This week, we have a question from reader Alexander B., who says he has been following Guided Therapeutics, Inc (GTHP.PK) for a few weeks now.
Alexander B. writes:
"This company looks like a good play as they have developed a painless cervical cancer screening technique. They will be releasing data at the end of march on theirpivotal FDA trial. I was wondering what the staff at BMR thought about this company?"
We tapped Joseph Krueger, the newest member of our team who holds a Ph.D in Cancer Biology and performed post doctoral studies at the Scripps Research Institute and UC San Diego. Since he has 10-15 peer reviewed publications in the cancer field and have received multiple competitive grants for his scientific research, we thought he might best qualified to share some of his own opinions about GTHP.
I have come accross this one many times, and turned away from it, frankly.
The big turn off for me as an investor is the balance sheet: no cash, $8MM in debt, convertible stock and notes and no income.
They make an imaging device for cervical cancer detection which uses fluorescence and reflectance to get an image of the cervix. This image includes the detection of metabolites in the tissue which suggest cancer as well as the topography of the cervix. With the imaging device, they use a computer algorithm to decide if there are cancerous
or precancerous lesions.
The PAP smear, which looks for cancer cells samples from a cerivcal scraping under the microscope, detects cervical cancer about 70% of the time. The GTHP device detected cervical cancer 97% of the time. However, their device was only specific 70% of the time, meaning it gave false positives 30% of the time. This is a similar rate as the
Testing for human papilloma virus (HPV) along with the PAP smear increases the sensitivity of detection to 95% (similar to the GTHP device). But this method is specific only 30% of the time (lots of false positives).
So the device probably works well, no side effects, but doesnt really offer any significant advantage over the current methods, because this is a screening device, not a diagnosis device. Any postive test would have to be followed by a biopsy and diagnosis from a pathologist. The device does offer less false positives, but PAP smears and HPV tests
are inexpensive, and equally sensitive (but not specific), already in place and approved by health insurance. It would take a paradigm shift as a well as the purchase of expensive equipment to implement the GTHP system.
Catalyst: They are going to report the trial results (for FDA PMA approval) at the American Society for Colposcopy and Cervical Pathology biennial meeting, March 24 – 27, 2010, in Las Vegas. The results will probably show it to be as sensitive and more specific as in published reports.
The overall objective of the clinical study was to "evaluate whether fluorescence and reflectance spectroscopy can improve the ability to detect the presence of premalignant lesions on the cervix.": To "determine the efficacy of the device, within the context of current ASCCP guidelines, to more effectively triage women with ASC/LSIL results, women with positive HPV results and women being followed for previous cervical dysplasia."
In other words, they are comparing the PAP smear/HPV test combo standard to the device. Based on the published data above, they may not meet the goal of improvement, just equivalency (both methods have a 95% sensitivity), so it- in my own opinion- may not get FDA approval.
As always, do your own DD.
Disclosure: No Positions
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