Good morning,
Welcome to today’s edition of The Armchair Analyst, a 5-minute daily update on the ASX life-sciences sector.
Today, I am going to take a look at a company that has been in operation for more than 25 years.
Along the way, it learned a hard lesson…
Platform technologies live or die by their business models, and no small biotech has the capital to pursue every shiny new indication.
This is the 25+ year story of Starpharma (ASX: SPL), and how it learned that the platform was the real prize all along.
But first…
The Pulse Check
Neuren Pharmaceuticals (ASX: NEU) was denied marketing approval of its trofinetide product for Rett syndrome in Europe. An appeal will be lodged this month. (NEU)
🪑 Ouch.
HITIQ (ASX: HIQ) secures a three-year exclusive partnership with Hockey Australia for its concussion detection mouthguard. (HIQ)
Memphasys (ASX: MEM) submits regulatory approval for its Felix™ Sperm Separation System in Australia with the TGA (approval expected by April 2026) and India’s CDSCO (outcome in six months). (MEM)
Rhythm Biosciences (ASX: RHY) secures a multi-year commercial manufacturing agreement with ISO-certified manufacturer Quansys Biosciences for its colorectal cancer diagnostics kits. (RHY)
Imricor Medical Systems (ASX: IMR) announces Oklahoma Heart Institute as the fourth U.S. site for its MRI-guided cardiac ablation trial. (IMR)
Biome Australia (ASX: BIO) secures ethics approval for a 240-participant clinical trial of its probiotic strain BMB18. (BIO)
Telix Pharmaceuticals (ASX: TLX) chairman Tiffany Olson has resigned. (TLX)
White House delays TrumpRx launch amid anti-kickback concerns. (Biospace)
Opinion: Pricing Transparency Is Coming to the Pharma Industry. (Biospace)
Opinion: The biopharma industry outlook on 2026: Optimism and tension. (Biopharma Dive)
Could smart patches be the next wearables boom? (Medical Device Network)
Cash Injection
Bain Capital has engaged three investment banks to lead a public listing of its aged-care business, Estia Health, targeting a $700 million IPO. (AFR)
Lexicon Pharmaceuticals raises US$94.6M in a public offering for drug-candidate R&D. (Global Newswire)
Reed Jobs (son of Steve) is set to raise US$350 million for the Yosemite Cancer Research Fund. (Forbes)
M&A, Big Pharma Wants a Wife
Genentech secures the global licence for an RNAi platform from Sanegene Bio for US$200M upfront and US$1.5B in milestones. (PR Newswire)
Under the Microscope
The idea of “platform technologies” is becoming a recurring theme on The Armchair Analysts.
Nyrada (NYR), Noxopharm (NOX), Tetratherix (TTX)…
As I mentioned in my Tetratherix profile, all biotechs are, to some extent, platform technologies…
Drugs can show promise across different applications, indications, and targets.
The problem is that each new indication is a drain on resources and capital.
Early-stage biotech companies have only so much capital to deploy, so they generally pick ONE lane.
In theory, a platform technology sounds attractive.
But in practice, it is much harder to execute.
Companies that are “platform first” tend to perform best…
But once you’ve developed the platform, the next logical question is: will anyone use it?
The next company on my Biotech 165 Challenge has been around for over 25 years…
One of the very first ASX-listed companies to take an asset all the way from benchtop studies through to a product in market.
Along the way, it learned a hard lesson: platform technologies live or die by the business model…
And no small biotech can do everything.
This is the Starpharma story (ASX: SPL)
What’s the story?
If the mantra “what doesn’t kill you makes you stronger” were a stock… Starpharma (ASX: SPL) would be right up there.
Starpharma was founded in 2000, with its core technology a dendrimer platform.
Dendri-whats?
Dendrimers are nanomolecules that can be attached to drugs to help them reach their target sites.
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Think of it like the Chain Chomp power-up in a game of Mario Kart.
(Where Mario is the drug being delivered by the Chain Chomp to the desired target)
It’s the classic platform technology play: a delivery system that can be used for a range of drugs.
Starpharma’s strategy today is not about developing new drug technologies but about enabling existing drugs to perform more effectively and efficiently.
Remember, platforms are attractive because they offer companies a wide range of choices and create new, innovative opportunities as they gain validation.
… and it is all on someone else’s dime.
But for Starpharma to reach this realisation and focus, it required 25 years of development, building on one or two assets, and then returning to the drawing board.
Fun fact: as I was doing my research on the company, I realised that Dimerix was actually a spin-off of Starpharma in 2005; that’s how old the company is.
Starpharma was a spin-out from the CSIRO in 1996, and it listed on the ASX in 2000.
The company’s first asset, VivaGel, advanced through clinical trials to eventual product registration in 2014, following IND approval in 2003.
(VivaGel is a product still sold today and is an anti-viral for Bacterial Vaginosis.)
In 2008, Starpharma signed a deal with Durex (a major condom brand), validating the technology beyond pharmaceutical applications and establishing proof of concept for revenue generation.
In 2014, the VivaGel-coated condom was approved in Japan, and in 2015 it was approved in Europe.
In 2016, the company first demonstrated the platform's potential through a partnership with AstraZeneca to apply its dendrimer drug delivery to a range of cancer assets.
In 2018, the cracks began to show in the VivaGel business model: the FDA sought additional clinical data before approving the product.
In 2020, the company made a slight pivot to use its dendrimer drug-delivery technology in a nasal spray for viral infections.
(It was the pandemic after all)
2021 was the company's peak, driven by tailwinds from developing a COVID-19 product and the AstraZeneca partnership.
This was the top of the mountain in the ASX 300, with a share price of $2.52.
Then, it all started to unravel.
Slow sales from its VivaGel product, no resolution to the FDA approvals, COVID-19 winding down, a distribution partnership gone arwy and the AstraZeneca partnership put on ice.
By late 2023, the company was again a microcap, trading at ~15 cents.
The challenge for the company during that period was that, although it was a platform technology, it was chasing too many rabbit holes and spreading its attention too thin.
This is the downside of a platform technology: every new opportunity appears promising… until you run out of capital.
New management was brought in to do a hard reset on the company.
And it is only now that the green shoots are starting to appear.
There is a fantastic “business update” that outlines the new direction published in 2024:
(Source, Starpharma 2024)
It’s one of the best business updates and strategy documents I’ve read from any ASX-listed company. I highly recommend reading it.
When you take away all the noise (chasing the ‘hot’ COVID-19 asset, the FDA approval that never came, the AstraZeneca walkaway and the distribution partner that wouldn’t lift a finger…)
Underneath it all was an amazing platform that had meaningful applications for drug delivery.
It just wasn’t being used to its full potential.
Less than 18 months after the new strategy document was published, Starpharma secured its beachhead partnership to validate the strategy…
A US$564M licensing agreement with Genentech, a member of the Roche Group.
Shortly thereafter, Starpharma signed another licencing agreement with Radiopharm under its Star Navigator program.
(A program to enable companies to evaluate their dendrimer drug-delivery platform)
The partnerships started to roll through… and I expect more to come in the future.
Speaking to the CEO, Cheryl Maley, who led the business review, it was clear that one of Starpharma's biggest assets was its staff.
People who had been working on dendrimer technology for over 20 years had extensive knowledge available to potential partners on how to use the platform.
This deep knowledge was invaluable in securing the Genentech deal.
Starpharam was never a sales company, or a drug development company… it was always a platform company.
But sometimes it just takes a fresh set of eyes and the full buy-in of the organisation to get there.
The next challenge will be to bring new partners along for the journey, while Genentech is a great start, Starpharma’s success now depends on more.
As a platform play (with a decent headcount), Starpharam will need to rely on licensing deals to generate revenue.
This is a challenge, and a key risk for any platform play.
But the upside, if it does get there, is a “free look” at any technology it licences out… which can be done over and over and over and over again.
That’s the beauty of a platform.
A big thank you to Cheryl Maley for the coffee last week and for helping me to tell the Starpharma story.
See you all tomorrow,
The Armchair Analyst
PS. Tomorrow I’ve got something special lined up… stay tuned.
