While most of our lives are touched by it, we all know progress in fighting cancer is frustratingly slow. Worldwide, there are 386,000 new cases of bladder cancer diagnosed annually. Yet the standard of care has remained unchanged more than a decade and a half, and no new drugs have been approved for the disease since the late-nineties.
Toronto’s Theralase (TSXV:TLT) was founded in 1995 and has seen success in using laser therapy to treat conditions such as rotator cuff tears, carpal tunnel syndrome, and psoriasis. But could the use of therapeutic lasers offer hope in the treatment of certain cancers?
CEO Roger White says the company’s Photo Dynamic Compounds have the potential to be a game changer and disruptive in the war against cancer because they work by destroying only the cancerous tissue and leaving healthy tissue intact. Recently, Cantech Letter caught up with White to talk about 2014 and beyond.
Roger, why it has taken 20 years to produce only $1.5 to $2-million in revenue in laser sales? Lack of money, personnel or some other reasons?
Theralase was launched in 1995, but took 5 years to develop the TLC-1000 therapeutic laser system for the North American market. Health Canada approval of the TLC-1000 was achieved in 2002 and FDA approval in 2005. Since regulatory approval, our sales have grown to approximately $2-million, predominately in Canada. The Company entered the US market in 2008, just as the US was in a death spiral and we quickly retreated back to Canada. We re-entered the US Market in 2011 with a sales and marketing team, but lacked sufficient capital and personnel to significantly increase sales. Theralase minimized its capital spend in the US market as a result and decided to focus on Canadian sales in the interim, consistently producing $1.5-million to $2-million in sales annually. We are now gearing up to re-enter the US market with the necessary capital and personnel required to establish a solid footprint there and establish the Canadian and US sales and marketing platform with which to launch the patented next generation TLC-2000 therapeutic laser technology.
Can you explain how the TLC-2000 technology works, what are the benefits and why it is considered a disruptive technology?
All therapeutic lasers in the world today are known as “open loop” systems; whereby, the practitioner sets the power and time of the system and treats a patient. There is no ability to know if the therapeutic laser system delivered the correct dose of energy to the injured tissue, undertreated or overtreated the tissue. The First Law of Photochemistry states that, “Light must be absorbed for photochemistry to occur” or alternatively “Light of the correct wavelength must reach the tissue of interest to perform photochemistry”. Extrapolated, this law states that if you undertreat or overtreat a volume of tissue, you will achieve less effective results than possible. Therefore, the delivery of light to tissue is a biphasic effect, in other words “light is a drug”, too little light and you will get minimal results (same as for pharmaceutical drugs), too much light and you will bioinhibit the tissue and again achieve minimal or negative effects (same as with pharmaceutical drugs). Therefore, you must deliver the exact dose of light at the tissue surface based on the depth of the patient’s condition and their physical characteristics (skin colouration, amount of subcutaneous fat, amount of muscle fiber, amount of connective tissue and amount of bone) to deliver the exact optimized dose of energy at tissue depth, as light attenuates as it passes through the different strata of tissue. The TLC-2000 is a patented biofeedback therapeutic laser system that is able to accomplish just this. It automatically determines the depth of a patient’s condition based on the practitioner’s diagnosis and the patient’s physical characteristics and then proceeds to deliver that exact dose of energy to that tissue each and every time and discontinuing treatment when the desired dose at tissue depth has been achieved. In other words, a perfect therapeutic laser treatment, where the TLC-2000 fulfills the first law of photochemistry exactly, taking into account the depth of a patient’s condition and their physical attributes providing the highest efficacy achievable with a therapeutic laser system. Clearly, a disruptive technology.
When presented with the scientific and clinical rigour of the benefits and attributes of the TLC-2000 to their practice versus their current technology, most potential customers, being highly educated healthcare practitioners would make the logical decision to upgrade their existing technology to the new technology
Why will this displace all other competitive devices?
By providing a next generation therapeutic laser technology which can automatically determine the depth of a patient’s condition, adjust automatically to a patient’s physical characteristics and deliver an exact dose of energy at a specified depth in tissue and then automatically discontinue treatment, this new technology precisely fulfills the first law of photochemistry and, according to scientific and clinical data, is able to deliver the most effective therapeutic laser treatment available. When presented with the scientific and clinical rigour of the benefits and attributes of the TLC-2000 to their practice versus their current technology, most potential customers, being highly educated healthcare practitioners would make the logical decision to upgrade their existing technology to the new technology or at a minimum invest in the new technology in addition to their current technology.
Can you explain why your PDCs are safer and more effective than other FDA approved Photo Dynamic Compounds?
The Theralase PDCs are safer and more effective than other FDA approved Photo Dynamic Compounds for a number of reasons. First, they are small molecule targeted drugs that are able to localize to the nucleus of a cancer cell. Most targeted drugs today are either small molecule drugs or what is known as monoclonal antibodies. Small molecule drugs diffuse into cells and can act on targets that are found inside the cell. Monoclonal antibodies cannot penetrate the cell’s plasma membrane and are directed against targets that are on the cell surface. Because the Theralase PDCs are small molecules they can enter any cancer cell and are not as limited in scope as monoclonal antibodies, which require a specific marker or protein sequence on the outside of the cell to localize. The two current FDA approved drugs (Aminolevulinic Acid HCL (5-ALA) and Photofrin®) are also small molecules, but their target is the mitochondria of the cell. The number of mitochondria in a cell varies widely by organism and tissue type, with some cells having only a single mitochondrion and others having several thousand mitochondria. Because cancer cells may have multiple mitochondria versus one nucleus a much greater amount of PDC would be required to destroy the cell versus the Theralase PDCs; hence the toxicity of the Theralase PDCs would be substantially reduced and the efficacy significantly enhanced over ALA and Photofrin®.
What are some of the other reasons?
Unlike ALA and Photofrin ®, the Theralase PDCs have the ability to work in low oxygen atmospheres (hypoxia), allowing them to be effective for solid core hypoxic tumours, such as brain, breast, prostate, lung and bladder. The Theralase PDCs have the unique ability to work in both oxygenated tissues (normoxia) and low oxygenated tissues (hypoxia), encompassing all cancer types, possessing both a Type 1 (oxygen independent) and Type 2 (oxygen dependent) photodynamic process. The third reason would be that, in direct comparison to ALA and Photofrin®, the Theralase PDCs have proven to be 668,000 times more effective than ALA and 198 times more effective than Photofrin® in-vitro studies.Using our lead indication of bladder cancer, the Theralase PDCs only remain in the bladder for less than an hour and never enter the blood stream, providing a very high safety profile and ultra-low toxicity versus ALA and Photofrin® which are injected in the blood stream. The Theralase PDCs have shown up to a 100% kill in cancer cells at very low concentrations (< 0.8µM) when light activated and virtually 0% when not light activated even at high concentrations (> 100µM) leading to a very high safety profile.
Are there any side effects?
No side effects were observed from treatment due to the quick evacuation of the Theralase PDC from healthy cells and the high light fluence required for activation, providing an extremely high safety profile, excellent specificity, and selectivity to cancer cells. Another benefit is that the Theralase PDCs are water soluble, allowing them to readily penetrate a cellular membrane as a small molecule and localize to the DNA of a cell. Another benfefit: the Theralase PDCs are lethal to cancer and bacteria, essential to the destruction of bladder cancer, as recent research suggests than excessive bacteria present in the bladder may be a partial root cause of bladder cancer. The Theralase PDCs are able to be activated at long wavelengths allowing for deeper tumour destruction
Bladder cancer is a devastating disease that costs the American medical system $3.9 billion annually (2012 statistics). There are a reported 70,000 new cases per year with 15,000 deaths attributed to the disease.
Why is there a need to develop better treatments for bladder cancer?
Bladder cancer is a devastating disease that costs the American medical system $3.9 billion annually (2012 statistics). There are a reported 70,000 new cases per year with 15,000 deaths attributed to the disease. Worldwide, there are 386,000 new cases diagnosed annually, with a high prevalence of the disease reported in developing countries, especially countries with high smoking rates and spicy diets. The standard of care has remained unchanged over the last 16 years, with no new drugs approved for the disease since 1998. It is the 5th most common cancer in the world, 4th most common in men and 8th most common in women. It has the distinction of being known as the most expensive cancer to treat costing patients $100,000 to $200,000. It has a high recurrence rate of up to 80%. 70% of all new bladder cancer cases are diagnosed as early stage disease with 90% of bladder cancers being Transitional Cell Carcinomas (TCCs). There is clearly a need to develop better treatments for bladder cancer because of the unacceptably high recurrence rate and lack of treatment progress in the disease for the last 16 years.
What is he current standard of care for bladder cancer?
In the early stage disease (Ta, T1), there is a Trans Urethral Resection of the Bladder Tumour (TURBT, which is a surgical scraping of the tumour off the walls of the bladder) followed by treatment with bacillus Calmette-Guérin (BCG, a bacteria originally used for tuberculosis) with a 5 year survival rate of 75%. In the mid-stage (T2, T3a/b), the entire bladder is removed along with nearby reproductive organs and lymph nodes in a procedure called a radical cystectomy with a 5 year survival rate of 31 to 63% depending on progression of disease. And in the late stage of bladder cancer (T4), the disease has spread to distant sites, such as the bones, liver and lungs and is generally regarded as incurable with a 5 year survival rate of 21%.
If Theralase is granted “breakthrough status”, then the FDA works hand-in-hand with the Company to commercialize the technology as soon as possible. In this scenario, Theralase could commercialize its anti-cancer technology as soon as early 2016. If “breakthrough status” was not granted, the Company would still qualify for “fast-track” status, which would allow the company accelerated approval status.
Why is your anti-cancer technology considered disruptive?
The standard of care for all types of cancer focuses around three main disciplines: surgery, where the objective is to remove the cancerous tissue and any tissue surrounding it, radiation therapy, where the objective is to destroy the cancerous tumour with ionizing radiation and finally chemotherapy, where the objective is to destroy the cancerous tumour with cytotoxic (cell killing) drugs. The Theralase PDC anti-cancer technology is disruptive in that all three of the aforementioned therapies have serious side effects that can dramatically affect the quality of life of a patient and diminish the effectiveness of the immune system, the very system that helps the body combat disease. The Theralase PDCs have no serious side effects, do not affect quality of life and do not affect the immune system. The Theralase PDCs work by destroying only the cancerous tissue and leaving healthy tissue intact. This is why the Theralase anti-cancer technology can be a game changer and disruptive in the war against cancer.
When do you anticipate clinical results of your Phase1/2a bladder cancer studies?
A phase 1/2a clinical study in bladder cancer in 30 subjects (15 in Canada and 15 in the US) is expected to commence in Q1,2015. With an anticipated strong enrollment rate on both sides of the border, treatment times of less than ½ day and a twelve week follow-up, final data should be compiled and ready for submission to the FDA by Q4,2015. After FDA approval, the clinical data would be made public.
When do you anticipate commercialization of your cancer compounds? What do you anticipate in annual sales?
After submission and FDA approval of a Phase 1/2a clinical trial, the Company has the ability to apply to the FDA for “breakthrough status”. If Theralase is granted “breakthrough status”, then the FDA works hand-in-hand with the Company to commercialize the technology as soon as possible. In this scenario, Theralase could commercialize its anti-cancer technology as soon as early 2016. If “breakthrough status” was not granted, the Company would still qualify for “fast-track” status, which would allow the company accelerated approval status. With “fast track” approval the Company would most likely complete a Phase 2b clinical study in bladder cancer, which would allow the Company to commercialize its technology in 2017.
Annual sales would ramp immediately after commercialization, but assuming a treatment cost of $50,000 per patient with 1000 patients treated annually at each of 50 facilities, gross revenue from the procedures would total $2.5-billion. If Theralase was paid 50% of the gross revenue for the PDC and the laser system used to activate it, the Company’s gross revenues after a two to three year ramp could potentially be $1.25-billion per year.
What are your chances of getting Fast Track approval from the FDA? What about Breakthrough Status?
Fast Track and Breakthrough Status are defined by the FDA as “a process designed to facilitate the development, and expedite the review of drugs to treat serious conditions (such as cancer) and fill an unmet medical need (no therapy exists or by providing a therapy which may be potentially better than available therapy).” Breakthrough Therapy designation is a process designed to expedite the development and review of drugs that are intended to treat a serious condition (cancer) and preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over available therapy on a clinically significant endpoint(s). (Phase 1/2a clinical data). Based on these definitions, Theralase has a 99% chance of achieving Fast Track Status and after completion of a successful Phase 1/2a clinical trial over a 90% chance of achieving Breakthrough Status.
We are completing our preclinical work at Princess Margaret Cancer Centre and plan to use Princess Margaret as the lead Canadian site for the Phase 1/2a clinical trial.
Have you tested your four key compounds you developed over last 10 years in other cancers. If so, what were the results?
We have completed testing our four lead PDCs on a variety of cancers, such as brain, breast, colon, prostate, pancreatic and lung, in addition to bladder cancer, both in in-vitro models (Petri dish of cells) and small animal in-vivo models all with up to 100% cancer kill and virtually 0% toxicity.
Why has it has taken 10 years to develop these special cancer compounds?
As with all things, I believe it takes 10 years of hard work to create an overnight success. Theralase in-licenced these PDCs ten years ago and has reviewed and tested thousands of PDCs to arrive at these four lead PDCs. The synthesis of the PDCs at the university level coupled with the in-vitro and in-vivo testing of the drugs at Princess Margaret Cancer Centre has cost millions of dollars and taken years of research to complete. Given significantly more resources in capital and personnel, the Company could have cut this timeline in half.
How confident are you about your scientific and clinical teams that are developing the next generation cancer treatment?
The Theralase scientific, clinical and engineering teams involved in the next generation cancer treatment are highly qualified and considered experts in their respective fields. Arkady Mandel, MD, PhD, DSc is the Chief Scientific Officer at Theralase is what is known as a triple doctor, is in charge of the anti-cancer technology project and is an expert in the field of laser light activation of biological tissue at the molecular, cellular and tissue level. He is also a trained immunologist by background. Lothar Lilge is a PhD and is a professor in the Department of Medical Biophysics at the University of Toronto and a senior scientist at the Ontario Cancer Institute of Princess Margaret Cancer Centre, University Health Network. He is considered as one of the top ten research scientists in the field of Photo Dynamic Therapy (PDT). Dr. Lilge is the scientific principal investigator for the anti-cancer technology project. Michael Jewett MD is a Professor of Surgery (Urology) at University of Toronto and a Surgical Oncology member at Princess Margaret Cancer Centre. Dr. Jewett was the Chairman of the Division of Urology at the University of Toronto and Head of Urology at the University Health Network which incorporates the Princess Margaret Hospital from 1991 to 2002 and is considered one of the finest uro-oncologists in Canada. Dr. Jewett is the clinical principal investigator for the anti-cancer technology project.
How does mice data translate to human data?
If you are investigating monoclonal antibodies, then I believe that mouse data would not translate well to human data as different mammalian cells (mouse versus human, for example) would have different markers on the cancer cell surface. However, if you are investigating small molecules that enter a cancer cell, then I believe that mouse data would translate extremely well to human data in the sense that all eurkaryotes (mammalian cells) have almost identical cells and associated organelles, except for minor differences in DNA coding attributable to variations in species.Therefore, the strong and successful pre-clinical data collected by Theralase on mouse data should translate extremely well to human clinical testing.
Theralase completed a $3.15-million, oversubscribed private placement on November 7, 2013. Associated with that private placement, were 21-million full warrants priced at $0.20 each with a two year exercise period. Theralase plans to work with the initial investors to have them exercise their warrants in the next 90 to 120 days to allow the Company access to the $4.2-million their exercise would bring.
What proof do you have that your cancer therapy will work in humans?
None, as it has never been testing in a human clinical model; however, based on the nuclear acting small molecule PDCs that Theralase has patented, all indications support the hypothesis that it will work as effectively in humans as it has on mice.
Which institutions are you going to use to complete your clinical trials?
We are completing our preclinical work at Princess Margaret Cancer Centre and plan to use Princess Margaret as the lead Canadian site for the Phase 1/2a clinical trial. The other clinical site will be a US institution and has yet to be identified, but all indications are pointing towards one of the largest cancer centers in the world.
What are your financing needs?
Theralase completed a $3.15-million, oversubscribed private placement on November 7, 2013. Associated with that private placement, were 21-million full warrants priced at $0.20 each with a two year exercise period. Theralase plans to work with the initial investors to have them exercise their warrants in the next 90 to 120 days to allow the Company access to the $4.2-million their exercise would bring. We are also working at completing a $10 to $20 Million private placement financing round in late Q3,2014, or early in the fourth quarter of 2014 to allow the Company sufficient funds to complete the Phase 1/2a clinical study in bladder cancer in 1Q2015.
How confident are you about your scientific, clinical and engineering teams that are developing the next generation laser?
Extremely confident. Wayne Embree, our VP of Engineering, has 38 years of experience in designing and managing engineering design teams in the development of complex electronic devices and commercializing the technology. Arkady Mandel, MD, PhD, DSc is the Chief Scientific Officer at Theralase is what is known as a triple doctor, is in charge of the anti-cancer technology project and is an expert in the field of laser light activation of biological tissue at the molecular, cellular and tissue level. He is also a trained immunologist by background. James Andrews MD, Jeffrey Dugas MD and Lyle Cain MD are all top sports orthopedic surgeons in the US and members of both the American Sports Medicine Institute, American Academy of Orthopedic Surgeons and American Orthopedic Society for Sports Medicine. Dr. Andrews, Dr. Dugas and Dr. Cain will be instrumental in designing and conducting a clinical study into the efficacy of the Theralase TLC-2000 technology in the US. Kevin Wilk DPT is a member of the American Physical Therapy Association and the American Sports Medicine Institute and will be instrumental in the design of clinical protocols using the TLC-2000 therapeutic laser.
When do you plan to launch the TLC-2000 therapeutic laser?
In the fourth quarter of 2014.
What plans do you have to expand the therapeutic laser business in the US and Canada?
Hiring of a top notch sales and marketing team in addition to our current team to grow the Theralase brand to the leading therapeutic laser brand in North America
What is the business model that you are using to launch the TLC-2000?
The TLC-2000 will be sold as a recurring revenue model; whereby, the practitioner will be charged $99 + tax for 6 months allows an opportunity for the practitioner to integrate the new TLC-2000 technology into their practice, then $500 + tax per month for an additional 36 months. The lease agreement is emblazoned with the Theralase name and logo at the top, but it is actually a lease agreement from either a top Canadian or US medical device leasing company depending on which country the product is being leased. Once executed by the customer and approved by the lease company, the lease company now owns the Theralase TLC-2000 product and leases it to the customer in exchange stream of payments. This stream of payments would have a net present value of approximately $16,500, which would be paid to Theralase at the time of lease commencement. If the customer defaults on the payment stream, the lease company would enforce their contractual rights to ensure payment including legal remedies and removal of the equipment. Because of the control of the TLC-2000 through a tablet computer and the internet, Theralase has the ability to disable the technology remotely, as required, on our own behalf or on the behalf of the lease company. For the term of the lease, the customer is contractually locked into the stream of payments with the lease company which would enforce their legal rights if the payment stream is not received in a timely manner.
At the end of the term of the 42 months lease, what are the customers options?
They can continue to pay at $500 + taxes per month and receive unlimited warranty, ongoing marketing in the form of direct and indirect patient marketing and promotion of their clinic though all of our website and media channels. If we have done our job correctly doing the 42 months, there will be a high number of customers who stay with the program. We are estimating 80%, as most of our customers generate in excess of $10,000 a month with our technology, a 2000% annual return. They can discontinue use of the product and return it to the Company to receive their equipment deposit fee of $500. If they refuse to return the product or refuse to pay for its use, the Company would simply disable the TLC-2000 remotely rendering it unusable. The customer can also Commence a new 42 month lease, on the 2018 model of the TLC-2000 and commence a stream of payments to the lease company again. If the customer does not renew the lease, then the product would need to be returned to the Company in exchange for an equipment deposit fee equal to one month’s lease payment of $500. If the product was not returned by the customer for whatever reason, then the Company would disable its use and the customer would forego their equipment deposit.
What does Theralase’s near-term future look like?
We want to launch and commercialize the TLC-2000 in Q4,2014 in Canada and the US. We also want to complete preclinical work for the anti-cancer technology in the same time frame. Then in the first quarter of 2015, we want to commence Phase 1/2a bladder cancer clinical trial. In the second quarter of that year we want to launch and commercialize the TLC-2000 internationally. In the fourth quarter of 2015, we want to complete Phase 1/2a bladder cancer clinical trial. We want to reach commercialization of the anti-cancer technology in 2016 and the same year commence work on a new cancer condition.
Disclosure: Theralase is an annual sponsor of Cantech Letter.