BIOMODA INC., JULY '98
Executive Summary
BioModa, Inc., is initially focused on commercializing products to improve the early diagnosis and treatment of lung cancer.
The estimated market for diagnosis of lung cancer by sputum cytology exceeds $1 billion per year in the US. Total BioModa revenues for
applications discussed in this plan are expected to exceed $230 million (1997 U.S. dollars) within 7 years (2005). In 2002, BioModa expects to
generate total revenues of nearly $80 million, with pretax profits of $25 million. The company expects to have product revenues in 1999, and be
solidly profitable in 2001. Operating expenses (excluding cost of goods sold) are projected to total nearly $16.4 million through the year 2000,
62% for product development expense and 28% for marketing and sales expense. The present business plan projects the need for a minimum
investment in excess of $9 million through the year 2000. To ensure success of the Company's full development program, follow-on investment
in a similar amount may be required between the years 2000 and 2003.
BioModa has received its seed funding and is presently seeking major first round financing, having licensed its basic patents and assembled a
strong management team that covers the disciplines of product development and operations. In addition, BioModa has obtained cooperative
development agreements with biomedical and chemical scientists at Los Alamos National Laboratory (LANL) and has established working
relationships with medical researchers at the University of New Mexico School of Medicine (UNM) and St. Mary's Hospital in Grand Junction,
CO. The LANL and St. Mary's scientists have already played critical roles in the proof of concept of this technology, and have made substantial
strides towards commercial development. The UNM clinicians are expert in the fields of epidemiology and pulmonology, and are active
participants in clinical research on the epidemiology and diagnosis of lung cancer. The Company's Scientific Advisory Board includes
recognized experts in cytopathology and lung cancer therapy (St. Mary's), and radiopharmacy (UNM).
BioModa has licensed patents covering the use of a synthetic porphyrin, TCPP, in diagnosing and treating lung cancer. For use as cytopathology
reagents, naturally fluorescent, synthetic porphyrins have significant cost advantages over antibodies and other biomolecules that must be labeled
with other molecules to be detected. For use as in vivo diagnostics or therapeutics, porphyrins have additional potential advantages over the
peptides, antibodies, and oligosaccharides which may be considered competitive technologies. Not only is production of "injection grade"
porphyrin a simpler and less costly process, but also porphyrins are small, metabolically stable, cleared from the blood slowly, and typically not
antigenic. For many decades it has been known that many cancer cells have a high affinity for some porphyrins: using radioactive copper that
naturally binds tightly to the porphyrin potentially provides a means of specifically killing cancer cells with radioactivity. Using the same
porphyrin molecule to treat lung cancer as to diagnose it would provide a uniquely powerful, integrated approach to the management of the
cancer that kills more people each year than any other.
The first products to be developed will be reagents for diagnosing lung cancer in sputum samples, as performed in a cytopathology lab. To
provide additional protection for BioModa's proprietary technology, the complex staining reagents will be specially formulated and made
available to high volume users as part of automated systems for staining microscope slides. A licensed cytopathology lab will be used primarily
as a marketing showcase, to demonstrate the efficiency of the pap smear and sputum sample diagnostic protocols. The company is currently
developing, with a potential joint venture partner, plans for the first of several regional cytopathology labs utilizing BioModa's TCPP
technology. The second generation of products will be TCPP complexed with radioactive copper, 67Cu, in two separate formulations; for
imaging and treating human lung cancer.
Primary customers for cytopathology reagents will be medium and large size pathology labs. For the in vivo diagnostics and therapeutics,
primary customers will be for-profit cancer treatment centers and the Comprehensive Cancer Centers designated by NIH. For both types of
products, the patients being diagnosed or treated will be secondary customers, although they might drive the demand for new sputum diagnostic
protocols.
BioModa intends to develop its products as follows. For cytopathology, TCPP will act as a fluorescent indicator of individual abnormal cells.
Under fluorescent conditions, abnormal cells will glow intensely against a background of normal cells. To characterize the degree of
abnormality, the cytologist need only switch the microscope to normal illumination to characterize the degree of abnormality by standard criteria.
The Company expects to automate this process, enabling standardized diagnosis of sputum sample cytopathology. Since sputum samples contain
only a low percentage of lung cells, the TCPP under fluorescent illumination will alert the cytologist to just those cells that require attention. This
would facilitate economical and effective screening of at-risk populations (particularly smokers), resulting in earlier diagnosis of disease at a
more treatable stage. Survival rates might be expected to increase from 13% to 46%, resulting in a savings of approximately 30,000 lives per
year in the U.S. alone.
The 67Cu-TCPP second generation product could provide a number of benefits, including: imaging lung cancer in vivo to facilitate decisions as
to which therapeutic modality to pursue; guiding the surgeon during surgery to cancer "hot" spots; and perhaps providing an earlier definitive
diagnosis of lung cancer in cases where sputum cytology or other radiographic techniques are inconclusive. At higher specific radioactivities,
67Cu-TCPP could be used as radiotherapy, with some assurance that if the diagnosis were made by fluorescent TCPP cytology, the cancer cells
would specifically bind the radioactive agent in vivo.
BioModa's objectives for the U.S. market for the next 5 years include: setting up a regional cytopathology lab with a joint venture partner in
1998-99; sales of bulk cytopathology reagents to major clinical lab operators in 1998-99; sales of sputum sample cytopathology reagent kits
using TCPP in 1999; sales of a turn-key, fully automated sputum cytopathology system in 1999-2000, lung cancer in vivo diagnostic approved
and sold, 2001-2002; lung cancer therapeutic approved in 2002. Due to differences in regulation of diagnostics in Europe and Asia, BioModa
may be able to begin marketing earlier there, generating revenues 6 to 12 months sooner than the projected 1999-2000 target dates for the US
markets. Through licensing agreements and/or joint ventures with international partners, BioModa expects to be receiving revenues and royalties
on cytopathology reagents in 1999, and lung cancer in vivo imaging radiochemicals in 2001.
BioModa recently received seed funding of $330,000 in equity financing. These funds are being used, in part, to support a 60 patient study of
our TCPP technology. We intend that this study will be completed by August 1998, and that the results will be of publishable quality.
To fully realize its objectives, the Company will realistically require investment of $9-$10 million from early investor/partners through the year
2000. Additional funding may be required in years 2001-2003 to finalize product development and improve the success of the products in the
marketplace. The Company intends to be listed on a major U.S. stock exchange within 5-6 years.
Contact:
Ari Ma'ayan, President
BioModa Inc.
8934 Boe Lane NE
Albuquerque, New Mexico 87113
Phone: 888-848-8594
Fax: 505-898-1429
E-mail: info@biomoda.com
IMPORTANT NOTES.
This communication shall not constitute an offer to sell or the solicitation of an offer to buy securities of BioModa Inc., nor shall there be any
sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the
securities laws of any such state.
Statements about the Company's future expectations, including future revenues and earnings, and all other statements in this document other
than historical facts are "forward looking statements" within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the
Securities Exchange Act of 1934, and as that term is defined in the Private Securities Litigation Reform Act of 1995. The Company intends that
such forward-looking statements be subject to the safe harbors created thereby. Since these statements involve risks and uncertainties and are
subject to change at any time, the Company's actual results could differ materially from expected results.
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