ASX Watch: Next Science Provides Exciting Solution to Chronic Infections

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Just when you might have thought you’d heard it all…an Aussie-based medical technology company says it has a breakthrough solution to chronic infections.

That’s right. Next Science Limited [ASX:NXS] may just have the world’s solution to antibiotic-resistant bacteria. It’s a big problem…implying a very profitable outcome for those who can help solve it.

In case you hadn’t heard of Next Science Limited, here’s a quick rundown…

Who is Next Science Limited?

NXS is an Australia-based medical technology company established in 2012. It listed on the ASX on 18 April 2019.

Since then, it’s been busy developing and commercialising what it calls its Xbio technology.

The Xbio solution is used to provide a non-toxic treatment for what’s known as biofilm-based infections.

Yep, I hadn’t heard of that term either.

Simply, a biofilm is a complex community of ‘problem causing’ microorganisms, which are enclosed in a protective coating.

What makes biofilm so dangerous is that it can attach itself to nearly any surface. This slime-like substance has caused an ongoing problem for patients and medical providers worldwide.

In fact, according to the US National Institute of Health, biofilm accounts for 80% of microbial infections in the human body.

Even worse, these bacteria can be 1,000 times more resistant to antibiotics!

Hopefully, that helps you understand the problem Next Science is trying to solve.

Let’s look at the solution. Because this is where investors of NXS could make a ton of cash…

Understanding Xbio technology

Next Science says its Xbio technology is a proprietary-based solution, which can destroy biofilm bacteria and plankton bacteria.

Not only that, when the Xbio technology is used, it creates a pathway for antibiotics along with the body’s natural immune defence system.

That’s what we can call killing two birds with one stone!

Currently, NXS offers three products that all contain the Xbio technology.

The products Next Science offers include SurgX, Bactisure, and BlastX wound gel.

Now get this…

Right now, there is no evidence to suggest that Next Science’s Xbio technology can form a bacterial resistance and compound the problem the company is trying to solve.

Meaning, this technology should continue to flourish and offer solutions to thousands of patients worldwide.

NXS goes public…with a bang!

Next Science Limited was a highly anticipated IPO and raised $35 million by issuing 35 million shares at $1 each.

The offer closed shortly after going public due to oversubscription. This was thanks to an extremely high response rate from institutions, plus sophisticated and retail investors.

On the first day of trading, shares rose swiftly, reaching a top of $1.48, before closing 35% higher in a single trading session.

And seeing the impact this product is having on patients, it’s no wonder the share price has gone from strength to strength.

According to Next Science Chairman George Savvides, infection is ‘the unfinished business of healthcare’. 

CEO Judith Mitchell said the company’s current products include a wash for knee and hip infections to help them heal.

People who didn’t think they were ever going to heal – without an amputation – are now healing,’ she said.

Now that NXS is a publicly traded company, I would suggest that you place this one on your watch list.

Right now, the shares are trading north of $3.30. That’s around 150% higher in just two months.

The company certainly has a strong management team. George Savvides was previously at the helm of Sigma Healthcare and Medibank Private.

In short, Sigma is the largest pharmacy wholesaler in Australia and has the largest footprint of branded pharmacies. So yes, this is a big deal…

And Judith Mitchell has held executive positions with notable health firms including Cochlear and GE.

But there is one caveat to all of this.

Next Science Limited is still not yet profitable. And a large portion of its IPO proceeds will be spent on research, regulatory and employee costs. That means the company is running down its cash reserves. That’s not uncommon on the share market, but something to be aware of.

The company is generating revenue ($2.4 million in revenue for the 2018 reporting season) and holds $30 million in cash and assets. That should provide a short-term buffer from needing to raise more cash from investors.

The company’s short-term goal is to reduce its sales staff and capitalise on its recent partnership with a global sales team.

The outlook for the stock looks bright. Just because it’s gone up so far doesn’t mean it can’t go higher. There’s huge opportunity in front of the company.

NXS is one for your watch list. It’s on mine, anyway.

This article is not a recommendation to buy or sell NXS. It’s an update only. I hope you found it helpful.

Until next time,

Jim Rickards Signature

Jonathan Evans,
Analyst, Profit Watch