Costing the United States an estimated $20bn every year, the fight against so-called ‘superbugs’ has the potential to spiral into a global pandemic, potentially causing up to 10 million deaths by 2050.
Edison client OpGen has developed rapid testing solutions which address this likely antimicrobial resistance (AMR) pandemic. In the last quarter the company has made notable progress in expanding its portfolio offerings and market reach.
With the anticipated return in demand for patient visits (COVID-19 pandemic), management will continue to focus on commercial advances. AMR sits alongside COVID-19 in the World Health Organization’s top 10 global health threats to health, which increases the urgency of seeking a viable solution.
Given the background – and recent positive news flow – here are seven things every investor needs to know about OpGen. For a deeper dive, please read Edison’s latest research note.
#1 Slow testing spells potential hidden danger
Hospital tests for infections are usually still based on dated and slow culture-based methods, often taking days. To save the patient while waiting for results, doctors often administer broad-spectrum antibiotics, i.e. without knowing first what the bug is. The excessive use of antibiotics depletes options and increases resistant microbes, which could put more lives at risk in the future.
#2 Rapid testing set to remain relevant for decades
There is no instant solution to overcome resistant bacteria, viruses, fungi and parasites. Many new drugs are needed. Without sufficient profit or policy intervention, these treatments – especially antibiotics – may be in short supply, making rapid diagnostics one viable and pragmatic way to reduce AMR spread.
#3 OpGen solutions have potential to increase the lifespan of antibiotics
OpGen was founded with a mission to break the AMR cycle. It has developed the next generation of infectious diagnostic solutions, built on genomics and bioinformatics to provide results in a few hours and identify microbes precisely via their DNA. These tests inform doctors of the more effective drug options. By doing so, the rate of mutation could decrease and the lifespan of effective drugs may potentially increase.
#4 OpGen’s impact could be felt globally
The business has also developed artificial intelligence that can assist in establishing predictive models in efforts to track potential outbreaks. Together with rapid tests, the use of less optimal antibiotics would likely decrease and could help slow the rise of AMR globally.
#5 Commercial acceleration has begun
The additional FDA clinical trial read-out expected in Q422 is anticipated to pave the way for regulatory clearance – plus international sales established and product sales growing – management has an opportunity to drive the company’s top line.
#6 Several notable wins are providing further momentum
The signing of the first two contracts for the Acuitas AMR Gene Panel product, with two large hospitals, is anticipated to provide a tailwind and establish ongoing revenue streams. Active dialogues with multiple potential partners have also led to new distribution agreements for the flagship Unyvero systems in the Middle East, while the key partnership with Menarini has been expanded.
#7 R&D collaboration for Unyvero platform
In September 2022, OpGen announced an R&D collaboration with FIND (a global non-profit alliance for diagnostics) and the German KfW bank for the company’s Unyvero A30 RQ platform, which targets pathogen identification and antimicrobial resistance (AMR) testing. FIND will invest €700k in the study with the option to extend, including a potential commercialisation agreement in low- and middle-income countries. Edison views the collaboration as a key development for the company, indicating global recognition and highlighting the potential utility of OpGen’s Unyvero systems in AMR and infectious diseases.
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