Len Zehr's  Instablog

After launching a breakthrough epigenetics diagnostic for prostate cancer in the U.S. last May, Belgium-based MDxHealth (NYSE Euronet:MDXH), with U.S. headquarters in Irvine, Calif., continues to demonstrate strong scientific data for its ConfirmMDx molecular test and its economic benefits.

"As many as one-in-four men are misdiagnosed with a false-negative biopsy result but have hidden prostate cancer," president and CEO Dr. Jan Groen says in an interview with BioTuesdays.com. "Our test can help urologists distinguish patients who have a true-negative biopsy from those who may have cancer."

As a result, the test can help rule out prostate cancer-free men from undergoing unnecessary repeat biopsies and rule in those men who may require repeat biopsies and potential treatment. "We also can provide prostate mapping of positive methylation results to guide repeat biopsy, because it is important that urologists know the likely location of the cancer."

Last month, the Journal of Urology published results of an efficacy study for ConfirmMDx, which received high marks from analysts.

In the study, researchers in Scotland confirmed that the biomarkers can identify a "halo" associated with the presence of cancer in adjacent negative biopsies and which may be indicative of aggressive prostate cancer. This epigenetic "halo" around a cancer lesion can be present despite displaying a normal appearance under the microscope.

Another study presented at the ASCO GU conference indicated that combining ConfirmMDx with other tests of a first biopsy resulted in an improved prediction of the presence of aggressive prostate cancer, with a sensitivity of 74% and negative predictive values of 91%.

In a research report last month, Roderick Verhelst, an analyst with Petercam in Belgium, said that the studies provide further evidence that DNA methylation-based tests are the way of the future in improving the diagnosis and subsequent treatment of cancer patients. "MDxHealth is on the forefront of this field and thus excellently positioned to benefit from this," he added.

In epigenetics, scientists seek to understand how environmental influences on genes can be used to predict people's risk of developing disease. Epigenetic changes are inherited changes to the DNA molecules that don't affect the actual sequence of DNA. They have been described as "Post-it Notes" on genes that, over time, can lead to cancer.

The performance of the ConfirmMDx test has been demonstrated in more than 42 published studies. It has been tested on some 5,000 patients at leading U.S. and European academic medical institutions. The test uses a proprietary three-gene epigenetic assay consisting of GSTP1, APC and RASSF1.

"As a global leader in epigenetics diagnosis of oncology, we are in an attractive space with a validated platform and biomarkers, plus a clear commercialization strategy," Dr. Groen said following his address at the BIO CEO conference in New York last month.

He points out that there are four FDA-cleared epigenetic drugs already on the market, with more than 60 companies working on new epigenetic therapies. "This sector is booming as part of the promise of personalized medicine to select patients who are more or less likely to respond to particular drugs." Studies suggest that the global market for epigenetics therapies and technologies will climb to more than $5-billion by 2023 from $2-billion this year.

Along with the two efficacy studies last month, MDxHealth released data from a peer-reviewed economic analysis of ConfirmMDx published in the Journal of American Health & Drug Benefits.

Among other things, the analysis demonstrated that a commercial health plan would realize cost savings within the first year of establishing coverage for the ConfirmMDx test for prostate cancer. The upfront cost would be recovered based on the savings associated with avoided biopsy procedures and associated complications.

Given these assumptions and the costs associated with the current standard of care, the inclusion of ConfirmMDx in the management of men screened for prostate cancer resulted in a net cost savings of $588 per patient or a budget impact savings of $500,000 in a managed care plan of one million members, according to the study.

"These numbers provide a strong economic incentive for the reimbursement of ConfirmMDx by commercial health plans," said Petercam's Mr. Verhelst.

Dr. Groen says MDxHealth is using epigenetic markers to develop diagnostic tests for cancer, with: ConfirmMDx products to assess the presence or absence of cancer; InformMDx products to distinguish between aggressive and non-aggressive cancers and to forecast the risk of recurrence; and PredictMDx products to decide which treatments are most likely to be effective.

"Our commercial partnerships demonstrate the value of our technology and biomarkers," he adds. The company runs clinical trials for pharmaceutical companies, out-licenses its platform to pharma companies for their research only, develops diagnostics for pharma companies and has partnered with diagnostic companies in the U.S. for use of MDxHealth's biomarkers.

The company operates a CLIA-approved lab in Irvine, Calif., and is awaiting a decision regarding its New York State license. It also has signed a co-marketing agreement with a commercial pathology lab, PlusDx, which has 25 sales reps in the field that target urologists for traditional pathology work. Dr. Groen says MDxHealth plans to expand the size of its own sales force to 15 from five this year and expand its marketing agreements in the U.S.

The company also will begin looking for commercialization opportunities to sell its prostate cancer test outside of the U.S. He says, "In the U.S., the business comes down to Medicare and commercial reimbursement, while in the rest of the world, reimbursement is tied to hospitals that are on government budgets." Dr. Groen says the company has submitted a substantial dossier for Medicare reimbursement in the U.S. and expects to receive a decision in 2013.

In addition to its prostate cancer test, MDxHealth is also developing ConfirmMDx for lung cancer and InformMDx for lung, colon and prostate cancers. These collaborations currently involve GlaxoSmithKline, Roche and Celldex. MDxHealth also has diagnostic programs in development for esophageal and breast cancer, with partners who wish not to be identified.

Product Pipeline

In January 2012, MDxHealth's licensing partner, Exact Sciences (NASDAQ:EXAS), submitted the second module of its premarket approval application to the FDA for its stool DNA colorectal cancer screening test, Cologuard, which includes an MDxHealth epigenetic biomarker together with MDxHealth's methylation-specific PCR platform.

Last week, MDxHealth reported that revenue for 2012 rose 71% to more than $6-million (EUR 4.6-million). The company initiated billing to U.S. third party private insurance payors in the third quarter of 2012 for tests performed in 2012.

"We are poised to build on this strong momentum in 2013," Dr. Groen says. "During the year, we achieved all of our key milestones in support of the commercialization of ConfirmMDx for prostate cancer, and moving forward, we will continue to execute on our licensed central lab strategy, increasing our market penetration in the urology community and driving the development and commercialization of new ClinicalMDx and PharmacoMDx products and services."

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Results of a recent clinical trial of Vaxil Bio's (TASE:VAXL) ImMucin cancer vaccine in patients with multiple myeloma has validated the company's VaxHit technology by demonstrating safety and a strong immune response in all patients.

"This is not trivial for a first-in-man study," CEO Lior Carmon says in an interview with BioTuesdays.com, referring to 15 patients in the Phase 1/2 study who received some 150 injections in total, without any adverse side-effects. "For me, as an immunologist, the key outcome was the validation of the technology."

Earlier this month, Vaxil said 100% of patients in the study demonstrated a strong immune response of both CD4+ and CD8+ T-cells to ImMucin. In addition, a strong antibody response to ImMucin was observed in 65% of patients.

Dr. Carmon notes the significance of the antibody response, pointing out that, to the best of the company's knowledge, this combination of T-cells and antibodies does not exist in other MUC1 vaccines. "Moreover, these results in patients with a wide range of different immune repertoires support the company's hypothesis of the ability of ImMucin to be universal - that it can activate the patient's immune system with no need for personalization or prior selection based on the patient's immune system type."

Patients in the VAXIL-001 study received either six or 12 ImMucin injections at a dose of 100 or 250 micrograms, along with GM-CSF (Leukine) at a dose of 250 micrograms.

Vaxil contends that ImMucin teaches the patient's immune system to identify and destroy cells that display the cancer marker MUC1 on the cell surface. Because MUC1 appears on over 90% of all cancers, ImMucin has the potential to be used as a vaccine against a wide range of cancers.

However, the specific epitope that ImMucin targets on MUC1 is different from the target used by other MUC1 vaccines; the ImMucin epitope only appears on tumor cells and does not appear in soluble form in the patient's blood. This is a huge advantage, according to Dr. Carmon. If it were to appear in the blood, it could significantly interfere with the specific vaccine-induced immune response and hence reduce its effectiveness.

In addition to ImMucin's specificity to MUC1, its strong and broad immune response, and potential universal use, Dr. Carmon says the vaccine also is unique in its ability to counter cancer's attempt to hide from the immune system and develop resistance to treatment. A reduced need for an adjuvant also increases safety and reduces the cost of the vaccine, he adds.

As a therapeutic vaccine, ImMucin is designed to be given to patients who are already suffering from cancer to help their bodies fight off the disease rather than to prevent the disease in the first place. Multiple myeloma is the second most common hematological malignancy in the U.S., after non-Hodgkin lymphoma.

Dr. Carmon suggests that ImMucin's therapeutic value lies in treating patients in the early stage of disease relapse, providing a window of opportunity for immunity to be built-up. "In a way, we are attempting to change the paradigm of current cancer treatment, which focuses on patients already in relapse, not just in myeloma but in other cancers as well. Hence, we hope to use ImMucin to prolong the patient's remission, so the disease will not come back or, at the very least, to delay its return."

The company also noted that nine of the 15 patients in the latest study had a clinical response to the vaccine. Five patients ended the study with a complete response to treatment and four patients had stable disease, which required no further treatment. Of the six patients with progressive disease, one had demonstrated a significant decrease in the progression rate for a period of time while undergoing treatment.

"These are very encouraging results for a first trial but clearly it is not statistically significant, given the small sample size," Dr. Carmon notes.

Vaxil now plans to conduct a larger study in multiple myeloma this year and is preparing submissions to the FDA. Dr. Carmon says the trial is expected to have a treatment phase and maintenance phase. "We believe the immune response to the vaccine will not last forever, and we will have to boost immunity in these patients. That will allow us to follow more patients for a longer period of time to see the clinical potential of the vaccine."

The company also plans to conduct a small study in Israel with ImMucin this year in patients with solid tumors, possibly in breast or lung cancer.

Last September, Vaxil initiated VAXIL-002, a clinical study in Israel to evaluate the long-term safety, quality of life and long-term efficacy of those multiple myeloma patients who were treated with ImMucin in the VAXIL-001 trial and who had a clinical response and did not require further treatment.

Patients enrolled in VAXIL-002 do not receive ImMucin or any other treatment. They will be monitored until the end of 2015 or until the disease returns or progresses to a stage where further treatment is required.

Vaxil also is developing MTBuVax, a therapeutic vaccine for tuberculosis, one of the largest causes of mortality in the developing world. However, over the past few years, there has been an increase in incidence rates in the Western World due to: the low efficacy of the current TB vaccine, BCG; increased global travel; mutation of the TB bacteria to new strains that are resistant to drug treatment; and a strong link of TB with HIV infection.

Dr. Carmon notes that MTBuVax is in preclinical studies and that promising results have been achieved to date. Earlier this year, the company signed a research agreement with the University Santiago de Compostela in Spain to combine the vaccine with the university's nanoparticle technology to promote a more exact and controlled release.

While the company plans to continue preclinical development, it is searching for a partner for future clinical development.

Vaxil: Development Status

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

OnPoint Medical Diagnostics (OTCQB:ONMD) is pioneering a "big-data" platform for delivering measurable, objective and automated quality assurance (QA) solutions for magnetic resonance imaging (MRI), with plans to expand its framework to include other modalities such as computed tomography (CT), ultrasound and mammography. The company was founded in 2010 to commercialize imaging QA technologies developed by Mayo Clinic, where testing began in 2006.

"We estimate there is a $6 billion global market opportunity for imaging QA and informatics," president and CEO, William Cavanaugh, says in an interview with BioTuesdays. "Right now, with MRI, our competition is pencil and paper, three-ring binders and the fax machine, so we see this as a blue ocean opportunity."

A big-data solution objectively measures each individual imaging scan and compares it against an internal standard or an industry benchmark.

Mr. Cavanaugh explains, "In the U.S. alone, there are over 12,000 hospitals and imaging centers performing approximately 600 million procedures and creating close to 1,000,000 terabytes of image data per year. You can more than double those numbers globally. Organizing, benchmarking and analyzing the volume of medical images quickly becomes what is known as a big-data problem." In addition, these devices come from a variety of manufacturers and have a very wide range of age, strength, capability and quality output.

"Objective measures of image quality do not exist today and even properly calibrated scanners can produce medically useless images," he points out. "Bringing objective and automated quality measures to imaging devices and procedures will benefit healthcare providers, payors and, most importantly, the patients."

Even Properly Calibrated Scanners Can Produce Medically Useless Images

Mr. Cavanagh says producing a good medical image requires coordination between a radiologist, a scanning device, and a scanning operator or technologist, as well as creating an appropriate set of imaging instructions, which are called protocols.

"Today, the leading medical institutions cannot detect when imaging protocols deviate from their internal radiology standards," he contends. "Not only does this jeopardize clinical results, but it also impacts scanner utilization as certain protocols have much longer scan times than others." In CT and nuclear medicine, for example, longer scan times can result in more radiation exposure, creating a significant health risk to patients.

Procedure quality is currently managed with three-ring binders, Word documents and spreadsheets, with no means of measuring adherence to the internal quality standards. "Benchmarking procedure quality from the exact same type of scanner, for the exact same type of exam − say a brain MRI, for example − among other imaging providers down the street, in another state or across the ocean is virtually impossible today, so there is a lot of inefficiency" he adds.

MRI Accreditation - Manual Approach

In January, consulting giant McKinsey & Co. released a study that suggests the estimated savings to the U.S. health care system would be more than $300 billion a year as a result of using big-data to drive efficiency and quality and more than 100 billion euros in Europe from operational efficiency improvements alone.

"Big-data initiates have the potential to transform health care, as they have revolutionized other industries," according to the McKinsey study. "In addition to reducing costs, they could save millions of lives and improve patient outcomes."

Mr. Cavanaugh notes that IBM, SAP, Oracle and Microsoft, among others, are developing big-data platforms for capturing health care information in order to make meaningful use of patient records, as well as for capturing population trends tied to medical claims and pharmaceutical data. "Our focus is on the medical imaging space," he adds.

While imaging quality control had been voluntary previously, pursuant to federal legislation that became effective on January 1, 2012, freestanding outpatient facilities that bill for certain imaging procedures, including MRI and CT, are now required to obtain quality control accreditation in order to continue receiving Part B Medicare reimbursement

The company's first product, OnPoint MRI Quality Assurance, is a "software as a service" (SAAS) solution that addresses the growing quality, regulatory and accreditation demands being placed on hospitals and imaging centers. Mr. Cavanaugh says a SaaS subscription model provides a recurring revenue stream and is highly scalable, leading to higher gross margins.

How OnPoint's System Works

In a research report in January, Zachs Investment Research analyst, Brian Marckx, estimated the total annual domestic MRI quality control market opportunity to approach $250 million, assuming only moderate growth of about 3% over the next few years.

Mr. Cavanaugh says that OnPoint MRI Quality Assurance automates the weekly quality control measures required for accreditation by the American College of Radiology, with real-time dashboards, analytics and trending to ensure that imaging equipment is providing the best possible images for patients.

OnPoint MRI Quality Assurance

Launched in February 2012, the OnPoint product is already now being used by 50 hospitals and imaging centers in 20 states, with some 90 scanners sending images to the OnPoint cloud.

In addition to hospitals and imaging centers, insurance companies are now starting to demand performance against defined quality measures and are exposing quality scores to their members, according to Mr. Cavanaugh. He says, "They want to direct patients to the highest quality, lowest cost providers as it will save health care plans and its members hundreds of millions of dollars."

He adds that leading medical institutions are just starting to explore technologies to meet their medical imaging QA needs. "Existing solutions are coming up short - they simply were not built to deliver actionable information against internal standards and industry benchmarks."

A survey conducted in early January 2013, in which more than 50% of OnPoint's active users responded, found that:

• 100% of imaging managers agreed that OnPoint provides better information on the health of their scanners and helps them to anticipate potential problems;
• 100% of the respondents would recommend OnPoint to a colleague;
• 100% of the respondents found the product easy to use;
• And over 96% of the respondents prefer OnPoint's MRI QA product to their current process.

Mr. Cavanaugh points to a recent study by an independent physicist of more than 500 MRI performance evaluations conducted over 10 years that found that 78% of all MRI scanners have image quality problems and that 25% of all multichannel radiofrequency coils had at least one bad channel.

"The fact of the matter is there are MRIs out there being accredited and reimbursed that probably shouldn't be scanning any patients," he contends.

Mr. Cavanaugh says that in November, the company established a strategic partnership with West Physics Consulting, one of the largest medical imaging consulting groups in the country, to deliver OnPoint software to their 1,100 customers in nearly every state.

Under the accord, West Physics will offer OnPoint's software to all of its current and future customer accreditation-related contracts. "Go-to-market strategies within their installed base are underway," he adds.

Mr. Cavanaugh says that the medical imaging community will be forced to become more efficient as the macroeconomic forces drive down costs and reimbursements, while at the same time insurance companies and patients will be demanding demonstrable proof of quality. "OnPoint's big-data solutions are in the crosshairs of this movement, bringing measurable, objective, quality control with continuous improvement for medical imaging," he adds.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.