IN THE PIPELINE: AngioDynamics Could Bring Safer Cancer Treatment
By Jennifer Hoyt Cummings
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--If AngioDynamics Inc.'s (ANGO) tumor-zapping device, NanoKnife, lives up to expectations, cancer patients will soon have a treatment that's safer than therapies now widely available.
NanoKnife is unique in that it uses an emerging technology called irreversible electroporation, a technique in which needles inserted in the tumor send electrical pulses that cause cancer cells to die but appear to keep nearby structures intact.
If clinical studies prove this to be true, NanoKnife would have a huge advantage over more traditional therapies, like thermal treatments, which use extreme temperatures to kill tumors effectively, but damage surrounding tissues and nerves in the process.
Clinical studies on NanoKnife could take several years, but analysts say AngioDynamics' new chief executive, Jan Keltjens, has the company on the right path to make the device a commercial success.
Assuming it gets regulatory approvals, AngioDynamics hopes to begin enrolling patients in clinical studies by the end of the year. The device is already approved by the U.S. Food and Drug Administration for a generic indication, but the company doesn't yet have approval to market it as a cancer treatment. AngioDynamics, which sells a broad line of medical devices, hopes the studies give it the evidence it needs to get that marketing approval.
Initially, AngioDynamics will be testing NanoKnife in the U.S. on prostate and pancreatic cancer and internationally on liver cancer. Keltjens estimated that if NanoKnife can be fully deployed for these indications, the company could see annual revenue from the product in the "hundreds of millions" of dollars. AngioDynamics' total revenue for the fiscal year ended May 31 was $195.1 million.
With the very sunny outlook surrounding NanoKnife comes caution. When Keltjens took over at the helm of AngioDynamics in March, he found the company was focusing on immediately increasing sales of NanoKnife, before first developing a solid base of clinical evidence to back the product.
Since then, Keltjens established a clinical timeline for the device and has been allocating millions of dollars for the trials, making NanoKnife the company's most expensive program as it makes up 40%of research and development spending.
Another priority for Keltjens has been making sure the company doesn't create "false promises" for patients, particularly since solid evidence backing the device won't be available for several years.
Analysts say they believe in NanoKnife's potential, but they're also cautious.
Williams Capital Group analyst Elizabeth Senko said the company's estimate for a NanoKnife market in the "hundreds of millions" annually is reasonable.
"But the question is how long will it take to get there, and what will come down the pipeline to compete with it," Senko said.
Gabelli & Co. analyst Jeff Jonas said he likes that Keltjens has invested in clinical studies for NanoKnife, but he noted that investors will eventually become eager to see a result from all the research spending.
"When will research and development translate into sales?" Jonas said investors will be asking.
Keltjens said sales will likely initially ramp up in Europe and Asia, where the company is allowed to market NanoKnife as a cancer treatment, while U.S. sales will come with more clinical data.
"There has to be a solid body of clinical evidence for this technology to become a significant driver of revenue," Keltjens said, noting that getting studies published in peer-reviewed medical journals will be key.
Analysts note that since NanoKnife is currently on the market, some hospitals are already using it to treat tumors, while other doctors are doing their own clinical testing on the device.
So as data comes out from both company and doctors' tests, hospitals may increasingly use NanoKnife, even before the company can market it as a cancer treatment.
Beyond NanoKnife, the company sees strong growth potential in its other devices that treat cancer and varicose veins, as well as its catheters and ports, which deliver repetitive therapies into the bloodstream. But expectations are particularly strong for NanoKnife.
"It has the potential, in itself, to take the company to the next level," Keltjens said. |
