CelLBxHealth plc (CLBX.L) Earnings Call Transcript & Summary

Hello, and welcome to ANGLE plc's presentation to Biotech Showcase January 2021. Normally, I'd be presenting in person in San Francisco, but as with all the other presentations, this year, it's a virtual presentation. I'm hoping that this will actually make the presentation widely accessible to larger numbers of investors, U.S. investors, than otherwise might have attended. And to make the presentation accessible, I propose to have a relatively concise summary of the investment opportunity at the beginning of the presentation. And then during the rest of the 30-minute period, there will be a lot more detailed discussion. So people can dive in and out of the slides as they want. The slides will actually be quite detailed in their content. Obviously, I won't present all of that information, but you can study that offline. And most importantly, we'll provide a contact e-mail address for any investors that would like to get in touch and follow up with detailed questions that they may have. We're particularly interested in bringing U.S. investors into our stock and have proactively been pushing over the last couple of years. And in fact, the 2 largest institutional investors in ANGLE plc, notwithstanding the fact that we're currently London-listed, are in fact, U.S.-based major institutional investors. So we've been successful in achieving that. And ANGLE's business is all about trying to transform cancer care through a liquid biopsy based on a simple blood test. A normal sort of legal disclaimer. And now we can move into the presentation. So the overall focus for ANGLE related to the fact that everybody -- every patient's cancer is different. You imagine that 3 patients with breast cancer will have the same disease, but in fact, they have the disease in the same part of their body, but it's fundamentally different. And what happens is that the disease changes over time. So a treatment that might work initially will no longer work later and vice versa. And the treatment that works for one patient will not work for others. So it's really, really important to personalized cancer care. And that's what ANGLE’s approach is all about, enabling rapid real-time decision making on how best to treat patients to improve their outcomes. And it also has the added benefit of reducing the health care expenditure by targeting treatments which are likely to work rather than as currently is the case, a large amount of money being spent on treatments which are unsuccessful. And to achieve this, ANGLE has a patent-protected product-based solution for the liquid biopsy market, which is very unusual compared to most players in this sector. So this is the overall summary of where we are at the moment. We've got very strong progress. There's a lot of momentum within the business. We've got 36 peer-review publications, covering 24 different cancer types that shows that our Parsortix liquid biopsy can be successful in harvesting cancer cells from patient blood and critically, these cells can be analyzed to provide meaningful information to guide treatment. We've made a lot of investment both in terms of money and time in progressing an FDA submission for our Parsortix platform, seeking the first ever FDA clearance for a product to separate cancer cells from patient blood for subsequent analysis. And we've successfully made that submission in September 2020, and we're now in the midst of a substantive review by FDA. We believe that the prospect of FDA clearance is earliest in Q2 of this current year. So by the end of June is the earliest opportunity for us to get an FDA clearance, and as I mentioned, that will be the first ever FDA clearance for harvesting cancer cells for subsequent analysis, and the analysis is the key part of that statement. We're also progressing in ovarian cancer detection study, which comes after 2 successful studies that we've already had. And this is a clinical verification study, showing that our system can be used to detect the presence of ovarian cancer via a simple blood test. And we're progressing multiple corporate partnerships. So we see this technology as something that can unlock many, many different opportunities, and we want to partner with large companies to exploit that. We've got several conversations in train at present. So investors often say, why invest now? Well, there is macro trend for a start. Large mega trends showing that the idea of liquid biopsy is definitely here to stay in cancer treatment. And it's a very large-scale market opportunity that is developing, but there's also specifics relating to ANGLE. We are moving forward very, very fast. We're establishing 2 significant clinical laboratories, one outside of Philadelphia and the other one in the U.K., which are being developed to be accredited so that they can process patient samples. So that will really accelerate our business. We're also developing a pharma services business where cancer drug trials can utilize our Parsortix system to -- as a biomarker to improve the performance of those trials. And bear in mind that the one key advantage of a liquid biopsy solution is that it can be repeated in a drug trial. So you can test the patient before, during and after drug administration. You can't do that with a tissue biopsy, obviously. We're progressing corporate partnerships, and we have a business model which is really, really well differentiated in the sense that we not only have the ability to offer services as most others do in the liquid biopsy sector via the clinical abilities I just mentioned, but we also have a product, and this is critical. So a patent-protected product that can be sold worldwide to hospitals so that they can do tests in-house, and that gives us a very leveraged business opportunity. And we're looking to have the first mover advantage with the first-ever FDA clearance for such a product. And indeed, there are key clinical benefits in using Parsortix and looking at circulating tumor cells, which are intact living cancer cells as opposed to what the most of the industry is doing, which is looking at circulating tumor DNA known as ctDNA, which is fragments of dead cancer cells. Those are limited very much to DNA and cannot look at RNA and protein expression. So there are major advantages, if you could get an actual cancer cell for analysis. So that provides the overall summary of the position. And now I'm going to give a lot more detail on the business and how it operates. So the first thing to look at is that the Parsortix system is addressing major flaws in current standard of care. And the flaws are as follows: you can -- the treatment is by and large driven by analysis of tissue biopsy, analyzing cancer cells that have been cut out from the patient. And the fundamental problem there is that you cannot repeat those tests. Once the cancer is being cut out and the tissue is being cut out, you can't do it a second time. And that means you don't have an ongoing picture of what's happening as the cancer changes, and that's why patients don't get personalized cancer care. We want to change that by providing a method by which it is possible to get cancer cells on a repeat, noninvasive, easy approach so that those cells can be analyzed multiple times to make sure that the patient gets the right treatment during their care. And it's very interesting, if you look at breast cancer, the national cancer guidelines in the United States recommend a tissue biopsy for metastatic breast cancer, which is where we're seeking our first FDA clearance. As soon as the secondary cancer site can be identified, that's what it means by metastatic, it spread to a secondary place. There should be a tissue biopsy of that secondary location. However, such a biopsy is actually quite difficult to achieve, and in fact, over -- only about half of all metastatic breast cancer patients get a successful tissue biopsy of their secondary site. They may be too ill, the tumor is inaccessible or there may be insufficient tissue. So the Parsortix approach, which is a simple blood test, in recovering cancer cells from the blood samples for analysis completely removes that problem. It means that all patients can have a blood test, cancer cells can be obtained and they can have a routine change to their treatment as is required to give them personalized cancer care. The market that we can address with this approach is enormous. It's been estimated by multiple different parties to be over USD 100 billion in total. And that ranges everything from the detection of cancer in high-risk groups to selection of therapy, different drug treatments, to assessing the treatment in the patient to make sure that it's being effective and then actually monitoring patients in remission. So seeking to find means of an early detection of a possible relapse so that they can have appropriate treatment. So there's a very, very wide range of opportunities once you can get the cancer cells. So Parsortix unlocks all of these markets, and indeed, it does so across all the different cancer types. So far, over 24 different cancer types have been tested by major cancer centers using Parsortix and the system worked effectively for all of them. In terms of longer-term opportunities, there is a big interest in early screening for cancer. And we think that in the longer term play, that will actually emerge as quite effective because the circulating tumor cells are an indicator, not just the presence of cancer, but also of its aggressiveness as well. The circulating tumor cells, which are the cells that travel in the blood from the primary tumor site and then can land somewhere else and cause a secondary cancer, those, in fact, are the ones that provide information on the aggressiveness of the cancer and the way that it's spreading. And importantly, the assessment and analysis of an intact cancer cell or circulating tumor cell is the closest proximity to a tissue biopsy, which is also intact cells. The big difference being, of course, that circulating tumor cell tests can be repeated as often as you want via a blood test, whereas a tissue biopsy can't. So with the circulating tumor cell, you can get the complete picture of the cancer. You could look at DNA, RNA and protein expression, just the same as you can with tissue. In contrast, however, the -- most of the industry is focused on circulating tumor DNA. This is also known as ctDNA. This is fragments of dead cancer cells. So when a cancer cell dies, it breaks into millions of pieces and it's in the bloodstream for a short period of time before being excreted. So those fragments can provide some information on DNA, but they can't provide an information on RNA and protein expression. So it's only a partial picture. We see the 2 approaches, circulating tumor cells and ctDNA as been complementary because the same blood -- tumor blood, the same blood sample from the patient can be used to analyze both CTCs and ctDNA, if you have a Parsortix system, ANGLE’s proprietary approach. And so we're seeking to partner with those involved in circulating tumor DNA in order to give them the added benefit of being able to investigate RNA and protein expression. Our technology is actually very simple in concept. It is a microfluidic technology. What you see here is a slide, which -- the blood flows inside that slide and the channels are closed at the end. So the blood has to go either left or right, and that takes it up a series of steps, including the microfluidic structure. And the blood cells, red and white blood cells, can go straight through the critical gap and flow away. Whereas, the cancer cells are larger and less compressible, and they get held at the critical gap. And what this does is, it enables a very small number of cancer cells. So there might be 2 cancer cells or there might be 10 or sometimes 100 cancer cells in amongst 10 billion blood cells in a tube of blood. It enables those cancer cells to be separated from the surrounding blood cells. And we've got an automated instrument, the Parsortix instrument, which enables that process to be run automatically. So the user adds a tube of blood to the middle of the instrument hits go and the machine will automatically under control pressure circumstance push the blood through the microfluidic, separate the cancer cells and then the flow can be reversed and the cancer cells removed. And this is manufactured for us on contract by third parties who have a large capacity to scale up as we require. Now I'm going to show an animation first and then a video of how this actually works. So what you're looking at there is a Parsortix cassette, the same size as a microscope slide, and the blood flows inside that. And now you should be seeing the animation. As we zoom in, that's the inlet there and then the blood flows down the channel, which is closed at the end and it has to go either left or right. So we're zooming in on the left-hand side and the animation here is showing red and white blood cells going up a staircase through the critical gap and flowing away, and the cancer cells shown as green here being held in the final gap. Very simple, easy process, and as I mentioned, we can reverse flow or machine automatically reverses flow in order to recover those cells. So now to look at what I always think is a really exciting presentation, which is an actual patient's blood flowing within a Parsortix cassette. This has been videoed underneath a microscope with 100x magnification. So here, you see on the left-hand side, the red and white blood cells streaming in. Those lines are the edges of the staircase is going up the staircase. The light colored area is the critical gap. So that's a single cell deep, which is why it's light colored. And then down the bottom here is the exit channel. So the red and white blood cells are flowing away. And in a minute, you're going to see a single cancer cell. So here is a cancer cell, which is sitting on the final step. And the beauty of this is the blood continues to flow, it doesn't clog up, and it just very easily holds the cancer cells. And there they are, the large cells on the final critical gap. So this approach is a patented worldwide and multiple patents in the United States, which are granted. So that we own this technology, and it's a very, very neat, low-cost and highly efficient way to recover cells when there is only 1 cancer cell in 1,000 million blood cells. We can still recover those cells for analysis. So I mentioned earlier about the industry being primarily focused on fragments of dead cells, and the reason for that is, they don't have a Parsortix. Everybody would much rather have a real cell for analysis. It's just they don't have the technology capable of extracting those cells from blood because it's technically enormously challenging because there are so few cells. We've solved that technical challenge, and that opens up a massive market opportunity, as I'm about to explain. Now just so you know, this is something that has been well characterized by the industry, by cancer centers. There are now 36 peer-reviewed publications from world-leading cancer centers using this independently in their own labs and publishing their results. There have been 7 separate studies that compare Parsortix against the legacy CellSearch system and show in every case that Parsortix outperformed CellSearch and has some key advantages. And on top of that, this system is ideally suited for capturing circulating tumor cell clusters, which are clumps of cancer cells circulating in the blood as a group. And they've been shown to be highly metastatic, and there are some leading researchers that believe the spread of cancer -- and remember that over 90% of patients who die of cancer, die of the metastatic spread of their disease, not their primary cancer. These circulating tumor cell clusters are absolutely critical to the speed of spread, and the Parsortix system has pretty much unique advantages in being able to get hold of those circulating tumor cell clusters as well. I mentioned that we put a lot of effort into an FDA submission for Parsortix. Actually, that's over 5 years of work and a great deal of money has been put towards this. We process over 10,000 samples in pursuit of an FDA clearance. And the great news is that the clinical studies were led by MD Anderson, together with 3 other world leading U.S. cancer centers. And we've already announced that we have positive results in terms of the ability to capture cancer cells for a significant proportion of breast cancer patients. The FDA submission has been made in relation to metastatic breast cancer, but that is only the start. Once we have that clearance, we intend to expand that to all solid tumor cancer types overtime. So as I mentioned in the introduction, we are now in substantive review with FDA. So the documentation that we submitted has been accepted, and we're awaiting a full dialogue with FDA on our submission. We believe that gives us the prospect of an FDA clearance, which would be the first of its kind. The earliest time is towards the end of Q2 this year. We processed over 15,000 samples. We submitted 400 technical reporting documents. Now we followed a Q-Submission process. So we had several Q-Submission meetings with FDA, the most recent of which resulted in a face-to-face meeting in January of last year, where we reviewed results, and we sought to identify remaining technical questions that FDA may have. We've indeed found a number of areas where they wanted further work done, and that has already been prepared and was submitted in the full submission made in September -- late September last year. And obviously, the FDA clearance would be a major validation for our business. The commercial pathway, we believe, will open up post an FDA clearance. We've already got sales of circa $1 million per annum from translation -- through translational researchers in cancer research. We expect that to expand dramatically post FDA clearance and also with sample-to-answer solutions that we're developing to make it easy for the users to do the downstream analysis of the cancer cells once they've achieved them. We've got a big push to expand our business into pharma services, where the Parsortix system will be used in cancer drug trials as a biomarker, and I'll explain that in more detail. We've got a product-led strategy. And once we've got FDA clearance, we'll be able to sell the Parsortix system for use by hospitals and clinical laboratories in treating patients. And importantly, we're setting up our own clinical laboratories as accelerator and demonstrator, which I will also explain. The clinical labs that we're establishing are focused on pharma services, so firstly. And then secondly, as an accelerator and demonstrator for new clinical use, i.e., for patients. The idea here is to demonstrate opportunities for the wider industry to adopt. So ANGLE wants to work with large-scale clinical laboratories to adopt and utilize our technology. Nevertheless, we think that we can accelerate our commercialization and generate early revenues by having our own clinical laboratories. As I mentioned, we have 2 being established, one in the United States and one in the U.K. The U.K. one will be up and running within the next 1 to 2 months. The U.S. one will be up and running roughly the end of March or early April. Both labs will then be accredited, which will probably take another 2 quarters to get accreditation, but in the meantime, we expect to be generating revenues from the use in pharmaceutical drug trials. And the pharmaceutical drug trials market is a very large market. If you take just one element of it, which is immunotherapy, the -- there is a very large market of selling immunotherapy drugs for treatment of cancer. Approximately, $22 billion of revenues at the moment for the pharma companies, growing extremely fast, over 40% per annum. The reason this is growing is because these new drugs can stimulate the patient's own immune system to attack the cancer and can essentially educate the immune system so that it can work out how the cancer has been evading attack. And this can have some very, very good results for some patients. The problem is that it's only about 1 in 5 or maximum 1 in 2 patients who will respond to these drugs, and they're very expensive. Approximately, $170,000 per patient. Every patient that has them is likely to suffer side effects and yet only 1 in 5 will respond. So there is a huge need for a biomarker to identify which patients will respond. That's improved patient outcomes and reduces health care spend. But immediately, there is an opportunity for the pharma companies to adopt a biomarker like Parsortix in its trials. And there are over -- whether it's circa 1,400 active clinical trials running, which are focused on PD-L1 program death-ligand 1. And unfortunately, there is no good biomarker to determine the response to these PD-L1 immune checkpoint inhibitors. The tissue biopsies have been used, but unfortunately, they're taken a primary diagnosis of the patient, whereas these drugs are deployed later. And when the cancer is much more advanced, and therefore, the tissue biopsies are out of date. PD-L1 is a protein expressed on the cancer cell, and therefore, the ctDNA does not work because remember, ctDNA is limited to DNA analysis. It cannot do protein analysis and PD-L1 is a protein. So the great thing is that 3 different independent cancer centers have shown Parsortix can be used to capture cancer cells from patients and then assess the presence of the protein PD-L1 on those cancer cells. And 1 of the 3 cancer centers is actually showing some pilot data that this PD-L1 expression is aligned with the likely response of the patient and could potentially be a predictive marker of which patients will respond. So in-house, ANGLE has put a lot of effort in and continues to develop an assay for PD-L1. As you can see from this slide that we think the market opportunity just in the clinical trials for new cancer drugs, this is not including treating patients, is over USD 1 billion per annum. And we believe that we are uniquely positioned to address that market. So it's a major area of focus for us once we have our clinical lab setup. The pharma services companies want the samples to be analyzed in a clinical lab. Hence, we need the clinical laboratories. The breast cancer focus of our FDA submission addresses a very large market. The breast cancer market for Parsortix could be as much as $4 billion per annum. As I already mentioned, the NCC and National Cancer Guidelines in the United States mandate a tissue biopsy for metastatic breast cancer patients, which really just highlights how important it is to get more accurate, up-to-date information on what's happening to the cancer to guide treatment, notwithstanding that metastatic tissue biopsies are highly invasive, general anesthetic and a patient may well be in hospital for several days afterwards. And often, the tissue parts cannot be done at all. So for example, if the metastatic spread has been to the brain, the brain metastasis was unlikely to have a tissue biopsy, unless it's part of a surgical response to the disease. So over half of metastatic breast cancer patients do not have successful biopsies. Our FDA submission is being designed to demonstrate that an alternative approach is a simple blood test with Parsortix and able to get hold of the cancer cells and do all the same analysis that you would do with the cancer cell from a tissue biopsy. And on top of the obvious benefit to patients, it's a reduction in costs. On average, it costs $16,000 for every tissue biopsy for a metastatic breast cancer patient. And obviously, we could tell our test at significantly lower than $16,000 and make a very good return. We're also progressing an ovarian cancer test. This combines not only our Parsortix system for harvesting cancer cells from the patient blood, but also a very highly sensitive molecular analysis platform called HyCEAD Ziplex, which we acquired 3 years ago, and is the basis of our Toronto operation. So combining the Parsortix system to get the ovarian cancer cells out of the blood and then the HyCEAD Ziplex system to detect their presence, enables us to a highly sensitive approach to identifying ovarian cancer. So we're pioneering this for a test for women with a known pelvic mass. So they've got an abnormal pelvic mass, which requires surgery, in order to give them a blood test before their surgery to triage them as to whether they need a specialist cancer surgeon for their operation or whether they can just have a local general surgeon and not have to have a rush to have their surgery completed. And this is really, really important because the mortality rate for ovarian cancer patients who do not get a cancer surgeon is much, much higher than those who get the appropriate treatment. Whilst, of course, referral to a specialist cancer surgeon increases costs dramatically. So for all those reasons, it is very, very important to identify the presence of ovarian cancer early ahead of the surgery. We've already completed 200 patient studies with the best-in-class results, far outperforming current laboratory techniques to detect ovarian cancer with an area under the curve of over 95% accuracy. We're currently running a clinical verification study with the University of Rochester Wilmot Cancer Center, which is due to complete in the second half of this year. If successful, we will then offer this ovarian cancer detection test in our clinical laboratories as a laboratory developed test. The ovarian cancer market is a very large market in its own right. Over $1.7 billion available to us. It's important for our commercialization that we pursue a partnership approach. Our cancer circulating tumor cell technology can be married with existing medtech company's techniques in order to expand their sales potential. So whereas, they concurrently sell for tissue biopsy, it can be expanded to sell multiple times, if you can repeat their test with a blood test. So we're working with those companies. We're working with pharma companies to enable precision medicines and with clinical laboratories and CROs for revenue generation. And the screening companies in ctDNA, we can work with them as well to classify whether that's clinically relevant cancer or not. So in summary, we have a world-leading position in the liquid biopsy market. We have the prospect of FDA clearance. And we've got a well-defined commercial plan, which is well supported with peer-reviewed papers. We're partnering with many major cancer centers, as shown on this slide. So thank you very much for your attention. Please do contact us on the e-mail address shown on this slide. We are keen to bring on board more U.S. investors. And in fact, we already, as I mentioned earlier, our 2 largest institutional investors are United States investors. Thank you very much for your attention.