Consolidation and review for Avastra

With the suspension of its Australian BioWeld Tube clinical trial and the postponement of European clinical trails, the June quarter was one of consolidation and review for Sydney biomaterials company Avastra (ASX:AVS).

The company's direction regarding its BioWeld Tube technology -- which uses a protein solder which is activated by laser light to join arteries and veins -- will be decided following the recommendations of the expert panel scheduled for September.

Trials were halted following unexpected results in its long-term animal study, where some of the rats in the trial retained their mobility, despite having no blood flow from the abdominal aorta into the hindquarters.

"While we've had a technical problem, that doesn't mean we won't solve that problem," said Avastra's managing director Paul Ralph. "And we are making progress in our other areas."

Avastra is investigating potential acquisitions in the medical devices area to broaden and lower its technology risk profile.

"We've always had that strategy to reduce risk, that's why we took the Benz Stent on board as well," said Ralph.

Avastra has continued its research into the BioWeld ETS device (for sutureless end-to-side cardiovascular anastomotic procedures), the Benz Stent for deep colorectal procedures and the BioWeld DDS device for drug delivery.

"I think that before the end of September, we will have some news apart from the expert panel that will give the market a better feel for what progress we're making," said Ralph.

Avastra has cut its operating costs in light of the clinical trial suspension and while additional targeted reductions are unlikely, operating costs may reduce further due to the flow on effects of the initial cuts.

At the end of June, Avastra had cash of $5.44 million. Based on the previous 12 months, that's about four years funding at the company's current net average monthly burn rate.

For the recent quarter, Avastra incurred a net decrease in cash of $563,000, bringing the company's total spend to $1,711,000 for the 12 months to June 30.