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TrivarX Ltd

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- TrivarX Ltd
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TrivarX Ltd (ASX:TRI)


Opened: 02-May-2024

Shares Held at Open: 18,820,000

What does TRI do?

Trivarx (ASX:TRI) is an AI-driven mental health technology company seeking to commercialise objective measures to aid in the early detection and screening of mental health conditions, such as depression.

What is the macro theme?

We expect technology to play an increasingly important role in mental health care - FDA approvals for medtech algorithms have ramped up dramatically in the last few years. But there are few algorithms for the mental health space. Billions of dollars are being invested in mental health technology companies and startups, and AI is one of the hottest investment thematics right now.

Why did we invest in TRI?

1. Screening for mental health issues from sleep data

novel solution to a serious problem. Current methods to screen for mental health are subjective and inaccurate, resulting in patients not receiving the right treatment. TRI is using AI to analyse sleep data to provide objective, accurate screening for mental health issues.

2. Genuine AI (Artificial Intelligence) exposure

TRI didn’t just start working with AI once it became a popular investment thematic in recent months. TRI has a Head of AI, Dr Massimiliano Grassi, who has been doing AI for psychiatry for at least 6 years. TRI’s algorithm has advanced to Phase 2 trials and is getting better as time passes and more data is collected.

3. ~$11M market cap - undervalued and unloved Medtech?

like our successful Investment in Oneview, our view is that TRI is undervalued at ~$11M considering the 9 years of investment into its tech & with a Phase 2 trial being run. We think this is a great entry after years of hard work with the right team to take TRI forward now in place.

4. Imminent Phase 2 clinical trial results

400 patients sleep data is being screened for depression using TRI. IF the trial result is positive, it could open the door to US FDA regulatory approvals and potentially even training the AI algorithm to screen for other types of mental health issues too. The final results are expected in the next couple of months. We think they will be a catalyst for TRI’s share price.

5. Path to FDA approval

TRI has engaged with the FDA and the De Novo pathway was defined by the regulator, a type of FDA approval which is generally longer and more rigorous but reserved for genuinely new medical devices, which we think TRI’s algorithm is.

6. USA based story and market

TRI has a US-based tech team and is going for the lucrative US healthcare market - which is the huge, clearly trodden pathway for big exits in biotech/medtech.

7. Near term revenue opportunities (Stager) - US$15BN market

Commercial roll-out of TRI’s sleep staging software for sleep clinics - commercialisation is underway with licensing agreements and partnerships anticipated 2024. TRI’s novel products are aimed at sleep research organisations in the US, targeting the US$15 billion sleep medicine market.

8. Proven new management team with key backers

recently appointed board and management team with significant success in US and global healthcare markets, including founding directors/financiers of Race Oncology ($600m+ market cap 2021) and ResApp Health, which Pfizer ended up taking over for ~$180M in 2022.

9. Long term technical team retained (AI experts and human brain experts)

Neurosurgeon Dr Defillo and AI specialist Dr Grassi are the brains behind TRI’s tech - they’ve been involved together since 2019 and both bring a special skill set that we think will drive TRI’s success.

10. Major shareholder is Fidelity Investments

one of the largest fund managers in the U.S, is the #1 shareholder in TRI with a ~10% holding in the company.

11. Potential to screen for other psychiatric disorders

if it turns out that sleep data CAN successfully be analysed by its AI to screen for depression, it is possible that the AI can be trained to screen for OTHER mental health issues too.

12. Potential to integrate TRI’s tech into wearables

TRI’s tech may potentially be integrated into wearables like a Fitbit, Apple Watch or Oura Ring that all track simplified sleep data. That’s a big commercial opportunity in our eyes.

What do we expect TRI to deliver?

Objective #1: Complete Phase 2 clinical trial, release results

TRI is currently conducting a Phase 2 trial in the US on its algorithm for detecting current Major Depressive Episode (cMDE). Final results are expected in the June quarter (before July 1st 2024).


not done Phase 2 clinical trial results

not done Potential additional clinical validation studies

Objective #2: Regulatory approval - FDA De Novo application

TRI will be engaging with the US health regulator (FDA) to bring its product to market. This involves an De Novo application - which would classify its product as “low-risk” and therefore help speed up the approvals process and get TRI’s product to market quicker.


not done 2nd FDA Pre-Submission Meeting

not done FDA De Novo Application submission

not done Outcome of FDA De Novo Application

Objective #3: Appoint MD/CEO & outline commercialisation strategy

We want TRI to appoint a Managing Director or CEO with the right skills and experience to take TRI’s product into the market. After that we want to see the company sign commercialisation deals. TRI is currently undertaking an executive search for the role.


not done CEO search starts

not done CEO appointed

not done Licensing deal #1 - Stager software

not done Licensing deal #2 - AI depression screening algorithm

What could go wrong?

Regulatory risk

It is possible that health regulators do not approve a new screening product like TRI’s. The regulator could require additional data, or reject the application outright. TRI has previously failed with a “Breakthrough” FDA designation and despite taking a more streamlined approach to regulatory approval - this approval is not guaranteed. An adverse outcome from the regulator could hurt the TRI share price.

Competition risk

AI is accelerating at a significant rate - new market entrants could make TRI’s product for depression screening redundant.

Clinical trial risk

Clinical trial outcomes are never certain - TRI might not be able to generate results good enough for the regulator to approve the product. Clinical trials, even low cost ones, require capital in order to be conducted. A clinical validation study, which TRI may also have to complete could cost additional money.

Funding/dilution risk

Small caps often need to raise cash to fund their growth. TRI is not generating any revenue and may need to raise capital, potentially at a discount. Capital raises may dilute existing holders.

Market risk

Broader market sentiment can get worse and speculative stocks as a whole trade lower, taking TRI’s share price with it. Alternatively, there could be further sector specific pain ahead. For example, the biotech sector sells down.

What is our investment plan?

Our Investment Plan for TRI is to hold on to a majority of our position to see the company execute on its business strategy over the next two to three years.

If the company’s share price materially re-rates in the medium term due to the results of the Phase 2 clinical trial results, a commercialisation deal, a macro triggering event or any other unknown reason, we may look to sell up to ~20% of our holding. See our general hold policy for more details.

Disclosure: Disclosure: S3 Consortium Pty Ltd (the Company) and Associated Entities own 18,820,000 TRI shares at the time of publishing this article. The Company has been engaged by TRI to share our commentary on the progress of our Investment in TRI over time. 14,000,000 shares are subject to shareholder approval.

Our Investment Summary

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