Sight for Sore Eyes: The Cambium Bio Story (CMB)

Good morning, Armchair Army,

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

A Phase 3 clinical trial is the most pivotal moment for any company…

Years of development, and the final hurdle before registration.

Normally, a company listed on the ASX will be shouting from the rooftops, doing the roadshows and telling anyone that will listen about their upcoming trial.

Not this next company on my Biotech 165 Challenge.

This one is a bit different.

A Phase 3 clinical trial “scheduled” for the end of the year in dry eye disease… 

IF funding is secured.

(and that is a big IF)

A company that you most likely wouldn’t have heard of.

No broker on its recent strategic raises.

No obvious investor-relations machine.

Market cap of $12 million.

The last four capital raises have all been anchored by major or strategic shareholders…

And the last three were done at a premium.

When I spoke to the CEO earlier this year, he told me:

“I conduct capital raises as if the company is private.”

Negotiating directly with strategic investors, agreeing on a valuation and issuing the shares.

No prolonged marketing campaign.

No investor roadshows to the Aussie fundies.

When I asked what the most important thing about being a listed company, he said:

“From a compliance and governance standpoint, being listed helps attract strategic partners”

(Not the normal answer that you’d get!)

You’ll have to go back to October last year to find a company presentation announced to the market.

An ‘average daily volume’ of just 4,318 shares.

A public company run almost entirely like a private one.

The largest shareholder, ZYBT, currently owns 39.61%.

The top 20 shareholders own 90.58% of the company.

At a market cap of $12 million, and just on the cusp of a Phase 3 clinical trial…

… you could say that it is potentially undervalued.

But as I’ve written before, undervalued companies don’t always make for good trades.

So, that’s what today is about.

A deep dive into a completely forgotten company on the ASX to work out…

Is the stock undervalued?

OR…

Has the market been right to leave this one alone?

The next company in my Biotech 165 Challenge…

Cambium Bio (ASX: CMB).

But first…

CSL (ASX: CSL) signs agreements with the U.S. to lower drug prices and expand its $1.5 billion plasma production capacity in Illinois. (CSL)

🪑 This should de-risk the company from any tariffs or other geopolitical issues.

Optiscan Imaging (ASX: OIL) initiates a US-based study with Mayo Clinic to evaluate its InVue™ and InForm™ platforms in head and neck cancer surgery. (OIL)

🪑 All leading up to an FDA 510(k) approval submission later this year.

Memphasys (ASX: MEM) enters a €526,500 agreement with NOVIVITAE for exclusive commercialisation of the Felix™ System in five Nordic countries. (MEM)

🪑 Commercialisation ticking along nicely!

Noxopharm (ASX: NOX) and CSL (ASX: CSL) present promising data from NOX’s Sofra platform at the ISRV conference. Using its technology to improve mRNA vaccines. (NOX)

🪑 mRNA vaccines are back in vogue since Moderna published results from its Phase 3 “cancer vaccine” trial a couple of weeks ago.

Ramsay Health Care (ASX: RHC) completes acquisition of National Capital Private Hospital for $251M. (RHC)

Echo IQ (ASX: EIQ) appoints Scott Wilkin, a veteran with 35 years in global healthcare investment, as a Non-Executive Director to support US commercialisation efforts. (EIQ)

Telix Pharmaceuticals (ASX: TLX) appoints David Gill as Chair of the Board, succeeding Dr Mark Nelson, who remains as a Non-Executive Director. (TLX)

LTR Pharma Limited (ASX: LTP) signs an exclusive pilot commercialisation agreement with Marius Pharmaceuticals for an FDA-approved oral testosterone therapy in Australia. (LTP)

🪑 New product. Nice.

Six Australian infectious disease ventures share A$10.5 million in funding round. (Biotech Dispatch)

Eli Lilly is set to acquire Merida Biosciences for up to US$2.9B, expanding autoimmune and allergic disease pipeline. (WSJ)

🪑The Eli shopping spree continues.

Quick Armchair Update…

I need to issue a correction to an article that I wrote last week, “The Battle for Genetic Signatures”.

When I was recounting the history of Genetic Signatures, I wrote that the previous CEO got a 50% pay cut and resigned. 

This is incorrect. I misread this announcement and interpreted it as a pay cut; it was actually a small increase in base remuneration.

The article is now updated on the website.

Emyria Limited (ASX: EMD) reports a 191% increase in clinical services revenue to $4.05M for FY 2026. (EMD, held, Armchair Pick)

🪑Closing out a good year for EMD, I’m looking forward to the company's end-of-year presentation and potential outlook for FY27. 

BLS Pharmaceuticals (ASX: BLS) reports a 153% increase in revenue to $74.2M and a 214% rise in net profit to $15.4M for FY 2026. (BLS)

🪑The stock was up 15% not only on these results, but also because it set guidance for FY27: $105 to $115 million in revenue. A big jump.

A little accounting quirk for you. Ceryvyn Therapeutics (ASX: CYV), the old Opthea, reported a profit of A$330,000,000 for the year because they “didn’t have to pay” the creditor under the Development Funding Agreement. (CYV)

Percheron Therapeutics (ASX: PER) secures a $2.3M institutional placement at $0.005. (PER)

🪑 I participated.

A little bit of history for you…

Cambium Bio (ASX: CMB) was formerly Regeneus - an ASX-listed stem-cell company that spent years trying to turn its regenerative-medicine platform into a licensing business.

The final nail in the coffin came in 2023 when its major Japanese licensing partner, Kyocera, terminated its agreement.

The stock tanked.

Three months later it announced a merger with a private company.

… effectively a reverse takeover.

The company that merged in, Cambium, brought an asset for dry eye disease that had completed a Phase 1/2 clinical trial.

Since the merger, almost everything Cambium has done has focused on getting that drug into a pivotal Phase 3 study.

FDA Fast Track designation secured.

Tick.

IND amendments and manufacturing comparability requirements completed.

Tick.

Potency-assurance strategy developed.

Tick.

Manufacturing capacity reserved and clinical-batch work progressed.

Tick.

Australian and US ethics approvals secured for the updated protocol.

Tick.

Finally, following a Type D meeting, the FDA confirmed that one adequate and well-controlled pivotal study, together with confirmatory evidence, represented a reasonable pathway to support a Biologics Licence Application.

Major tick.

The last piece of the puzzle?

Funding.

The company had just $1.1 million in the bank at the end of June.

Since then, it has raised another $1 million (and has a $3.75 million R&D advance facility, currently undrawn).

That provides some runway.

It does not fund a 475-patient Phase 3 trial.

I don’t think the company will be raising the full amount through Australian broker networks anytime soon, however.

(Famous last words)

More likely, Cambium will do what it’s always done…

Negotiate with a strategic investor around what management believes the company is worth, rather than where a handful of shares last traded.

According to the outlook section of the annual report, the company’s objective is to dose the first patient in Q4 this calendar year.

Subject to additional funding.

This funding is the main overhang on the stock and its ability to commence the Phase 3 trial.

But before a sophisticated biotech investor writes that cheque, they will want three questions answered:

How does the drug work?

Is there an unmet need, and how big is the prize?

And what are the chances of success?

So… let’s dive in.

Cambium’s drug is a donor-derived biologic.

Which means that it comes from human donations - specifically for platelets.

While platelets are best known for clotting blood, they also carry a bundle of growth factors and proteins the body uses to repair damaged tissue.

Like a tiny biological repair kit.

Cambium takes platelets donated by healthy people, breaks them open and pools the useful contents into a liquid serum.

It also REMOVES the fibrinogen, the sticky, clot-forming protein that can make crude platelet products hard to formulate.

The result is an off-the-shelf, donor-derived biologic eye drop for dry eye disease. 

Designed to be like a regenerative product naturally found in blood…

NOT a conventional artificial tear.

Dry eye disease is not a small market.

Roughly 17 million people in the US have been diagnosed with dry eye disease.

While there are a number of products on the market…

Not many people stay on them.

Benchmarking the three main products, we see up to 70% discontinuation after a single prescription and an 85-90% drop-off within 6 months.

The main issues include burning, blurred vision, itching and the fact that sometimes the drugs just don’t work to relieve dry eyes.

My wife actually has dry eye disease, and she’s tried multiple different drugs.

She said she’s only ever found one product that has worked for her, and all the others just make your eyes drier.

Commercial appetite for a good dry-eye asset is well established.

BUT…

Several products are already on the market.

Restasis. Xiidra. Cequa. Tyrvaya. Miebo.

Cambium’s product therefore needs to work quickly enough, comfortably enough and consistently enough that patients keep using it four times a day.

Several transactions have occurred in the space.

(I’ll let you guys read those numbers, but transactions range from US$300 million to US$5 billion depending on the stage of development)

The largest transactions involved a specific product in the market.

Cambium has yet to run a registrational trial.

This is the equation for any large financier.

Is the prize worth it?

What are the chances of success?

The Phase 3 clinical trial design is a 475-patient study in Australia and the US across 9 weeks. 

1:1 randomised with CAM-101 against a vehicle control.

It also includes a long-term safety study and two primary endpoints.

The first endpoint objectively measures corneal surface damage.

Cornea = Surface of the eye.

A clinician places fluorescein dye into the patient’s eye and examines it under blue light.

Healthy corneal cells largely keep the dye out.

But where cells are damaged, missing or poorly connected, the dye collects and lights up as tiny green dots.

The cornea is divided into different regions; each region is graded for staining, and those grades are added together to produce the total score.

In simple terms:

Dry-eye drugs need to do more than make patients say their eyes feel better.

They also need to show that the physical surface of the eye is healing.

VAS stands for Visual Analogue Scale.

The patient is asked to rate their eye discomfort on a continuous scale from:

Patients in the trial must score at least 40, meaning they need to experience a meaningful level of discomfort before entering.

After nine weeks, Cambium will compare how much that score has fallen in patients receiving CAM-101 against those receiving the vehicle eye drop.

The lower the score, the better.

For example, if someone begins with a discomfort score of 70 and finishes with 30, their symptoms have improved by 40 points.

But it is not enough for the CAM-101 group to improve.

It needs to improve more than the vehicle group (the placebo control).

Cambium needs to demonstrate that CAM-101 does two things after nine weeks:

As I mentioned before, Cambium ran a Phase 1/2 clinical trial with 64 patients across the US.

This earlier trial was run in dry eye disease due to cGvHD.

Cambium’s trial targets a similar but slightly different indication: moderate-to-severe dry eye disease.

The earlier study’s primary job was to test safety and tolerability.

Safety tick.

The efficacy endpoints were secondary and exploratory.

At Day 42, the large dose showed a ~33-point improvement over the vehicle on the VAS Index.

Efficacy tick for “does the patient feel better”.

It also produced statistically significant improvements in eye dryness, burning and stinging, photophobia, grittiness and ocular discomfort scores.

But on the “does the eye look healthier” measure…

Corneal fluorescein staining was not improved.

According to the CEO, in the trial CRO made an execution error with this endpoint in the Phase 2 study (a mix-up of measurement scales).

The company due-dilligenced this particular point extensively before the acquisition.

So…

While the trial showed in a small study that patients felt better using CAM-101, it did not show that the eye looked healthier using the endpoint set for this Phase 3 clinical trial.

In a peer-reviewed journal, the author explains what may have happened.

Essentially, because the baseline dry eye disease was so severe, staining improvements may have been missed. 

Also, the six-week treatment duration may not have been long enough.

A theory… but that’s all.

In the Phase 3 clinical study, the company plans to use specialised cameras and a machine learning algorithm to assess staining improvements more accurately.

This should mitigate some of the “measurement risk” from the earlier study.

Notably, this was a small patient study, with just 64 patients. 

Cambium will not only look to replicate these results in a larger study.

But it will actually have to beat them to meet the primary endpoints.

I would describe Cambium’s development strategy as clinically aggressive.

The company is effectively moving from a small Phase 1/2 safety study into a 475-patient registrational study in a broader dry-eye population.

No conventional, well-powered Phase 2b trial to confirm both planned Phase 3 endpoints.

It’s essentially “skipping” the Phase 2b.

This Phase 3 study needs to confirm two things.

FIRST, the promising symptom signal… which was only established in a small trial 

AND 

Establish the objective signal that the earlier trial did not show… even though it may be explained.

That makes this upcoming Phase 3 trial a genuine guess as to the result.

To me, this is like your “swing-for-the-fences” step-out oil-and-gas well.

If it hits, it could hit big.

If it misses, nobody can say the warning wasn’t there in the earlier data.

For Cambium, I would split the investment thesis into two bets.

(Like a two-leg multi on Sportsbet)

The first leg is financing.

Can the CEO secure enough committed capital to begin the trial?

If the company raises enough to fully fund the trial, the stock should re-rate.

The second leg is the clinical trial itself.

In my opinion, there are still plenty of questions about the Phase 1/2 data to consider this Phase 3 confirmatory of an earlier Phase 2 study.

… it’s more of a high-risk exploration.

At $12 million, the market is currently pricing in plenty of doubt about either of the legs of the bet.

BUT if Cambium secures enough funding to run the trial properly, the market may want to speculate…

… AND if they have a successful trial and a drug approved, well, it's a US$5.4 billion market in front of them.

The company currently guides to first patient by the end of this year (subject to financing) and topline data in Q4 2027.

Once (if) the trial starts… We’re on the clock.

Until then, it’s an unfunded trial that sits on the shelf waiting for a cheque.

The challenge with looking to play something like this as a small shareholder is that the stock is illiquid and not actively promoted.

Which means that you’ll be at the whim of the company’s own timelines.

Over 90% of the top 20 own the stock, meaning there is a 10% free float.

… that’s not much to go around.

Think of this one like a private investment.

Hard to get in, hard to get out.

… and one that really needs to find a strategic investor to finance the Phase 3 clincal trial.

A big thank you to Karolis Rosickas for sharing the Cambium story.

See you all tomorrow,

The Armchair Analyst.