Microba’s Therapeutics Pivot and US Expansion Pose Execution Challenges Ahead

Strong Sales Momentum in Australia and UK

Microba Life Sciences Limited (ASX: MAP) has delivered a compelling quarter with its microbiome diagnostic testing products gaining significant traction in both Australia and the United Kingdom. The company’s flagship MetaXplore test saw sales in Australia soar by 201% compared to the prior corresponding period, reaching 3,225 tests in Q3 FY25. This growth was driven primarily by an expanding base of ordering clinicians, while maintaining steady average orders per clinician, signaling broadening clinical acceptance.

In the UK, MetaXplore sales nearly doubled month-on-month in March, representing 39% of gastrointestinal (GI) tests sold, as the company accelerates its transition to full market access by the end of June 2025. This rapid adoption reflects successful clinician engagement and a growing waitlist eager for access to the new diagnostic platform.

MetaPanel Gains Clinical Validation and Strategic Partnerships

Microba’s MetaPanel test, targeting gastrointestinal pathogens in Inflammatory Bowel Disease (IBD) patients, is building momentum in Australia. Q3 sales increased by an extraordinary 1,827% year-on-year, supported by landmark clinical studies led by prominent gastroenterologists. These studies revealed that over 35% of IBD patients experiencing flares tested positive for GI pathogens, with more than 60% of these infections missed by conventional testing methods.

Further bolstering MetaPanel’s clinical adoption, Microba entered a strategic partnership with The Colonoscopy Clinic and Integrated Gut Health, one of Australia’s largest private gastroenterology services. This collaboration aims to integrate Microba’s diagnostic tests into routine clinical protocols, potentially transforming patient management and outcomes in complex GI disorders.

Financial Performance and Strategic Business Transition

Microba projects FY25 revenue between $15.25 million and $16.25 million, representing a 26% to 34% increase over FY24. While total Q3 revenue declined 14% year-on-year to $3.4 million, impacted by the strategic transfer of Research Services to CMC, the core Personal Testing and Supplements segment grew 3.5% to $3.27 million. Cash receipts rose 5% year-on-year to $4.23 million, underpinning the company’s strong operational cash flow.

The company’s cash position remains solid with $12.41 million in cash and equivalents at quarter-end. Microba is navigating a transition to a research and capital-light model for its Therapeutics business, focusing on partnering and non-dilutive funding to advance its pipeline assets, including the lead candidate MAP 315 for ulcerative colitis.

Therapeutics: Partnering and Non-Dilutive Funding Focus

After an intensive research and development phase, Microba’s Therapeutics division is pivoting towards strategic partnerships and alternative funding mechanisms. The company is actively pursuing collaborations with biotech and pharmaceutical partners to in-license MAP 315 and fund its Phase 2 clinical trial without diluting existing shareholders. Additionally, Microba is exploring non-dilutive equity investments and grant-based funding to support clinical development.

In parallel, Microba is advancing next-generation probiotics, leveraging its human microbiome data and assets to disrupt the $79 billion probiotics market. The company has engaged International Flavors & Fragrances (NYSE: IFF) to develop novel microbiome-based allergy treatments, with discussions ongoing for further investment phases.

US Market Entry and Future Outlook

Microba is progressing its US market entry strategy with a focused approach targeting one state and one metropolitan area initially. The company expects to make its first hires before the end of 2025, aiming to capture a share of the $25 billion US diagnostic market. The strong clinical adoption and sales growth in Australia and the UK provide a solid foundation for this expansion.

CEO Dr Luke Reid emphasised the importance of clinical adoption and sales as key growth metrics during this transition, noting that short-term revenue fluctuations are expected due to the evolving revenue mix. The company’s ongoing clinical partnerships, landmark study results, and strategic collaborations position Microba well to capitalize on emerging opportunities in precision microbiome diagnostics and therapeutics.