TB or not TB - that is the question

I was pleased to see how the tuberculosis (TB) trial work was referenced in the Half Yearly report. It was mentioned – but only at the end of the Steve’s introduction – and more as an add-on to the significant progress around the main game of water sanitation, air purification and surface sterilisation.

The initial news of the delay in the TB trial seemed to cause a few ripples. Perhaps a bit of nervousness amongst holders in the mind-set of near term inflection points and quick gains – the kind of mind-set surrounding small cap medical biotechs, Phase 2 trial results and ‘win or lose’ outcomes.

As noted in the Half Yearly, rolling out such significant game changing technology as FRG will take time. And as the Beer & Co November valuation described – while the technology is proven, the risk is in the roll out. Long periods between ‘news’ can seemingly whittle away shareholder interest – resulting in a drift to ‘safer’ waters – or for a quick gain elsewhere.  

In this regard, the TB trial has significant near term potential to maintain focus on and interest in PO3, reinforce the superiority of the FRG technology – and surely offer further commercial opportunities. 

For air purification – deals with OEMs will take time – and rightfully so for both parties (although even a hint of one licence agreement would change everything). Water treatment for pools seems suitable for a quick win – and the PO3 November presentation referenced a ‘first sale’ in Q3/2019. But the risk to SP remains, again, in the roll out - and any delays may well test the confidence of the impatient.

This is where I think the TB trial represents a great short term opportunity. It seems to be pretty much de-risked – with high confidence in the outcome expressed in the Half Yearly. A positive result will be very newsworthy – not just for the company and as a clear demonstration of the superiority of FRG tech – but for broader global health outcomes generally.

Running the trial in India goes to the heart of an area of need. TB is a major issue in India – with an estimated incidence in 2017 of 2.790 million – with 413,000 deaths. High figures like these can make it hard to think about what this means on an individual level. To put it bluntly – it’s an awful way to die.

But apart from the need to eliminate such human suffering – there is also an economic imperative to do so. Investing in the fight against TB is a “no brainer” development target, according to The Economist and the Copenhagen Consensus, given the benefits gained per dollar spent.

Unsurprisingly, TB eradication has attracted the close attention of Indian PM Narendra Modi who, in March 2018, launched a campaign to eradicate TB from India by 2025 - five years ahead of a globally set deadline!

So – we have a company running a trial in India into proven technology they have the exclusive rights to that could help eradicate a devastating and horrendously costly disease that the PM of the country is committed to eradicating – and as fast as possible.

Without the TB trial - I’d still sleep well at night despite my level of exposure to PO3 – particularly as this does not seem to be factored into recent valuations e.g. November Beer & Co.

A (seemingly unlikely) negative trial result would undoubtedly impact the confidence of some – and the SP would be dented - but the main game will remain unchanged.

But how a positive test result might play out will be fascinating to watch – particularly with the calibre of people now on board (see on Jim Heath).

One can only dream…