As diseases continue to adapt, the realm of medical diagnostics must intelligently progress to adeptly combat these changes. Timely interventions and treatments are crucial to improve patient outcomes and survival rates. There are approximately 14 medical diagnostics companies listed on the ASX, striving to pioneer the early detection of new diseases and make significant progress in addressing global health crises.

The ASX will soon welcome Cleo Diagnostics (proposed ASX: COV), a specialist in early diagnosis of ovarian cancer with a simple and accurate blood test, raising up to $12 million at an IPO Issue Price of $0.20 per share. Currently, the five-year survival rate after a diagnosis of ovarian cancer is 50.8% – meaning half of all women that are diagnosed will die within 5 years. However, early testing might better map out treatment plans and ultimately improve chances of survival.

Ovarian cancer is the deadliest among gynaecological cancers impacting women. Current treatment involves expensive, invasive surgery and intensive chemotherapy – each with their own risk of complications. There is no accurate, pre-surgical method to diagnose ovarian cancer, or to accurately differentiate between cancerous versus much more common non-cancerous (benign) disease. However, if ovarian cancer can be accurately detected early, 94% of patients live longer than 5 years after diagnosis.

Compared to other cancers commonly occurring in females such as cervical and breast, where early detection testing is available, survivability rates are now at 74% and 92% respectively. 

Cleo currently has a worldwide exclusive licence to use, sub-licence, develop, modify and commercialise the intellectual property of its ovarian cancer tests, licenced from the Hudson Institute of Medical Research which measures the CXCL10 biomarker, produced early and at high levels by ovarian cancers but not in non-malignant disease. 

The tests aim to distinguish benign from malignant growths in a standard format that will be readily compatible with existing equipment used by diagnostic laboratories worldwide, backed by over 10 years of scientific Research & Development at the Hudson, with two clinical studies conducted with over 500 patients, as well as in excess of $5,000,000 funding from the National Health and Medical Research Council (NHMRC) and Ovarian Cancer Research Foundation (OCRF).

Cleo has developed a three-phased product development strategy that will deliver three related tests for ovarian cancer detection: 

(a) Triage Test – a pre-surgical test to determine the likelihood that a pre-surgical ovarian mass in a patient not yet referred to an oncologist, is malignant. 

(b) Recurrence Test – a post-surgical test to identify whether a cancer is recurring following surgical removal and chemotherapy of cancerous tissue. 

(c) Screening Test – a screening test to identify early-stage ovarian cancer in patients who do not present any symptoms consistent with ovarian cancer. 

Each of the three tests are non-invasive and are performed using a sample of the patient’s blood, specifically designed to be low-cost and fit within existing pathology lab infrastructure.

The Company currently doesn’t generate revenue and will likely continue without revenue until the Triage Test is successfully developed and launched. The Company anticipates that its existing cash and funds from the Public Offer should sustain operations for the two years after Admission.

Cleo will be captained by CEO Dr Richard Allman, the former Chief Scientific Officer of Genetic Technologies (ASX: GTG), who has succeeded in concepting and launching a second generation breast cancer risk assessment test and a similar test for colorectal cancer. His 3.33% of shares will be diluted down to 1.17% from the IPO.

At the Prospectus lodgement date (6 July 2023), the Company holds $367,794 cash at bank. It aims to utilise the raised $12m cash to primarily support its Research and Development (R&D) goals, enhance financial flexibility, and cover working capital and Offer expenses.

Taylor Collison Limited are acting as the Lead Managers for the IPO which is not underwritten.

According to their Prospectus, the IPO Offer is expected to close on 4 August 2023, and should everything go according to plan, Cleo will float on the ASX starting from 11 August 2023 with an indicative market capitalisation of ~$25.7m.