subtypes like invasive lobular carcinoma, the rate is still sitting at 37.6% positive initial margins. 

More than one in three.

Either way, the order of magnitude is the same. 

A meaningful chunk of women undergo breast-conserving surgery, go home thinking it’s done, then get the same email two weeks later.

Sorry, didn’t get it all. We need to go back in.

Going back in is worse than going in for the first time. 

The wound bed is scarred, swollen, distorted, and bleeding. 

You can barely see what you’re doing. 

The cosmetic result is worse. 

The complication rate is worse.

This isn’t a skills problem. It’s a tool problem. 

Alright, so it’s not just our fingers and our eyes… we do have a little bit more.

The best alternative right now to the two-week wait time is called a frozen section.

It’s an intraoperative margin assessment, and the workflow is what you’d expect from a technology developed in the 1950s. 

Frozen section is when a tiny sliver of tissue gets sent to the onsite lab. 

A technician freezes it, slices it on a microtome, stains it, and mounts it on a slide. 

A pathologist puts it under a microscope, makes the call, and rings the surgeon in theatre.

Best case at the Mayo Clinic, which runs the fastest frozen section operation in the world, that’s 10 to 15 minutes.

Standard practice elsewhere? 30 minutes at least. This is my experience.

While the path lab is doing its thing, the patient is under general anaesthetic, the operating room is booked, and everyone is waiting for the phone to ring.

So in practice, it’s not all that common.

(It is used only for major surgeries)

It also doesn’t scale. 

You can only apply a frozen-section one or two strategic margins.

You cannot frozen-section every face of a prostate, every quadrant of a breast lumpectomy, every margin of a head and neck resection.

So the surgeon picks one or two, and crosses fingers on the rest.

Optiscan’s device provides live cellular visualisation to assess margins intraoperatively, aiming to reduce reoperations, positive margins, and pathology turnaround times. 

Intraoperatively = during the surgical operation

A literal pen-sized laser endomicroscope that you spray non-toxic contrast onto, touch against tissue, and see cells in real time as you’re doing the surgery.

The specs for any other surgeons reading this: 

The image on the monitor in the theatre is indistinguishable, to a pathologist, from what they’d see on a glass slide in the path lab… Except the patient is still on the table. 

Five products at various stages of regulatory progression, all running off the same core imaging engine:

InVue works with any robotic surgery brand, as well as open and laparoscopic operations.

Touch tissue → See cells → Move the probe → Image again. 

No tissue destruction. No specimen required.

The surgeon makes a simple call: cancer or no cancer.

There is a software layer that sits on top as well.

Telepathology (phone a friend): an on-call pathologist can remotely view the image and call the margin while the patient is still on the table. 

AI decision support is under development; models have already been built for head and neck and breast cancer. 

The platform is tissue and cancer-agnostic. 

The addressable market is, in principle, all cancer surgery. 

There is no direct competitor doing intraoperative microscopic surgical imaging.

Optiscan is pursuing three concurrent CPT codes.

First, the existing GI endomicroscopy CPT codes.

Codes Optiscan itself helped establish with Pentax. 

Other imaging companies have already piggybacked on them, which is a small, satisfying irony given that Optiscan built the path in the first place.

Second, traditional pathology CPT. 

An InForm image is functionally equivalent to a slide. 

Same workflow at the pathologist’s end, same diagnostic call, same report. Same codes should apply.

(That’s the theory at least)

Third, the digital pathology research CPT pathway. 

The American Medical Association has released research codes for digital pathology built around slide scanning. 

Optiscan says that their imaging is natively digital, no scanning step required. They want to ride that pathway to a Category 1 code over time.

AI decision support is layered on top, initially using procedural codes for the surgery itself.

Three shots on goal, with at least one already operational. 

Not bulletproof. Not bad.

By now you may recall my 5-point scorecard for evaluating medical products. Here’s how Optiscan stacks up.

Massive tick.

Positive surgical margins in prostatectomy are a little over 1 in 4.

In breast cancer, closer to 1 in 3. 

Each re-excision adds to worse cosmetic and emotional damage of a second operation.

The Royal Melbourne Hospital breast cancer study has reached halfway to recruitment. 

In the first 18 cases analysed, Optiscan imaging showed like-for-like cellular concordance with definitive H&E histopathology in both healthy and cancerous tissue. 

Zero adverse events from the fluorescein contrast.

The device sees what the pathologist sees. 

Tick.

The product is a sterile pen-sized probe. The surgeon touches it to tissue (or it’s attached to a robotic arm). The image shows up on the monitor in real time. The surgeon makes a call.

Compared to frozen section: 30 minutes standard, 10 to 15 at Mayo Clinic. 

Where the patient is under anaesthetic, the operating room is booked, and the surgical team is waiting.

The learning curve is short too; any surgeon who can use a laparoscope can use this.

The revenue model is in the right shape, but the reimbursement question remains.

Reimbursement is layered (three concurrent CPT tracks), not all-or-nothing. 

But the GI endomicroscopy codes that Optiscan itself helped establish are already in place, which should make this process smoother.

For the surgeon?

Minimal additional time per case, no workflow disruption, and a tool that potentially eliminates one of the worst phone calls in their job. 

The cost-benefit is favourable.

Not yet.

Headline products are pre-FDA. 510(k) submissions imminent (within 12 months). 

Mid-2027 commercial launch target. 

This is where Optiscan can make the biggest impact.

The technology has been validated in over 150 peer-reviewed publications, but most of those are in GI, neurosurgical or preclinical research, not surgical oncology. 

The surgical use case is still being built, with the number 1 hospital in the world, the Mayo Clinic.

What’s working in Optiscan’s favour:

Once the product is FDA-cleared and Mayo Clinic surgeons start publishing their results, surgeon endorsement will compound. 

But it isn’t there yet.

This is the gap Optiscan needs to fill over the next 24 months. 

Here are the main risks that I see:

Thanks, Dan.

I could read the passion in this one when you sent me the first draft.

It’s clear that this product is not only an interesting investment opportunity, but also solves a real problem that surgeons face every week. 

The main question that I like to answer with these types of products on the cusp of commercialisation is… can they sell it?

Is it a product that is just a nice-to-have? Or is it solving a real problem (both clinical and practical) for the healthcare system?

In this case, it is a resounding yes to both.

Like all medical device products, getting 510(k) approval is just the starting line (it's crazy to think it takes 5 years to get to the starting line… but that’s medtech investing for ya)...

So the real test for the company will come AFTER the 510(k) approvals.

Can they commercialise the product? Will they get a CPT code? Will they have the uptake they expect?

That is the challenge for Optiscan as it approaches this big FDA milestone.

They’ll likely need more capital to finance the commercial rollout; no lead managers for the last two capital raises is interesting.

The pitch is simple.

What CT and MRI did for radiology, Optiscan will do for pathology.

Right now, a core part of cancer surgery is being done with your eyes and a finger.

In ten years (if this product is approved and widely used), that will sound like… well, guessing.

A big thank you to Surgeon Dan for his help on this article and to the CEO of Optiscan, Dr Camile Farah, for sharing the story.

See you all tomorrow,

The Armchair Analyst

PS. If you have any medical device products you'd like Surgeon Dan to review, reply to this email.