Memphasys Executive Chairman Alison Coutts on in vitro fertilisation (IVF)

Memphasys is an ASX listed bio separations company focussed on cell separations, most particularly sperm separations for IVF treatments.
We’ve developed a technology, a device called FELIX, which is getting ready for commercial sales this year, and it’s being developed in conjunction with a renowned reproductive biology specialist Professor John Aitken at the University of Newcastle.

We are adding a new director, we have appointed Paul Wright to help us with the scaling of the business. So, we’re at a really interesting point in the development now. Later this year we expect to be selling commercially. We’ve got some big strategic issues to deal with, and this is right where Paul has been. He’s been involved in strategy consulting. He thinks very, very deeply strategically about a lot of things. He’s also got a Masters from Cambridge in Engineering. He understands the technology. He’s run companies, ASX listed, Med-tech companies. He’s worked globally in multinationals, he’s very good on distribution strategy, and we’ve got to answer the questions ourselves about how to best get this device out, how to deal with it from a distribution point of view, certainly in Japan we would need a distributor, but other markets we can go direct. Paul’s had that direct experience, and we’re already talking to him about how best to do this. His knowledge base and experience is invaluable, and we’re absolutely thrilled to have him.

We’re trying to solve the fertility decline, how to deal with it. There’s been a decline in human fertility over the last few decades, that’s quite alarming. We don’t know exactly why, could be to do with people putting off having children, but also seems to be an environmental factor, but it’s an alarming thing, and males also contribute to half the problem which most people don’t realise. We are trying to do something about it…it’s also expensive, it’s a procedure that costs a lot, emotionally draining, and there’s a high degree of failure, so in any one cycle there’s about an 80 per cent failure rate, and 2.2 cycles before you get a success, but there’s no guarantee of success, and some people never actually get a baby.

We’re developing a device called FELIX for male infertility, but it can be used for all couples, including men who have healthy sperm, but it enables the very, very quick and gentle separation of sperm that appear to be the best, and that based on their negative charge and cell surface, indicating good cytoskeleton DNA. Current processes are laborious, laboratory based, they take half an hour, involve centrifuging, and getting media, they can also damage DNA. Our device takes six minutes, it’s automated, and is very, very gentle, very easy for the operator, almost operator independent, and is expected to have a very good outcome, in not only improving efficiency, but also based on what we know, we think it will improve outcomes.

Currently there are over 2 million cycles a year, and it’s probably going to double and more in the next decade. By a cycle I mean when the woman provides the egg, the man provides the sperm and put together eggs are fertilised, embryos are formed and the embryo is implanted, that’s a cycle. So, there are a large number of cycles. In Australia, people pay about 10,000 dollars, maybe 11,000, for a cycle, and that varies depending on where you are in the world. In America it is a lot more expensive, but there’s ample opportunity within that price to charge for our particular processing.

If you consider achieving sales, you need to segment the market. And really there are three segments. The first is what I call the low hanging fruit, where there’s virtually no regulatory barriers to get into these markets. Markets like Canada, Japan, New Zealand, possibly India.

The next lot are the medium, still rather tricky with regulations, its FDA and TGA for the US and Australia and, possibly China, its own particular market with its own regulator, and the hardest is actually Europe, because the regulations are changing.

But with respect to the earlier markets, we’re very well positioned, fact is we’re very positioned around the world with key opinion leaders in all major markets, but the key opinion leaders are very keen to get an improved way of processing sperm. They’re assessing our device as of right now, and when the device is finalised after full testing is finished which we expect in the middle of the year, and they are already very familiar with working with the device, we expect after that, given a few months, to be able to be in a position to start the sales.

Having said that, there are certain markets like Japan, where you need a company, or a person domiciled in the place to be the distributor importer.

Well we’ve only spoken about the human application of the device, but there are animal applications. And in fact, we’ve found it works very well in cows and horses. Thoroughbred horses aren’t allowed to use this by the way, because the racing industry has its own rules. But there is a very large market for other very highly specialised horses and people pay all sorts of amounts.

The issues with these large animals is that they have a very large amount of semen, huge volume. You don’t put in by a pipette, you pour it in….and so we’ve got to work out a new way of dealing with that, and also the amount of sperm per millimetre is very large, so our current filters will get clogged, so we’re working on all this at the moment, we know that we can deal with it, we know that we can get a new prototype, a new device.

We’re actually working on new prototypes right now that will deal with these things, and once we crack this, and we will, be it with cows or horses or what, then it will be able to be used in all sorts of livestock because it’s very easy to go from one to the other, once you’ve cracked that problem of how to scale up.