Microba has secured a $2.025 million placement while cutting costs further, launching GI Navigator and advancing its proposed merger with Genetic Signatures. The funding comes as the company reports strong Australian testing growth but only about one quarter of cash cover before the raise.
- $2.025 million placement at $0.04 a share, with the second tranche conditional on approvals
- Cash and equivalents of $3.87 million after a $3.80 million quarterly operating outflow
- Core testing revenue rose 31% to $2.57 million, led by a 44% increase in Australian Microbiome Explorer tests
- Annualised cash operating costs reduced by more than 20%, with a further $3 million reduction planned
- GI Navigator launched in Australia and the UK as Microba progresses the proposed Genetic Signatures merger
Placement buys time as Microba reshapes its cost base
Microba Life Sciences Limited (ASX:MAP) has raised $2.025 million in firm commitments, but the more revealing number in its latest update is the 1.02 quarters of funding available at 30 September. The company held $3.87 million in cash after a quarterly operating outflow of $3.80 million, before the placement proceeds arrive.
The two-tranche placement will issue 50.625 million shares at $0.04, a 9.1% discount to Microba’s 19 October closing price. The first $1.025 million tranche is expected to settle under existing placement capacity, while the remaining $1 million depends on Microba shareholder approval and Genetic Signatures shareholders approving the proposed merger. If those conditions are not met, the second tranche will not proceed.
The raise is a smaller follow-on to the July capital raise, which secured $5.41 million for diagnostics expansion and product development. Sonic Healthcare, already a substantial shareholder, is supporting both tranches alongside Perennial Partners and Thorney. Its voting power is expected to rise from about 22.6% to 24.5% after the first tranche and about 26% if the second completes, subject to shareholder approval.
Australian diagnostics growth contrasts with UK weakness
Microba’s core business continued to move in the right direction. Core testing revenue reached a record $2.57 million, up 31% on the prior corresponding period and marking the 13th consecutive quarter of growth. Group core test volume rose 32% to 6,527 tests, while Australian Microbiome Explorer sales climbed 44% to 5,589.
Australia supplied the clearest momentum: ordering clinicians increased 15% to 963 and tests per clinician rose 25% to 5.8. New pricing introduced in September lifted list prices by between 13% and 22%. The UK was less encouraging, with Microbiome Explorer tests down 7% year on year to 725 and ordering clinicians down 4%. Microba said larger clinic accounts were taking longer than expected to secure and build ordering volumes, making the UK an immediate priority.
GI Navigator enters the market while revenue remains mixed
GI Navigator launched in Australia and the UK on 7 October, following the October launch plans outlined in Microba’s annual results. The company said more than 150 tests were ordered through early access and more than 400 practitioners joined the waitlist, including more than 150 who had not previously ordered a Microba test.
The new test combines microbiome mapping, patient presentation assessment, gut physiology and pathogen screening from a single at-home stool sample. Microba will report sales from the December quarter, leaving the first commercial evidence of whether early practitioner interest converts into recurring revenue still ahead.
Total revenue fell 4% to $3.44 million after the company exited legacy and distributed products, although core testing and own-brand Invivo revenue grew 25%. A laboratory delay shifted $0.21 million of revenue into October, while deferred Microbiome Explorer revenue rose 54% to $1.99 million. These figures are preliminary and unaudited.
Further cuts and merger changes reset the company
Microba has already reduced annualised cash operating costs by about $5 million, or more than 20% compared with FY26, and now plans a further $3 million reduction. The programme follows slower-than-expected UK revenue growth and targets property, leadership, contractor, marketing, software and overhead costs. The reported savings are unaudited, non-IFRS measures and are not a forecast.
The new cuts extend the $7 million cost programme announced in July as Microba pursued cashflow break-even. Geoff Cockerill is now interim chief executive, while long-serving directors Professor Ian Frazer AC and Professor Gene Tyson are stepping down as the company moves towards a smaller board aligned with the proposed Genetic Signatures transaction. Microba is also beginning an advisory process for a possible sale of its UK-based Invivo Supplements business, although no transaction is assured.
The immediate financial pressure has not disappeared. Microba’s $2.22 million Radium Capital facility, including capitalised interest, is secured against its FY26 research and development tax refund and is due to be repaid from that refund. The company expects the refund in the December quarter, while the cash benefit of its restructuring is still partly obscured by notice-period payments and one-off costs. The next test is whether lower spending and GI Navigator sales can arrive before the conditional funding and merger timetable becomes the company’s constraint.
Bottom Line?
Microba has created more breathing room, not removed the funding risk: execution on cost savings, GI Navigator conversion and the conditional second tranche will determine how durable it is.
Questions in the middle?
- Will GI Navigator’s early-access demand translate into material December-quarter sales?
- Can the further $3 million of annualised savings be delivered without weakening the diagnostics growth now visible in Australia?
- Will shareholders approve the second placement tranche and the proposed Genetic Signatures merger before Microba needs additional funding?