Clever Culture Systems (CC5: $0.017) has sold an additional two APAS Independence instruments to Novo Nordisk. This brings the total to three systems that Novo Nordisk has purchased.
The APAS instrument is used to assess multiple agar plates for negative bacteria readouts in pharmaceutical manufacturing. Given most samples in these environments are negative, it is the ideal application for the technology.
Sale History
The APAS pharma project commercially started in December 2022 with a $0.4 million investment by Thermo Fisher Scientific, followed by a $1.2 million development contract with AstraZeneca in January 2023.
The first product was delivered to Thermo Fisher in February 2024 with an official commercial launch in March. The first sale after that was to NovaCina in Perth in April. In July two pharma companies (Pfizer and BMS) started evaluation of the product.
This was followed by an order from AstraZeneca for five systems in August 2024 for up to $4.1 million. In October the first system was sold to Bristol Myer-Squibb following a short evaluation of just under three months. And in December another order for four units was placed by AstraZeneca.
In the first quarter of 2025 BMS ordered its second unit. And in July 2025 Novo Nordisk ordered an APAS for evaluation. This was followed by Boehringer Ingelheim in the September quarter. Then CSL became a new customer in June of this year.
The plan over last two years has been to expand the number of major pharma customers using the product. Over that period, the company added six major pharma clients as customers or potential customers that were evaluating the product (Pfizer, BMS, Novo Nordisk, Boehringer Ingelheim ,CSL and one undisclosed).
In August CCS launched the contact plate application (used to detect bacteria on clothing or other portable items), with development work commencing in June the year before. This has assisted with wider and deeper penetration into the pharma market, providing assessment of settle and contact plates, which have different dimensions.
It also doubles the annual software fee to around $100,000 per system, with an upfront cost per instrument of US$350,000. This is not a significant cost impediment for big pharma.
Penetrating Deeper in Existing Customer Base
The company has good visibility with forthcoming sales, given the close (weekly) interaction with its clients as they move from evaluation to final decisions around additional sales orders. CEO Brent Barnes is confident of further orders with existing clients, which will be one of the key objectives for this financial year. The likely companies to place expansion orders are BMS (first system purchased almost two years ago) and Boehringer Ingelheim (first system purchased one year ago), with orders likely from Pfizer as well (evaluating for more than two years).
Last financial year CCS placed 11 systems, with eight into the pharmaceutical sector and three into the original area of focus, pathology. Barnes is optimistic that sales to the pharmaceutical sector will increase this year.
CCS now has eight major pharma customers who have purchased or are evaluating the instrument. The installed base at June 30 was 34 instruments. AstraZeneca has purchased 12 instruments so far and Novo Nordisk is potentially an even larger customer. The existing customer base alone represents a market opportunity for around 100 systems, instrument sales of around $50 million and annual recurring revenue of around $10 million, according to the company.
Financials
For FY2026, CCS recorded cash receipts of $4.9 million (up slightly from $4.7 million in the PCP) and cash outflow of $2.6 million (cash inflow of $1.2 million in the PCP).
To help manage its working capital, the company secured a short-term loan for $1.6 million with $1.68 million due to be repaid by the end of the year. CCS finished with cash of $1.7 million at June 30.
Cash expenditure and receipts will fluctuate each quarter, based on costs for manufacture of instruments, and receipts from customer payments for instruments. Up to $2.6 million in cash receipts is expected to be received in the current quarter. The constant for the company is software licensing fees which has reached $1.3 million a year. This will obviously grow with the installed base of instruments.
Working capital management will be an item to monitor during the expansion phase that the company is approaching over the next 12-24 months and a move towards a cashflow positive position.
Clever Culture Systems is capitalized at $41 million.
Bioshares recommendation: Speculative Hold Class B
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