Medibio Limited Quarterly ASX Update and Cashflows

Quarterly Update and Message from Medibio Limited

SYDNEY, Australia and MINNEAPOLIS, Minn., Oct. 30, 2018 (GLOBE NEWSWIRE) -- Medibio Limited (MEB or the Company) (ASX: MEB)(OTCQB: MDBIF), a mental health technology company provides the following quarterly update:

Key highlights from the quarter

• Announced clinical study results - showing an improvement of more than 20% to current diagnostic standard
  - Achievement of 70% accuracy, 70% sensitivity and 71% specificity results - demonstrating utility as diagnostic aide and long-term monitoring
  - Study results support the FDA DeNovo submission, with FDA clearance expected in Q1 CY2019
• Launched ilumen™ corporate health product (post quarter end)
  - Platform gives employers the ability to offer biometric analysis and objective, data-driven feedback plus mental wellness assessment to employees
  - Contract signed with large Australian employer (post quarter end)
• Advanced scientific evidence - Medibio Chief Medical Officer, Archie Defillo MD, selected to present two clinical abstracts at Mayo Clinic conference in November
• Recognized technology - Medibio named a finalist in the 2018 Optus My Business Awards in health services category
• Received $3.1 million R&D Tax Incentive Refund (post quarter end)

Quality and Regulatory Advancement

The FDA review process continues to move forward as anticipated. Our De Novo application is in the FDA review process and our team is working with the FDA on review of our application for approval. We continue to anticipate an approval in the first calendar quarter of 2019.

Our technology offers a novel approach to psychophysiological markers of mental health and physical wellbeing, specifically designed for psychiatrists, psychologists, and general practitioners that are seeking objective measures to help diagnose and monitor depression. We are seeking to change the way mental health is viewed, by providing an objective, non-invasive, convenient means to diagnose and monitor mental illness.

Having already achieved the CE Mark from Europe and TGA clearance from the Therapeutic Goods Association in Australia, we anticipate a successful FDA approval in the U.S.

The truly innovative nature of our technology required that we use the De Novo pathway for FDA submission. Following our confirmatory study - DX04 - we presented the sensitivity, specificity and accuracy of our technology to the FDA as supportive clinical evidence for the current De Novo submission.

Scientific & Technology Advancement

Mayo Clinic Convergence Neuroscience 2018
Two clinical abstracts by Defillo et al. have been accepted for presentation as part of the Mayo Clinic Convergence Neuroscience 2018 Course. Both presentations are based on Medibio’s technology, the algorithm and DX04 clinical study. Dr. Defillo will share the following abstract presentations during the event to be held on November 8‐10, 2018.

1.  A Machine Learning Based Approach to Identify Heart Rate Variability Patterns Serving as a Diagnostic Aid for Major Depressive Episodes.

2.  A Novel Technology in Mental Health Variations in Cardio‐Autonomic Function Used as Diagnostic Support for Major Depressive Episodes.

Dr. Defillo’s acceptance at the Mayo Convergence Neuroscience Course is further endorsement of Medibio’s scientific endeavours and is a testament to our pursuit of excellence in the field of mental health.

FDA Clinical Trial Results
We announced results from our confirmatory clinical study evaluating the accuracy of our DDA algorithm. Results showed statistical accuracy of the algorithm to detect a Major Depressive Episode (MDE). This validation is a significant achievement in the Company’s development of an objective test for aiding in the diagnosis of depression in patient care. We are excited by the findings of the clinical study and believe the results and medical needs for our technology support our FDA DeNovo application.

Key benefits of the clinical study results include:

1. Demonstration of effectiveness as an adjunctive diagnostic aide
2. Accuracy of 70% with 70% sensitivity and 71% specificity.
3. Results indicated 20-40% improvement from current diagnostic standard^[1][2][3][4]
4. Patent-pending algorithm provides sophisticated and accurate measurements; potential for long-term monitoring of mental disorders.
5. Study targeted general population in a normal-daily-home environment- a step closer to commercialization.
6. Generate academic work and scientific publications in t support of the FDA DeNovo submission.

The technology is a step forward in the search for objective digital biomarkers of depression and other mental illnesses supported by clinical prediction models, taking into consideration that inter-rater disagreement is common in mental health conditions.

Medical benefits of the Medibio algorithm is the improvement of diagnostic sensitivity and specificity, and reduction of under-diagnosis, as compared to patients who only received clinical assessments. The results provided further validation of Medibio’s proposition that psychiatric conditions differentially affect the autonomic nervous system (ANS), resulting in anomalies of cardiac and sleep functions.

Medibio’s algorithm distinguished accurately between individuals with MDE and non-depressed controls in 70%-71%. The algorithm is designed to provide mental health practitioners with an objective technology to aide in assessment of MDE. These results are superior to known depressive inter-rater agreement values that range from 0.64-0.48^1,2,3,4.

Following release of our results, we hosted a teleconference to discuss the findings and answer investor questions in a transparent approach for all of us to share in the clinical process. Topics included the importance of the study to Medibio’s technology, a general overview of the study and results, supporting methodology, and comparison to prior studies. Participants on the call included:

- Brian Mower, CFO, Interim CEO, Medibio
- Archie Defillo, Chief Medical Officer, Medibio
- Franklyn Prendergast, M.D., Ph.D., Chairman of Medibio Scientific Advisory Board
- Marie Olseth, M.D., Medibio Scientific Advisory Board, Board-Certified Adult Psychiatrist.
- Amy Fowler, RAC, JD, Gardner Law, Medibio legal counsel focused on regulatory.
- Melissa Martinson, MS, Ph.D., President Technomics Research; statistical analysis focus.

[1] Mulsant BH., et al. Interrater reliability in clinical trials of depressive disorders. AM J Psychiatry. 2002 Sept: 159(9): 1598-1600
[2] Lieblich Samuel, et.al. High heterogeneity and low reliability in the diagnosis of major depression will impair the development of new drugs: BJPsych Open (2015) 1, e5–e7.
[3] Cairney J., et al. Evaluation of 2 measures of psychological distress as screeners for depression in the general population. The Canadian Journal of Psychiatry 2007 Feb: Vol 52(2).
[4] Einfeld S., et al. Inter-Rater Reliability of the Diagnoses of Psychosis and Depression in Individuals with Intellectual Disabilities: 2007 Sept: 20 (5): 384-390

Product Advancement

ilumen™ Product Launch
We have continued development of our corporate health strategy in Australia to include a program that enlists employers to become actively involved in mental health and wellness of their employees. In October 2018, we launched ilumen™, our second Corporate Health product, to coincide with Australia’s Mental Health Month and World Mental Health Day.

ilumen™, a product and platform for corporate customers, gives employers the ability to offer biometric analysis and objective, data-driven feedback along with a mental wellness assessment to their employees. The upgraded platform allows employees to access and monitor this data from their personal devices, measuring and tracking biometrics through the use of wearable technology over a period of time.

Participants can proactively learn about coping strategies, resources, and personal development plans to better manage stress and strain from life and work.  Employee-specific features of the ilumen™ platform include:

• Access to personalised support and education resources to help improve mental wellness
• Ability to monitor digital biometric changes and identify how and when personal lifestyle modifications influence mental wellness
• Improved biometric integration with supported Garmin and Fitbit wearable devices.

ilumen™ provides employers with access to a de-identified, aggregate-level dashboard to support informed decision-making, improved team performance, and increased employee well-being. Many companies have health care plans in place to address physical health. Medibio's platform allows employers to extend support to cover mental health, ushering in a new era of workplace wellness.

Our advancements in the Corporate Health offering have a core focus on designing products and services to help organisations optimise workforce performance, minimise risk, and provide better care to the people that power their businesses.

A contract signed by a large Australian employer confirms the market acceptance of our corporate wellness technology. Under the terms of the contract, ilumen™ will be offered to 8,000 personnel over a six-week engagement that commenced in October 2018. The contract is valued at $30,000 for the six-week engagement.

Medibio is also in discussions with other large organisations and are hopeful of further success in rolling out ilumen.

Optus My Business Award
We are a finalist in the Health Services Business of the Year category at the 2018 Optus My Business Awards, the premier annual event for small and medium-sized enterprises. The awards cover 28 categories and acknowledges best practice within a particular industry. Winners will be announced on 29 November 2018.

Corporate Advancement

To stabilize the Company and continue progressing the Company’s objectives following the departure of the former CEO, Brian Mower was appointed as Interim CEO from 28 August 2018.   Mr. Mower is also the Company’s Chief Financial Officer and has been part of the Medibio team since April 2017.

The Board engaged an executive recruiting firm to lead the efforts in finding a new CEO.  Peter Carlisle and Dr. Franklyn Prendergast have led our Board’s involvement in the CEO search.  We have seen significant interest in the position and are well advanced towards an appointment.  The process includes screening candidates by the recruiting firm, interviews with the management team, individual and group interviews with our Board of Directors, a full psychological assessment, and a thorough employment history and personal background check.  We are determined to get the right candidate with proven ability to advance the company, assist in regulatory and scientific advancements, and guide the technology along the path of commercialization.

Medibio appointed Peter Carlisle as Vice-Chairman to support the Company’s expansion in the US, where Peter’s valuable and unique skills and background in marketing, public relations and communications, contract negotiations, and law will help the company progress with its innovative mental health platform. Mr Carlisle has been with the Company’s board since June 2017.

We appointed Jennifer Solitario as Senior Vice President of Corporate Health. Ms. Solitario is a proficient leader with more than 20 years of experience in the health insurance industry and brings proven and extensive contract negotiation skills.  Ms Solitario will be located in the Company’s Perth office.

Lindsey Hagan joined Medibio as VP of Integrated Health Systems in September to partner with the technology and clinical teams on product strategy and lead business development initiatives. Ms Hagan has more than 13 years of sales experience working with medical device, technology, pharmaceutical, and healthcare organisations.

Quarterly Expenditure and Cash at Bank
In October, Medibio received A$3.1 million from the Australian Taxation Office under the Research and Development Tax Incentive Program. The cash refund is related to expenditure on eligible Australian and Overseas R&D activities conducted during the financial year ended 30 June 2018.  

The Company’s cash position at 30 September 2018 was A$1.5 million. During the quarter, the Company had $0.2 million inflows and $4.8 million outflows of cash.  The cash receipts represent payments from customers and interest.  Cash expenditures included A$0.7M for legal and other costs associated with the departures of former employees and contractors of the Company.  A$4.1 million cash expenditures were used for recurring business activities, including the development and commercialization of products, business integration, and expenses incurred for regulatory filings.   In addition to the receipt of the Australian R&D tax grant, the Company anticipates additional cash inflows from customer payments, other grants, and payments from partly paid shareholders.  Anticipated cash available for use by the Company is A$4.6 million.

We are mindful of the cash position and have taken certain cost reduction actions, including termination of vendor contracts and reduction in staff, to reduce net future quarterly cash outlays while maintaining an adequate infrastructure to support organisational goals following FDA approval.  Upon appointment of the new CEO, the CFO role will be transitioned to a part time role.  We continue to review spending with the goal of bringing net quarterly cash spend to under $3.0 million.  Our focus will continue to be on product development, scientific research, regulatory filings, and advancing our technology in commercialisation.

About Medibio Limited
Medibio (ASX: MEB) (OTCQB: MDBIF) is a mental health technology company that has pioneered the use of objective biometrics to assist in the screening, diagnosing, monitoring and management of depression and other mental health conditions. The company was founded in Australia, with offices located in Melbourne (VIC), Perth (WA) and Minneapolis, MN. Medibio is listed on the Australian Securities Exchange Ltd and trades on the OTCQB Venture Market. Investors can find additional information on www.otcmarkets.com and www.asx.com.au.