April Report

The Fund rose 8% in April, recovering from a weak March impacted by the Iran conflict. At the time of writing on 18 May, the Fund has risen a further 8%.

Australian-listed AI cardiac CT scan software company Artrya rose 21% after broker Bell Potter initiated coverage with a buy rating. The stock is up a further 20% in the first two weeks of May, with Barrenjoey also initiating coverage and a roadshow by one of the company’s customers and investors, Tanner Health, meeting with investors in Australia. We believe the company’s addressable market has significant room for expansion as easier-to-use AI-based cardiac CT scans are increasingly used in initial emergency room assessments of patients presenting with chest pain.

IperionX rose 22% after delivering quarterly results, releasing a detailed company presentation, and holding a public webcast, which it had not done for several years. This was coupled with management share purchases. The presentation highlighted eight customer segments where the company has 21 different prototypes under development, with expected market entry in 2026, 2027, and 2028.

Pleasingly, the company is also increasing titanium powder production, which is being used to manufacture prototypes. Production is expected to reach an annualised run rate of 200 tonnes by the end of 2026, 1,400 tonnes by the end of 2027, and more than 10,000 tonnes by the end of 2030.

Brazilian Rare Earths rose 17%, buoyed by positive sentiment towards the Brazilian rare earth sector after USA Rare Earth acquired Serra Verde for USD2.8bn. While Serra Verde has the key advantage of already being in production, it is significantly lower grade than Brazilian Rare Earths, with a grade of 0.15% compared to 14% for BRE. Also of note, the war in Iran has boosted fuel prices, which in turn is supporting electric vehicle demand and rare earth prices. Chinese rare earth concentrate prices rose 45% in the March quarter and were up 106% year-on-year, reflecting this strength.

On the negative side, Australian pancreatic cancer drug developer Amplia Therapeutics fell 36% after discontinuing a study combining its drug with the intensive chemotherapy regimen FOLFIRINOX following tolerability issues unrelated to its drug. We believe this is ultimately positive as it preserves cash to study combinations with a new class of drugs called KRAS inhibitors, which are showing significant promise across many cancers, including pancreatic cancer. The leading company in this area is Revolution Medicines, which is valued at USD32bn. Despite strong results, there remains substantial room for improvement, with overall survival in the latest study extending to 13 months, compared to just 7 months with chemotherapy in patients with metastatic disease. Amplia is valued at only USD62m despite 7% of patients achieving complete responses (clearance of cancer), which is an incredible achievement. We used the weakness to add to our holdings.

Clarity Pharmaceuticals fell 9% despite signing a manufacturing agreement with Nucleus RadioPharma to produce up to 600,000 doses annually of Cu64, its prostate cancer diagnostic isotope. This agreement allows Clarity to supply all 50 US states and selected locations in Europe. We expect Clarity to receive FDA approval for its diagnostic product in mid-2027, with a commercial launch in 2028. This and other agreements should allow the company to distribute its product with attractive economics.