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Gut health testing and therapeutics group Microba (ASX: MAP) has raised $14.5 million from investors, with more than half of the total from major shareholder Sonic Healthcare (ASX: SHL), as the Brisbane-based company targets break-even from its UK and Australian operations in FY26.
Sonic Healthcare, which controls 19.9 per cent pf Microba, is investing up to $8.3 million via the capital raise which comprises a $12.5 million two-tranche placement and a $2 million fully underwritten share purchase plan.
Microba says the funds will be used to support expanded clinical adoption of its microbiome testing products in Australia and the UK, while also driving sales and marketing activities in those markets.
The capital raise was announced with news that Microba has signed an exclusive commercial laboratory processing agreement with The Doctors Laboratory (TDL), a wholly owned subsidiary of Sonic Healthcare and the largest medical laboratory diagnostics provider in the UK.
The agreement, which comes with a two-year option for TDL to provide the laboratory processing services for Microba in the UK, also enables Microba to scale international growth as a software company in a capital light manner without the need for laboratory set-up and operational overheads.
The share placement and share purchase plan have been priced at 9c per share and there is a 14c unlisted option attached to every two new shares issued. This compares with Microba’s most recent closing price of 11.5c per share.
“With the continued backing of long-term partners like Sonic Healthcare and some of Australia’s most respected institutional investors, we are continuing to advance our mission to combat disease through microbiome health,” say Microba’s chair Pasquale Rombola and deputy chair Ian Frazer in a joint statement.
“In a difficult capital environment, their support underscores our progress, the strength of our technology, the quality of our team, and the scale of the opportunity we are pursuing.
“This funding positions us to achieve regional break-even points in Australia and the United Kingdom, and advance our product roadmap to bring our impactful clinical testing solutions to more patients, faster.”
Microba is targeting revenue of between $15.4 million and $16 million for FY25, with the company revealing it is on track to achieve break-even in Australia and the UK by the end of FY26.
This compares with revenue of $12.09 million in FY24, up 123 per cent. Microba delivered a 147 per cent increase in FY25 first-half revenue to $8.08 million.
The company has a three-year strategic objective to target group breakeven “through continued strong penetration of innovator and early adopter clinicians across four core regions”.
“This strategic objective is based on the assumption that both Australia and the United Kingdom continue to experience strong year-on-year growth, along with initial market entry and momentum in the first state targeted in the United States and initial market entry and momentum in the first country targeted in Europe,” says the company.
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