MD601024

Transforming lung cancer diagnostics with a non-invasive breath analysis technology, offering a more accurate alternative to CT scans. Developed from Gates Foundation-funded research, their patented test detects cancer biomarkers in exhaled breath with 94% sensitivity and 85% specificity.

It reduces unnecessary procedures and healthcare costs, poised to disrupt the $107B global cancer diagnostics market. Early feasibility studies have shown promise in using their platform for identifying COVID-19 and pneumonia, demonstrating its versatility. With further development, the technology could be adapted to screen for various cancers and respiratory conditions, making it a powerful tool in early disease detection.

With future plans to expand into detecting other diseases like COVID-19 and pneumonia, their versatile platform offers significant growth potential, making it an exceptional investment opportunity backed by strong clinical validation.

Overview

  • Industry: Medical Devices
  • Founded: 2015
  • Mission: The company aims to revolutionize lung cancer detection through a non-invasive, accurate, and cost-effective diagnostic tool. Its breath analysis technology offers an alternative to current screening methods, reducing false positives and invasive follow-ups.
  • Technology: Proprietary breath analysis platform utilizing biomarkers in exhaled breath to detect cancer. Three U.S. patents cover the technology, initially developed for tuberculosis detection and later adapted for lung cancer.
  • Unique Value Proposition: The company's unique value proposition lies in its non-invasive, highly accurate, and cost-effective lung cancer detection platform. Their proprietary test analyzes biomarkers in exhaled breath, offering the following advantages:

    High Accuracy: Sensitivity of 94% and specificity of 85% for detecting lung cancer, reducing the false positives common with traditional CT scans (which have a 96% false positive rate).

    Non-Invasive and Simple: The test requires only a single breath sample, making it significantly more patient-friendly compared to other diagnostic methods like biopsies or repeated CT scans.

    Cost-Effective and Portable: It provides a lower-cost alternative to expensive and invasive diagnostic procedures while being easy to use and portable, making it accessible to a broader population.

Problem & Solution

  • Problem:

    Cancer kills more people than any other disease in the world. And lung cancer kills more people than any other cancer. More than 1 in 2 people die within one year of being diagnosed. Lung cancer is often detected late due to its asymptomatic early stages.

    Current screening tools, such as CT scans (not easily accessible, and requires radiation), produce a 96% false positive rate, leading to excessive invasive follow-ups. That is why, of the major cancers, lung cancer screening has the lowest compliance rate at just 6% vs. 60-85% for other major cancers.
  • Solution: A non-invasive, affordable diagnostic platform that significantly reduces false positives by detecting cancer-specific biomarkers in exhaled breath. The test is simple, portable, and provides early detection of lung cancer.

Market Potential

  • Lung Cancer Impact: Leading cause of cancer deaths globally (1 out of 5 cancer deaths - more people die of lung cancer than of colon, breast, and prostate cancers combined), with a low 5-year survival rate of 18.1%. Early detection significantly improves survival (55.2% for Stage 1 diagnosis). Current screening methods, such as low-dose CT scans, have high false-positive rates and are costly.
  • Market Size: The global lung cancer diagnostics market is estimated at $107.45 billion by 2023, with a projected 6.16% annual growth rate from 2024 to 2030.
  • Opportunity: The company’s diagnostic tool could reduce unnecessary follow-up tests and improve the accuracy of lung cancer detection.

Product

  • Core Technology: The test analyzes volatile organic compounds (VOCs) exhaled during cancer metabolism. A patient provides a single breath sample, which is analyzed via mass spectrometry, showing high sensitivity (94%) and specificity (85%) for lung cancer detection.

    The test can be used for two major lung cancer indications:
    1) characterization of pulmonary nodules and differentiation of benign disease from malignancy
    2) screening to detect early-stage LC

    Using this product as an adjuvant test to CT scanning can reduce ambiguity for physicians and thus reduce invasive biopsy procedures or excessive radiation exposure from unnecessary screening for the patient.
  • Development Stage: Clinically tested on over 800 patients. The platform has shown potential for detecting several other diseases, including COVID-19 and pneumonia.

Business Model

  • Revenue Model: The company plans to monetize through lung cancer screening and nodule differentiation, leveraging the test.
  • Sales Channels: Initially focused on North America, targeting healthcare providers and hospitals for early detection and diagnostic support.
  • IP Status: Holds exclusive licenses on key patents from a university, with obligations to seek regulatory approvals by 2028.

Financials

  • Current Status: No revenue yet.
  • Burn Rate: $40k/month, with 1.5 years of runway.
  • Funding to Date: $6 million raised, primarily allocated to prototype development and ensuring technology repeatability.

Team

  • Leadership: Experienced team with decades of expertise in medical device development, diagnostics, capital markets, and lung cancer research.
  • Key Strengths: Extensive background in lung cancer research and commercialization of medical technologies, coupled with strong capital-raising capabilities.

Competitive Analysis

  • Competitors: Breathe Biomedical, Owlstone Medical, and Breathomix. Each uses varying approaches to breath analysis or other non-invasive diagnostics, but face challenges with accuracy, cost, and sample requirements.
  • Advantage: This technology has quantitatively measured specific carbonyl biomarkers (ng/L) in breath to detect LC. This patented technology has been clinically tested in over 800 patients and reported in 10 peer-reviewed journal articles.

Risks & Mitigation

  • Regulatory: Approval from regulatory bodies (FDA, CE) is essential for market entry. The company has a timeline to seek regulatory clearance by 2028, with a pivotal trial planned in 2025/2026.
  • Market Adoption: Educating physicians and gaining market acceptance for a new diagnostic method may present challenges. The company plans a robust educational and marketing effort to overcome these barriers.

Funding Requirements

  • Amount Sought: $1M - $3M (possibility for increased amount)
  • Use of Funds: Primarily for clinical trials, regulatory approval, and commercialization of the platform.
  • Runway: Expected to extend the runway by 1.5 years post-funding.

Exit Strategy

  • Potential Exits:

    Acquisition by larger diagnostic or medical device companies - many diagnostics companies would look to acquire them once they prove repeatability.

    IPO following successful commercialization and regulatory approvals - exploring options to go public now.
  • Timeline: Likely within 5-7 years, contingent on regulatory milestones and market adoption.

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