DIY flu kit maker fails to float as huge losses pile up
It's a good thing Dr. Sean Parsons has a committed bunch of ultra-wealthy investors willing to back his Brisbane medical diagnostics firm Ellume.
The award-winning company, which has pioneered the world's first do-it-yourself flu test, failed to float on the ASX last year despite well-flagged plans to do so. Chances of that happening now appear slim, given the upheavals of 2020.
It's also continuing to bleed huge amounts of money as it ramps up the development and commercialisation of products, including a testing kit for tuberculosis. Could a COVID-19 kit be far off?
City Beat can reveal that Ellume suffered a $10.1 million net loss in the last financial year as it battled to get the DIY flu test approved for use in Australia.
That ban, in place for the past 20 years, has forced the company to find overseas markets, primarily the US, and partner with big pharmaceuticals.
Records show Ellume lost $1.74 million and $4.62 million in the two previous financial years.
Indeed, accumulated losses now exceed $25 million since the company was launched 10 years ago by Parsons, an emergency physician who came up with the idea for the DIY kit during the outbreak of swine flu in 2009.
He estimates it could slash flu cases by a third by stopping the spread.
Luckily for Parsons, he secured financial support early on from a small group of affluent investors, including David Dahl of Tradelink Plumbing Supplies and Paul Darrouzet, who made a fortune in mining.
Darrouzet was a key figure in the development of the Foxleigh coal mine in the Bowen Basin which changed hands for about $1 billion in 2008. He's now chairman of Ellume.
His co-founders at Foxleigh, Gordon Smith and philanthropist John Thorsen, also have significant stakes in Ellume. Thorsen revealed late last year that he's the single biggest investor, with a 32 per cent holding.
These gents have apparently kept digging deep, with the most recent annual report showing Ellume raised another $3.74 million last year and has $21 million of cash in the bank.
Taxpayers have fattened up the kitty too, with about $2 million a year refunded by the government for R&D expenses.
Last August the Federal Government also gave a $1 million grant to Ellume to coincide with the opening of a South Brisbane laboratory to manufacture up to 40 million flu and strep throat tests each year.
The tests involve a saliva sample placed on a USB-like device that then clicks into a smartphone for instant diagnosis, with results able to be forwarded to doctors or employers.
Parsons did not respond to a request for comment on Thursday about the stalled IPO and other challenges facing the company.
BEEFED UP BOARD
Brisbane-based oil and gas explorer Central Petroleum has beefed up its board with the appointment of a former top gun at Woodside with nearly 40 years of experience in the industry.
Dr Agu Kantsler will take on the director's duties starting next week.
Kantsler, who has headed Transform Exploration in WA for the past eight years, previously led Woodside's worldwide exploration, business development and geotechnical activities between 1995 and 2009.
He's also on the board of Oil Search and once served as chair of peak industry lobby group the Australian Petroleum Production & Exploration Association.
Kantsler arrives at Central Petroleum just as it seems to have turned a corner.
The company, which claims to be the biggest onshore gas producer in the Northern Territory, reported its first-ever net profit earlier this year, a $3.2 million result for the December half.
Having shaken off a shareholder revolt and board dramas a few years ago, it's now focused on developing the Range Gas Project in the Surat Basin. The goal remains to deliver the first gas in 2022.
Originally published as DIY flu kit maker fails to float as huge losses keep piling up