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Leonard is an editor of Before joining the blog, Leonard amassed 36 years of experience as a financial journalist, editor and manager with The Wall Street Journal and Dow Jones News Service, and The Globe and Mail’s Report on Business, where he pioneered the development and... More
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  • Echo’s needle-free technology a game-changer

    Echo Therapeutics’ (OTCBB:ECTE) platform for needle-free drug delivery and a wireless biosensor that continuously monitors diabetics’ blood glucose levels without breaking the skin is giving the company a shot at several blockbuster markets.

    “The scope of the technology is applicable to the delivery of many drugs and monitoring many analytes in the blood stream,” CEO Dr. Patrick Mooney says in an exclusive interview with “Multiple billion-dollar opportunities could be addressed by this technology.”

    Of course, the bottom line is that nobody likes getting stuck with a needle. “When you think about that in the context of our current market valuation of $140 million, we’re a fraction of the value of our nearest competitor, which uses a needle to monitor blood sugar levels continuously, and we think we have a superior technology,” he adds.

    Echo’s two technologies are the Prelude SkinPrep and Symphony transdermal continuous glucose monitor (tCGM), which came out of Dr. Robert Langer’s lab at MIT.

    In a new report last week, Feltl and Co. analyst Ben Haynor said Echo’s technology has “game-changing potential.” He stated, “We believe Echo Therapeutics will revolutionize the continuous glucose monitor and topical anesthetic markets with its non-invasive technology platform.”

    He initiated coverage of Echo with a “strong buy” rating and a 12-month price target of $6.50. The stock closed at $4.15 on Friday.

    In a move that will sharply broaden the pool of potential investors, Echo has applied for a national listing on the NASDAQ or the AMEX and will move to whichever exchange accepts the listing application first.

    Prelude™ SkinPrep Platform Technology

    About the size and shape of an electric nose-hair clipper, the Prelude SkinPrep is a skin permeation device that quickly removes the outer layer of dead skin called the stratum corneum, with no pain or bleeding, stopping precisely before reaching live skin. That puts the device microns away from capillary blood vessels in the epidermis and allows for both painless drug delivery and continuous glucose monitoring with the Symphony biosensor.

    Echo has licensed Prelude to Ferndale Pharma Group for enhanced delivery of its skin-numbing lidocaine cream in North America and Britain. The $15 million deal excludes royalties and manufacturing revenues from the single-use, disposable abrasion tips on the Prelude device. “It’s a razor-razor blade business model,” Dr. Mooney says.

    “We just did a clinical trial that was the basis of our most recent FDA filing, where we permeated the skin with Prelude and then applied lidocaine and achieved numbness in three to five minutes,” he says.  Existing lidocaine creams can take up to an hour to get through the dead skin layer. “So we have a much more attractive product profile.”

    Echo estimates that Prelude and lidocaine could have an annual market potential exceeding $1 billion in cosmetics and pediatrics.

    In pediatrics, Dr. Mooney explains that a nurse could permeate a child’s skin with Prelude and lidocaine, making an inoculation painless in just a few minutes. In the cosmetics and aesthetics markets, patients would be free of painful injections of Botox and collagen fillers, for example, allowing plastic surgeons and dermatologists to get patients in and out of procedures much more quickly.

    Last February, Ferndale received FDA comments on its 510(k) submission that Echo described as minor and consistent with expectations. “They were very benign and generally related to manufacturing,” Dr. Mooney says, adding that an amended filing will be made mid-year, with possible regulatory clearance as early as the third quarter.

    Symphony tCGM System

    While Prelude SkinPrep represents a separate business for Echo, the needle-free Symphony tCGM depends on the Prelude device to prepare the skin for the non-invasive biosensor. The system also includes a wireless monitor or a portable handheld device.

    Dr. Mooney explains that after skin permeation with Prelude SkinPrep, the biosensor’s surface detects glucose as it diffuses out of the capillaries and comes in contact with the biosensor. The biosensor also contains an enzyme that reacts to glucose and relays those readings as an electric signal. The impulse passes wirelessly to a handheld device, which records the information and monitors the readings. It also can transmit readings to a cell phone, emitting an automatic alert should there be a critical rise or fall in the level of a blood-sugar reading.

    All existing FDA-approved continuous glucose monitoring systems use sensor wires inserted into the patient’s skin, increasing the risks of infection, inflammation or bleeding at the insertion site.

    In a report last month, LifeTech Capital analyst Stephen Dunn said the Symphony system has the potential to change the “current standard of care paradigm” and “improve patient compliance to frequent glucose testing and achieve better overall glucose control.”

    Symphony™ tCGM Glucose Monitoring System

    Echo estimates the addressable market for continuous glucose monitoring in the hospital critical care setting at more than $1 billion a year, with the global glucose monitoring market at more than $12 billion annually.

    Last week, Echo received the key components of its next generation Symphony tCGM design that it will test in a final series of clinical trials, replacing the prototype used in earlier clinical testing. The next generation design incorporates numerous technological advances required to meet market expectations for system accuracy, manufacturability and product cost.

    Dr. Mooney says Echo plans to complete an additional critical care pilot study this summer “to make sure we have a commercially ready system.” It also plans to start its pivotal study at the beginning of 2012 and hopes to obtain regulatory approval by the end of the year.

    As in earlier testing, the pivotal study will draw blood from critically ill patients at four hospitals and compare their blood sugar levels against Symphony readings. The study, with an estimated 200 patients, should take about three months to complete.

    Echo has already completed six clinical trials with its biosensor, generating about 3,200 glucose monitoring data points from 70 patients. In those studies, Symphony’s performance was consistent and effective at monitoring blood glucose. The device had error rates between 7.5% and 16%, which were well below the FDA guidelines for error rates of 20% to 25% in diabetic glucometers.

    Citing regulatory filings of competing continuous glucose monitors, Dr. Mooney points out that the Medtronic Guardian device had an error rate of 19.7% while the DexCom (NASDAQ:DXCM) Seven was 15.7%. Dexcom is the only pure play in continuous glucose monitoring.

    “Not only are our error rates much lower than [what] historically the FDA has used as a threshold for approval, but they are also consistent from study to study,” says Dr. Mooney, a former physician, senior biotech analyst at Thomas Weisel Partners, and CMO and CEO of Aphton (NASDAQ:APHT).

    “That tells me, as a scientist and physician, that our data are reproducible, which is equally as important as the accuracy performance. We can consistently reproduce good results with our device.”

    Continuous BG Monitoring System Comparison

    Besides its glucose monitor, Echo is working on a biosensor to detect lactate levels in blood. “It’s an early development program. However, we initiated it, because we want to establish that this is a platform technology that allows us to do many things,” Dr. Mooney says. “Once you permeate the skin, we can make many different types of biosensors, and we should be able to deliver many different types of drugs.”

    A lactate biosensor could represent a big market opportunity with top-tier professional athletes, who are interested managing their lactate levels to achieve optimum muscle performance, and for critical care patients. Dr. Mooney says the technology also could be applied, among other things, to measure blood alcohol levels, thyroxine levels for thyroid hormone and coumadin levels for patients who take blood thinners.

    Echo’s needle-free technology received an unexpected shot in the arm last summer when DexCom received a warning letter from the FDA about the risks of sensor wire fractures underneath patients’ skin, especially in pediatric and adolescent patients. “We believe this should give Echo’s transdermal biosensor a significant advantage in the marketplace,” said LifeTech’s Mr. Dunn.

    Another differentiating advantage Dr. Mooney cites is Symphony’s chemical reaction strip, which adheres to the skin and converts glucose into a numerical reading. The strips are replaced every one to two days, compared with competing biosensors, which can be worn for up to seven days.

    “They make their biosensors last longer, because they want patients to use needles less frequently,” he figures. “We don’t use needles. And another problem with wearing a biosensor for so long is that the adhesive irritates the skin.”

    In 2009, Echo teamed up with Handok Pharmaceuticals to develop and distribute the Symphony system in South Korea. Handok is the largest diabetes care-focused company in South Korea and a member of the Sanofi-Aventis group. “While the deal validated our technology, it also represented a possible strategic path into Sanofi,” Dr. Mooney says. “And we still have the rest of the world open for a partnership with a bigger company.”

    There are four multinationals that dominate the glucose monitoring sector—J&J, Roche, Abbott and Bayer, while two newcomers—Novartis and Sanofi-Aventis—have moved aggressively into the space in the past few years. “They all know us, and they are all interested to varying degrees,” he points out.

    “This is a big year for us.  If we produce consistent data with our next pilot study and get the pivotal study going, I’m probably not running this company in three years. Echo could be part of a much bigger company.”

    Continuous glucose monitoring is not in question, he says, adding that the medical literature is clear that pricking your finger a couple times a day isn’t good enough to control your diabetes.

    “So the big players are moving towards continuous glucose monitoring. But all of our competitors use needles; we don’t. So there’s traction in the space, with a lot of interest in Echo. If you can monitor glucose continuously without a needle, you have the potential for a disruptive technology, and companies like that generally don’t remain independent.” 

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
    May 31 10:16 AM | Link | Comment!
  • MacuCLEAR seeking financing for pivotal dry AMD trial


    CEO Philip Ralston, Jr.

    Closely held MacuCLEAR, with a successful proof-of-concept trial under its belt, is beating the bushes to raise $10 million to conduct the first of two safety and efficacy studies of its eye drop formulation to treat and prevent progression of the dry form of age-related macular degeneration (NASDAQ:AMD), the leading cause of blindness in people over the age of 50.

    “All of our preclinical and human work to date says that we can restore blood flow at the back of the eye, and, with all the literature out there that says a reduction in blood flow is coincidental with AMD, we think there is a reasonable justification for getting funding to do an efficacy trial,” CEO Philip Ralston, Jr. says in an exclusive interview with

    MacuCLEAR is addressing dry AMD like any other vascular disease – unlike other companies that are focused on various metabolic pathways. Since there are so many of these metabolic pathways, no one drug has demonstrated that it can stop the accumulation of all of them.

    “All competitive efforts taking this approach to solve the dry AMD problem have failed to go beyond Phase 2 trials because of a failure to meet primary study endpoints, so our vascular model makes the most sense,” Mr. Ralston says. “We’re different from everybody else.”

    The active ingredient in MacuCLEAR’s MC-1101 eye drop was previously approved by the FDA as an oral antihypertensive drug, and its safety and toxicity profile is well known. In a Phase 1b/proof-of-concept trial, the drug was safe and well tolerated. Key findings of the study, which used laser Doppler technology, were the successful migration of the drug to the back of the eye at the macular area and improved choroidal blood flow circulation following topical application.


    MacuCLEAR is collaborating with Mystic Pharmaceuticals in its human studies. Mystic has a novel ophthalmic drug delivery device called the VersiDoser, which fits over the eye and holds the eyelid open. It delivers MC-1101 as a preservative-free metered mist to enhance absorption of the drug to the back of the eye. The spray plume also avoids “flooding” the eye and a “blinking” response that can wipe away much of a drug delivered from standard dropper bottles.

    Patients were able to self-administer MC-1101 safely and effectively during the trial with the VersiDoser, Mr. Ralston adds. “And an overwhelming majority of patients expressed a strong positive preference for using the VersiDoser over traditional eye drops.”

    In its early stages, AMD will cause patients to have a noticeable decrease in their ability to see sharply or use focused vision – the type of vision required for reading, watching television or driving. AMD affects one in three people as they age, and there are nearly 5,500 new diagnoses each day worldwide. There are no approved therapies for dry AMD. The disease affects some 15 million people in the U.S., who are forced to wait until their dry AMD progresses to wet AMD and near blindness before a few treatment options become available with FDA-approved drugs, such as Lucentis, Macugen and Visudyne, which is used with photodynamic therapy.

    Mr. Ralston figures that a treatment for dry AMD has a conservative market potential well in excess of $5 billion a year, because 90% of the AMD patient population worldwide have the dry form of AMD and the incidence of the disease is expected to double by 2050. “Not everyone in the world who has this disease will be treated, but it’s clearly a huge market.” The current market for treating wet AMD, which afflicts 10% of AMD patients, is $3 billion.

    MacuCLEAR Treats Dry Age-Related Macular Degeneration (AMD)

    The FDA has given MC-1011 Fast Track status, and MacuCLEAR will be using the FDA’s 505(b)(2) regulatory process, which is a relatively faster route with fewer studies needed and lower risk since the active ingredient in MC-1011 has already been proven to be safe. As a result, the company is planning to skip a small Phase 2 efficacy study and move directly into the first pivotal Phase 3 efficacy and safety study.

    “One of the world’s major pharmaceutical companies has been looking over our shoulder and has told us that it would be easier to do a $1 billion partnership when we have efficacy data established than to give us $10 million to test for the efficacy that would qualify for a partnership deal,” Mr. Ralston says. He points to billions of dollars of brand name drugs coming off patent and Big Pharma’s push away from partnering on preclinical compounds, preferring to pay big bucks for more established compounds where the clinical risk has been somewhat reduced.

    While MacuCLEAR tries to raise $10 million for its first efficacy trial, it is working with Ora Inc., a leading ophthalmic clinical research firm, to finalize the clinical protocol for a Special Protocol Assessment submission to the FDA. “Hopefully, we’ll have some feedback from the FDA in the summer on the SPA, and by then, we’ll have some traction on raising the money and begin recruiting patients in the fall,” he adds.

    MacuCLEAR is planning to enroll a large number of patients to power properly its proposed trial. In order to keep costs down, it will use patients who have been diagnosed with dry AMD and are under the care of a physician. The likely endpoint will be time to conversion from dry AMD to wet AMD.

    “If the untreated arm statistically advances more than the treated arm, we would have a grand slam home run,” Mr. Ralston predicts. “And we think that, at that point, we would attract a strategic partner to take us through another pivotal trial, regulatory approval and marketing.”

    Mr. Ralston claims that MC-1011 can prevent progression of dry AMD to wet AMD by avoiding rupture of the Bruch’s Membrane, a blood barrier at the back of the eye, which separates retinal tissue from the blood flow that feeds those tissues.

    MacuCLEAR’s Technology Objective

    “This is fundamental to the vascular model,” he says. As cells in the retina die over time, metabolic waste products collect at the Bruch’s Membrane, which acts like an air filter. If there isn’t an adequate blood flow at the back of the eye to remove those wastes, the membrane gets plugged, and, as it thickens, cracks develop, which allow small blood vessels to get through the membrane into the retina. These blood vessels break down and bleed in the retinal tissue, causing wet AMD and blindness.

    Mr. Ralston states, “We contend that by increasing the blood flow below the Bruch’s Membrane, the membrane will not crack, the small blood vessels won’t get through into the retina, and you prevent progression from dry AMD to wet AMD.”

    Apr 07 5:48 PM | Link | Comment!
  • OTC quotation leaves many dazed and confused

    We’ve noticed a growing buzz on the Street about a sudden lack of quotation activity on the OTCBB, with a lot of company quotations moving to the OTCQB.  Developed by the OTC Markets Group, OTCQB is a competing inter-market quotation system with OTCBB.  In the past week, it seems that certain market makers have stopped issuing quotes on the OTCBB and moved exclusively to the OTCQB.  Adding to the confusion, the securities of some companies are still quoted on both systems.

    While this might be a welcome development over the long-term, a lot of feathers have been ruffled through the process.  Indeed, certain third-party stock data providers are still in the process of updating their platforms to correctly display the trading activity of companies that have transitioned to the OTCQB.   Shareholders, relying on these data providers, are questioning whether their stocks have been halted, or worse, pushed to the Pink Sheets.  This has led some companies, like Redpoint Bio (OTCQB:RPBC) and China Clean Energy (OTCQB:CCGY), to go so far as to issue a press release, advising investors that everything is alright and they are now quoted on the OTCQB.   Others, like Stellar Pharmaceuticals (OTCQB:SLXCF), have been kind enough to bring the situation directly to our attention at BioTuesdays.

    If readers know of other companies that have been impacted by the lack of quotation activity on the OTCBB, please help clarify the situation for other investors by submitting a comment.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
    Mar 02 2:12 PM | Link | Comment!
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