- UPDATE: Zacks, on 9/30, initiated coverage of BLGTY with Outperform rating
- Focus on eye care and cancer diagnostics targets billion-dollar growth markets.
- Portfolio approach provides unique business model to accelerate innovation.
- Biopharma expertise of management and board ensures bench strength for execution.
In line with my goal to provide valuable information about under-covered Israeli companies that trade on U.S. exchanges, I interviewed the CEO of BioLight Life Sciences Investments Ltd. The Tel Aviv-based company takes a portfolio cluster approach around defined medical conditions to invest, manage and commercialize biomedical products. The company's current clusters are opthalmology and cancer diagnostics. The company is expected to report quarterly results on August 28.
It owns all of ophthalmology treatment-maker XLVision Sciences whose technologies include IOPtiMate, a laser-based non-invasive surgical treatment for glaucoma; TeaRx, a point-of-care dry-eye syndrome diagnostic test; and, Eye-D, a long-term controlled release drug-delivery platform. IOPtiMate was recently launched and human clinical trials of Eye-D and TeaRx began earlier this year.
BioLight operates in the cancer diagnostic space through a 29% controlling ownership stake in Tel-Aviv Stock Exchange-listed Micromedic Technologies and its technologies, including CellDetectwhich helps identify tumor cells in cytology samples for various cancers (e.g. a cervical cancer product commercialized in China). Micromedic is also developing a genetic test for identifying patients at risk of BRONJ (bisphosphonate- related osteonecrosis of the jaw) which is a complication affecting about 1-in-5 patients receiving bisphosphonate treatment for bone lesions or bone metastases, and a small percentage of osteoporosis patients.
The company's U.S.-traded ADRs Level 1 [OTCQX (OTCQX:BLGTY)], began trading in March, with 100 shares backing each ADR. The underlying shares are traded on the Tel-Aviv Stock Exchange and are included in the exchange's Biomed index (TA - Biomed) and BlueTech index (TA - BlueTech). Both indexes serve as an underlying asset for index-linked certificates and indexed mutual funds traded in Tel Aviv.
Suzana Nahum-Zilberberg is the chief executive officer. She has more than 15 years of pharmaceutical and biomedical experience including leading Teva Pharmaceutical's penetration into Japan and China.
Why should an investor should have BioLight as part of a portfolio?
BioLight has a unique business model. For the investor, a single investment provides access to a broad portfolio of products, across defined medical conditions.
This business model offers the potential to address the needs of large industry leaders, which could allow them to capitalize on the knowledge we've gained.
What are the key factors that affect the market for your products?
The factors are economic, geographic and demographic. At a high level, our products are focused on the serving a growing population of the aged all around the world. More specifically, in the developing world, with the growing need to decrease costs, we are affected by efforts to move to office-based procedures while also providing adequate medical treatments in both rural and urban areas.
Which accomplishments over the past 12-18 months do you feel are most significant?
There are several which were enabled very efficiently, in terms of resources put in and time to achieve, by our unique business model. The commercialization of the IOPtiMate system and CellDetect for cervical cancer kit were important accomplishments. We also started human clinical trials for the Eye-D and TeaRx technologies. Elsewhere, we're seeing impressive clinical results in CellDetect for bladder cancer and BRONJ technologies.
[Author's Note: Eye-D has begun in the U.S. a Phase I/IIa glaucoma treatment trial and patent protection of the drug delivery platform now extends until 2031. Interim data from a blind clinical trial of CellDetect with under 75 patients showed improved cytology detection of bladder cancer.
The global glaucoma treatment market is estimated at $5 billion, according to a recent company presentation, with ~70 million people affected. It cites the key unmet needs as low compliance to eye drops and significant side effects in existing treatments. Dry eye syndrome affects ~100 million worldwide. Analysts at GlobalData forecast that the global DES therapeutics market will reach $5.5b by 2022 fueled by a novel treatment pipeline and an aging population.]
Looking ahead, what are the scenarios that will probably have the most impact on the company in the next 12-24 months?
In ophthalmics, we are continuing the commercialization of the IOPtiMate for glaucoma surgeries, focusing on the Asian markets for the first commercial significant sales of the product. As well, we expect to advance the clinical trial of Eye-D long-term controlled-release drug-delivery platform.
We are also expecting interim results and the initiation of U.S. clinical trial for the TeaRx diagnostic test for dry eye syndrome. In cancer detection, we expect to continue commercialization of the CellDetect cervical cancer screening kit in China and completion of the clinical trial with the CellDetect monitoring kit for recurrence of bladder cancer. We are also anticipating the final results of the diagnostic product for the BRONJ side effect, which follows the successful interim clinical results we recently reported.
What differentiates your offerings to customers and end-users?
Let's focus on two products, IOPtiMate and CellDetect. IOPtiMate is a non-invasive alternative to glaucoma surgery. It's a device with great efficacy and a superb clinical profile. This is important because glaucoma surgery presents the possibility of many adverse events and we provide a very safe procedure which is of great value to surgeons, patients and insurers.
At the same time, CellDetect is a unique technology platform with the ability to get a higher accuracy of cancer detection with a very simple process to use which provides the ability to conduct many tests with limited resources in a much better, efficient manner.
Looking at the competitive landscape, there are a number of well-established players already in these fields. Which are the companies to watch?
In the Ophthalmic arena you can find big specialized companies such as Alcon, Allergen and Bausch+Lomb, as well as other small companies. We believe our ophthalmic offering is different and creates a unique opportunity in this competitive market. In regard to the cancer diagnostics business, each of our products provides a solution for unmet needs in the marketplace and provides a competitive edge.
And in looking at comparisons, which companies should investors measure BioLight against?
Are there plans to raise capital to fund growth or operations?
The company has enough cash to allowing it to pursue and execute our business plan for the next few years. However, the nature of our operations, as well as our unique dynamic corporate structure, should enable us to further finance our operations through commercialization of products, strategic partnerships with well-known biopharmaceutical players and also sophisticated investors that will be willing to invest in our technologies. We expect this to be based on valuations that are far beyond our entire current local Israeli BioLight market cap.
A lean corporate structure, shared expertise and sourcing capabilities enable the company to optimize cash management and use of funds. Our portfolio is focused on relatively short time-to-market strategy, which includes efficient development processes, clinical/commercial strategy aimed to reaching value driving milestones in the short-medium term, while investing in products with competitive advantages in potential markets of billions of dollars.
The company is under several dialogs with big-players in the industry to reach strategic collaborations that will enable it to expand its operations while sharing costs and paving the way for commercial platforms for each of its technologies. After completing a successful equity round early this year, the company now has enough cash to pursue and execute its business plan for the next few years.
Where do you see sales trending in the next 12-24 months?
We don't provide revenue forecasts. However, we expect additional growth in sales of the CellDetect for cervical cancer diagnostics in China and in additional countries in the future and accelerating growth of the IOPtiMate product in China and other Asian countries. Following the success of the bladder cancer clinical trial we could also enjoy sales of this product in the U.S. and European markets.
We are also forecasting that TeaRx, our Dry Eye Syndrome diagnostic test, will reach the market two years from now.
What part of the business is being ignored by investors or not getting the proper attention with respect to its upside potential?
The huge potential of the ophthalmic business is being undervalued by the local Israeli market. This belief is strongly supported by the significantly higher market cap of peer companies traded on Nasdaq. Our ophthalmic technologies are directed to a growing worldwide market of billions of dollars with clear unmet needs. The company currently has three technologies in different stages with potential to become leading products.
We also take a global view of all our products, and are working to commercialize the products in many countries, while pursuing regulatory pathways in the U.S. I think this differs from many small U.S.-based companies, many of which are focused only on the U.S. market. This will allow us to multiply the potential of our products.
Micromedic is significantly undervalued by the market, given its high market potential and both commercial and later stage of development of our tests.
Along those lines, then, how accurate is investment community in estimating your company's results?
Since the company is new to potential investors in the U.S., we have built a structured process to present the company's strategy and investment opportunity. This is aimed to provide the investment community with the ability to properly evaluate our unique technology advantages, value creating events, targets, clinical development and market potential.
We have a rich and balanced technology portfolio addressing both large and growing global markets. We foresee multiple near-term catalysts to drive value to our investors.
The company is backed with significant biopharmaceutical experienced shareholders including Israel Makov, former president & CEO of Teva, Dilip Shanghvi, founder and managing director of Sun Pharma, and Dan Oren, president and CEO of Dexcel Pharma.
In addition, in our last financial round, Phoenix Holdings, Meitav Dash and Excellence, three of the leading institutional investors in Israel, invested in the company and became insiders.
Are there any plans to promote the stock and boost trading volumes?
Fundamentally, BioLight's business model, together with its rich product portfolio, presents a unique investment opportunity. We have initiated an ADR Level 1 program and began trading in March. This is the first step in our long-term plans in the U.S. capital market.
Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.