Conversation 175: Forget tea leaf reading - the real money is in plate reading.
The march of digitisation and technology convergence in health is advancing at an astounding rate.
It covers everything from sophisticated AI disease detection to the time consuming but important task of plate reading in pathology and that is where LBT innovations [ASX:LBT] comes in.
Agar ‘plates’ are used in pathology laboratories to grow bacteria and other micro organisms.
Having grown a sample of what ails you, a few antibiotic samples are added to see which ones kill off the bacteria most effectively.
The result is what guides your GP to then prescribe the most effective medicine.
But currently, each plate has to be examined manually by an experienced technician and the process means highly skilled people spend a lot of time looking at negative results.
Using an algorithm developed at the University of Adelaide’s Australian Institute of Machine Learning LBT Innovations, headquartered in Adelaide South Australia, has created solution to the problem.
The APAS Independence [Automated Plate Assessment System].
APAS automates culture-plate screening and interpretation and can handle thousands of plates in a day according to LBT.
I have visited a few pathology labs in Australia and the size and scale is mind blowing and the need for constant efficiency improvement is high.
500 million plus pathology tests are carried out in Australia alone every year.
CEO of LBT Innovations Brent Barnes told me their APAS machine is not only extremely accurate but it frees up microbiologists’ time allowing them to focus on more critical cases and enables faster delivery of patient results.
Some compelling business case stats from LBT’s website.
A 6000 plate trial by Johns Hopkins Hospital achieved no false negative results and identified four samples missed by the microbiologists in their manual plate reading.
It is fascinating tech and the business logic sounds great but things move slowly in the pathology world and with good reason. People’s health and lives are at stake.
On paper LBT certainly looks like a company worth following.
LBT’s APAS device is the only such device using artificial intelligence for routine clinical analysis in a pathology laboratories with regulatory clearance in the USA, Europe and Australia.
However at the time of writing LBT had only sold three machines.
But that may be about to change following a distribution deal with one of the oldest and biggest global medical equipment distributors, Beckman Coulter.
Also since publishing this piece LBT announced another sale to a German Lab company. It is only for one machine but the company, Limbach Group has over 30 laboratories, apparently making it the largest network of laboratories in Germany.
Given its regulatory approval in major markets I wanted to find out when pathology labs are likely to start buying the machine in substantial numbers.
Brent Barnes joined me recently for Inside Market Conversation 175.
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SOME RECENT MARKET ANNOUNCEMENTS:
First sale of APAS® Independence made to Germany’s Limbach Group.
TECHNOLOGY AND COMMERCIAL READINESS.
Based on the Technology Readiness Level [TRL] developed by NASA and the Commercial Readiness Index [CRI] that grew out of it LBT Innovations would appear to fit somewhere around 3 on the CRI.
SOME RATINGS FOR LBT INNOVATIONS [ASX:LBT]
RATINGS ACCURATE ON TUESDAY 7Th OCTOBER 2020.
Morningstar Quantitative [algorithmic] Rating *
Valuation Rating: Undervalued Fair Value Estimate: 0.193 Fair Value Percentage Diff: 37.83% Liquidity: High
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