Ondine Biomedical CTO: LANTERN results 'change the entire nature of the company'

We've shown a substantial reduction in surgical site infections. Uh the analysis showed uh just over 40% lower risk of 30-day infection rates.

Hello, you're watching Proactive. I'm joined by Ondine Biomedical President and CTO, Nicholas Lobel. Nicholas, very good to speak with you again. For investors new to Ondine, what does the company's photodisinfection technology do and what problem are you trying to solve?

Great, and thanks for the opportunity, Steve. We much appreciate it. Photodisinfection is a new old technique. It's old because light and antimicrobials have been known for a very long time. We're one of the first companies to actually put it together into a commercially viable system. Um so what we do is we apply a blue stain to any area of the body that needs disinfection, that should be disinfected. That stain adheres specifically

to bacteria, fungi and viruses, IE non-human cells. It doesn't adhere to you, to your human cells. Uh you then illuminate it with a bright red light and that light isn't hot, it doesn't cause any discomfort, but it activates the photosensitizer powerfully causing a free radical reaction which kills the microbes. and it does so in seconds to minutes without harming human tissue, very broad spectrum, not like an antibiotic.

It doesn't cause resistance. So, you can imagine the perfect antimicrobial, rapid, uh delineated extension of uh use. It doesn't continue forever, killing good bugs, bad bugs, etc. It stops when the light's turned off, and extremely potent. It's a it's a real breakthrough in medicine and we want to put it as many places as we can through hospitals and clinics.

In fact, you've just had a big breakthrough, Nicholas. You've released top-line results from your phase 3 Lantern trial, which showed showed a 40.5% reduction in surgical site infections. How significant is that result for Ondine and for hospitals?

Yeah, great question. I mean it changes the entire nature of the company. We've moved from asking whether Steriwave can work at scale to doing a 5188 patient pivotal phase three study uh across 18 major US and Canadian hospitals and we've shown a substantial reduction in surgical site infections. Uh the analysis showed uh just over 40% lower risk of 30-day infection rates at a 98.2 probability of benefits. So

you ally that with a favorable treatment, safety profile, no device-related serious adverse events, and you've got a very powerful technology underway. And and what matters is this wasn't just a small proof of concept study, an underpowered uh study. This was conducted in real hospitals, in real surgical workflows, including 14 HCA healthcare hospitals in the United States and four in Canada. Uh in Canada, Steriwave is already commercially approved

uh and commercially used as well as other markets. In the US, it's still investigational, subject to FDA approval. But for us, the phase three is potentially the bridge between the international commercial business we have today and then of course access to the world's largest healthcare market. Um our next step is to take the full data package forward with the FDA. We already have fast track and qualified infectious disease product designations, but

of course, the timing and the outcome of FDA review are ultimately for FDA to determine.

Nicholas Peel Hunt sees a major revenue uplift from US sales. They were out with a note. Tell us what that ramp up could look like.

Um excuse me, the important thing is that if we achieve FDA approval, uh we don't expect to be starting from a blank sheet of paper. 14 HCA hospitals participated in the phase three. So you have major US hospitals, some with with hundreds of beds uh that already have direct operational experience with the product. How it fits into the surgical pathway, how patients are treated, what implementation looks like. Peel Hunt, um which is their independent estimate, not our guidance necessarily,

have modeled a substantial increase in revenues between now 26 and 28 based on assumption of FDA approval by the end of next year, by the end of 27, and then US commercial revenues beginning shortly thereafter. And I mean, they just illustrate why access to the world's largest healthcare market is transformational for a company of our current size or any company. And um while we wait for that approval, we don't simply stop. Steriwave is as I said, already commercial outside the US, including Canada,

the UK, parts of Europe, now starting into the Middle East and we're continuing to expand there. So, um we're looking beyond surgery as well. Intensive care is a particularly interesting indication for us because those are extremely vulnerable patients. Um infection prevention is critical. They are at a 10x higher risk of infection and in fact, death, mortality. So our objective with those programs is straightforward. demonstrate clinical economic value,

move from pilots into routine use and then turn the clinical adoption into recurring revenue.

Nicholas, beyond surgical infections, how big could the wider photo disinfection opportunity become?

Uh thank you for that question. I'd really like investors to understand that Ondine isn't just a one indication company. We've developed this platform that can target bacteria viruses and fungi. Imagine diseases throughout the spectrum uh like that. and we don't rely on antibiotics. So since we have pioneered surgical infection prevention using this technique, that's our first major application, but it's not our only market. There are more than 300 million surgical procedures worldwide, but the underlying

problem is much broader. You know, as hospitals go through their patient journey throughout the healthcare system, they're vulnerable to infection in ICU, they're on ventilators, they can't breathe properly, they can't move mucus properly. They're undergoing cancer treatment, they're in dialysis. So, you know, those people who are suffering from chronic infections and those people who are under acute care uh are at the greatest risk and those are the areas where we will pursue um

the most credible routes to commercial adoption. and the business model is attractive because it's a razor razorblade model. It combines the reusable light device, a small laser device that's placed by the patient's bedside, uh with every patient specific consumable. So the device itself is purchased or rented or placed under a treatment commitment and then every additional patient generates these consumable revenues. So there's really two dimensions to growth for us. More hospitals adopting the technology,

more patients being treated within each hospital. And that's really um the summary opportunity we see for. Not just one product for one surgical indication, but a clinically validated antimicrobial platform, expanding installed base, recurring revenue model addressing this incredibly difficult and persistent problem which is infection in an era that we're all aware is increasing antimicrobial resistance primarily due to antibiotic misuse.

Nicholas, it's a fantastic story. I hope you continue to keep us updated with your progress.

Thank you so much, Steve. I much appreciate the opportunity.

You're very welcome. Nicholas Loebel who is president and CTO at Ondine Biomedical.