Aegros pockets license from TGA and signals fundraising as it aims to disrupt $19 billion plasma market


Private company Aegros is poised to disrupt the global plasma market with its patented process, HaemaFrac.

An innovative Sydney-based biopharmaceutical company is set to seek investors for fresh capital, after promising to disrupt the US$19 billion global plasma market.

Aegros is set to become one of only two companies licensed to manufacture therapeutic plasma in Australia, having obtained a license from the Therapeutics Goods Administration (TGA).

The company will now embark on a bookbuild to fund a shortfall in its convertible note program, with investors now invited to re-enter the issue at $2.30 per share.

The lack of funds is due to the redemption by Aegros of the convertible notes issued in October last year.

Investors will also receive a $2.30 option expiring in March 2023, for each share they requested.

In October, the TGA granted Aegros a license to manufacture hyperimmunes for clinical trials using the company’s unique, patent-protected HaemaFrac process.

With this Good Manufacturing Practices (GMP) license obtained, Aegros is the second largest fractionator in the country alongside giant CSL, which is currently Australia’s only plasma fractionator using decade-old technology.

Through its unique HaemaFrac process, Aegros has succeeded in developing an alternative method to produce hyperimmunes that could disrupt the current therapeutic plasma market dominated by CSL and companies such as Takeda and Grifols.

Aegros is also set to begin trials of its first product called Covimmune, a Covid-19 hyperimmune produced using the HaemaFrac process.

It aims to put Covimmune on Australian shelves as early as the second quarter of next year, with trials and associated stability studies currently progressing rapidly.

To support these initiatives, Aegros has now contacted investors to participate in a private placement of common stock at $2.30 per share with a $2.30 free call option.

Aegros unique HaemaFrac process

Current fractionators use a process derived from the original Cohn process developed by Dr. Edwin J Cohn, first used to treat US servicemen attacked in December 1941 at Pearl Harbor.

Although improvements have been made, the backbone of this process has remained the same over the next 75 years.

Over the past 30 years, Aegros has developed its HaemaFrac process which enables it to fractionate all human plasma products, including albumin and IVIG.

The HaemaFrac separates in a single step using an electrical charge through a membrane, compared to existing multi-step processes. This dramatically increases process efficiency while reducing capital and operating expenses.

Production costs for pharmaceutical companies are usually 10% of the selling price, but in the case of plasma fractionators, production costs are 50%. HaemaFrac produces plasma products more in line with the general pharmaceutical cost structure, providing Aegros with a significant cost advantage.

The granting of a GMP license is a significant milestone, not only for Aegros, but for the therapeutic plasma industry globally, as it is the first regulatory approval for a new capture step. immunoglobulins over the past 90 years.

As noted above, the HaemaFrac is fundamentally disrupting this industry as it reduces manufacturing cost by over 50%, while effectively doubling process yields to over 85%.

It also offers a number of other benefits, including added viral safety, reduced processing time and significantly reduced environmental cost.

It is estimated that CSL manufactures its products from 5,000 liters of blood, while Aegros can use as little as 20 litres. This is important when fractionating small volumes such as convalescent plasma.

According to Aegros, this is a game-changer and could produce products faster at a much cheaper cost, potentially immediately disrupting the $470 million Australian market and the $19 billion global market for therapeutics.

TGA approval of a GMP registration also means that an internationally recognized regulatory body has reviewed the production process, which provides HaemaFrac with regulatory validation potentially allowing the process to be replicated in other countries.

Path to revenue

The revenue potential of Aegros could be enormous, as there is a shortage of therapeutic plasma products around the world.

In Australia, there has currently been a steady decline in our plasma self-sufficiency over the past decade, due to CSL’s inability to increase process yields.

100% of the plasma collected by Lifeblood (Red Cross) in Australia is sent to CSL for processing, under an agreement managed by the National Blood Authority (NBA).

According to the NBA’s annual report, in 2020 CSL billed the NBA $426 million to supply these products, with an additional $44 million provided by Grifols.

As part of its agreement with the NBA, CSL charges an additional $42 million to process plasma supplied free of charge by Lifeblood compared to products supplied using its foreign plasma.

This is only the first cost that HaemaFrac can save the NBA.

As part of its MMI (Modern Manufacturing Initiative) grant application, Aegros received letters of support from the Queensland and NSW governments to build a 1 million liter HaemaFrac facility in Queensland or NSW.

If successful, the $70 million grant request could result in a $45.5 million grant from federal and state governments, including $24.5 million to be funded by Aegros.

Abroad, there is also a shortage of therapeutic plasma products, which is particularly prevalent outside of first-world markets.

The TGA approval will allow Aegros to supply most of these markets, with some already approaching Aegros for toll manufacturing contracts, with the aim of replicating the HaemaFrac in the future.

The company has made progress in the Middle East, where a $65 million joint venture to build a plasma fractionation plant is well underway, with the goal of providing therapeutic human plasma throughout the region.

Overall, Aegros intends to establish a series of HaemaFrac manufacturing points from which it can supply neighboring countries.

Aegros also expects strong sales of its hyperimmune COVID-19 product, Covimmune, in the near term.

As we have seen, viruses like the coronavirus mutate and it takes time for new vaccines to be produced and adapted.

Aegros hyperimmunes meanwhile can be created in as little as 4 days using just 10 liters of infected blood, and could be the answer for the 10% of the world’s population who cannot take vaccines.

Aegros is currently undertaking a two-arm clinical trial of its hyperimmune Covimmune for Covid-19, which it expects to complete in the first quarter of 2022.

LifeBlood provided Convalescent Plasma for the first arm of this trial which was completed in September of this year.

There are several revenue streams for Aegros, including sales of the Covimmune product and franchise of its technology to overseas customers.

These revenues could be significant as Aegros’ technology is rapidly disrupting markets around the world.

Further information on Aegros’ fundraising can be found here https://ssinsight.com.au/project/aegros/

This article was developed in conjunction with Aegros, a Stockhead advertiser at the time of publication.

This article does not constitute advice on financial products. You should consider obtaining independent advice before making any financial decisions.

All materials linked to or referred to in this article have not been selected, edited or otherwise controlled by Stockhead. Stockhead has not provided, endorsed, or otherwise assumed responsibility for the financial product advice contained in the materials linked to or referred to in this article.

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