Can Cleo Diagnostics Turn $4M Loss into Ovarian Cancer Test Breakthrough?

Financial Performance and Operational Focus

Cleo Diagnostics Limited (ASX, COV) has released its preliminary final report for the year ended 30 June 2025, revealing a net loss of $3.999 million, a slight increase from the previous year's $3.759 million loss. Despite the widening loss, the company remains firmly focused on advancing its mission to develop a simple, accurate blood test for early detection of ovarian cancer, a disease notorious for late diagnosis and poor survival rates.

The company reported no revenue from operations, consistent with its current stage as a research and development entity. Cleo ended the financial year with a robust cash balance of $6.46 million, providing a solid runway to complete its pivotal US clinical trial and advance regulatory submissions.

Clinical and Regulatory Progress

During FY2025, Cleo made notable progress in its FDA 510(k) submission pathway, incorporating feedback from the US Food and Drug Administration to refine its pivotal clinical trial. Recruitment for the 500-patient US trial continues, with expansion into high-volume academic and metropolitan surgical centers such as Beth Israel Deaconess Medical Centre and Dana-Farber Cancer Institute, among others. This strategic site activation aims to ensure a diverse patient cohort and is on track for completion by Q4 calendar year 2025.

Complementing clinical efforts, Cleo successfully completed in-house testing of commercial prototype assay kits, manufactured in partnership with FDA-approved contract manufacturer R&D Systems. The company is now focused on assay optimization, beta testing, and scaling manufacturing to ensure the kits used in clinical trials match those intended for commercial release post-FDA approval.

Strategic Partnerships and Market Preparation

Cleo has expanded its strategic footprint by securing access to two globally significant ovarian cancer biobanks, the UK Collaborative Trial of Ovarian Cancer Screening (UKCTOCS) and the US National Cancer Institute’s Prostate, Lung, Colorectal, and Ovarian Cancer Screening Trial (PLCO). These biobanks provide well-characterized patient samples critical for further validating the test and supporting regulatory and reimbursement efforts.

In parallel, the company has broadened its US industry partnerships to facilitate rapid adoption upon approval, focusing on reimbursement strategies, physician education, and distribution channels. Key management appointments in operations, quality and regulatory affairs, and corporate development have been made to support these commercial readiness activities.

Risks and Outlook

Cleo’s business model remains dependent on successful regulatory approval, intellectual property protection, and securing sufficient funding to complete development and commercialisation. The company acknowledges inherent risks in the clinical development process, regulatory pathways, and potential product liability. However, management’s extensive experience in diagnostics and oncology, combined with a clear strategic roadmap, positions Cleo well as it approaches critical milestones.

Looking ahead, FY2026 is set to be pivotal as Cleo aims to complete its US clinical trial, submit its FDA application, and prepare for first commercial sales. The company’s progress underscores a commitment to transforming ovarian cancer detection and improving outcomes for women worldwide.