Last week, we alerted our subscribers about Biomoda's (OTC:BMOD)'s pending top-line results for their Phase 2 trials and we outlined their value proposition. As readers of BioMedReports know, BMOD has been on many investors radar for their innovative diagnostic test in lung-cancer which is performed in clinical reference laboratories using body-fluids. We continue to be bullish on BMOD as we anticipate positive results from the study.
While our bullishness has been based on past statements and actions from the company, we reached out to the President, CEO and Director of Biomoda, Inc., John Cousins in order to have him answer questions which were on the minds of investors. The following is a transcript of that exclusive interview:
BiomedReports: It has been a while since we first spoke to you. From a science and technology perspective, are there any developments to report?
Cousins: We have made significant progress since we last spoke. Perhaps the most important news for investors and cancer research overall is that we are completing our pilot study of Biomoda’s diagnostic assay for the early detection of lung cancer. Our pilot study, which is similar to the Phase II clinical studies required for new drugs, is the basis for moving forward with a pivotal study -- the third and final phase of clinical study that leads to Food and Drug Administration (FDA) approval and commercialization. We are seeking FDA approval of our CyPath® assay as a Class III medical device. The requirements are quite rigorous. The results of our pilot study have not been announced, but we have stated our belief that the results will be statistically significant enough to move into a pivotal study. We are beginning work on the pivotal clinical study, including responding to questions from the FDA about the pilot study protocol and design, hiring a Clinical Research Organization (CRO) and establishing key collaborations that we will be announcing soon. We will continue research and development to optimize our assay, incorporating improvements such as automation that will lead to larger scale use at lower cost.
The pilot study analyzes samples from about 170 individuals including military veterans at high risk for cancer and individuals who have been diagnosed with cancer but had not yet begun treatment. I know you and others are very interested in knowing the ‘top-line’ results and summary data, and of course we will share those results when they are ready for release. Right now most important for us at Biomoda, and for our experts working on all phases of the clinical study, is the assurance that we have thoroughly analyzed the data and developed the most accurate assay possible. We want to provide an accurate picture of our assay and its performance. A rush to announce results might lead to increased funding opportunities in the immediate future and a short-term pop in the stock, but it can also lead to problems later on, when end points for the pivotal study are not met because the study data from the pilot study wasn’t sufficiently analyzed or the assay was not fully optimized based on lessons learned from
the pivotal study. We will not make those mistakes.
It’s worth mentioning that the Board of Directors elected Maria Zannes as Chairman of the Board. Maria has been the executive overseeing our pilot clinical trial and will continue to provide oversight throughout the pivotal trial. She’s working closely with Connie Dorian, our Vice President of Operations, in development of the assay and conduct of the clinical trials. They are a great team. Connie is an excellent clinical researcher, very detail oriented, and Maria provides a steady, long-term, focused and strategic vision as we move forward.
BiomedReports: Are Phase 2 results still coming this quarter?
Cousins: Biomoda chose one of the toughest cancers when we decided to develop our assay for the detection of lung cancer. We believe the assay platform will be applicable for many cancers. We are nearing completion of the pilot clinical study data analysis and preparing for publication of the results.
We expect results of the pilot clinical study will be sufficient to launch the pivotal trial. We are designing the pivotal study on the foundation of the pilot study and adherence to the FDA’s rigorous requirements. We have a number of steps to complete before the pivotal can begin, including submission of a Pre-IDE to the FDA, the Agency’s response and, if necessary our follow-up to FDA comments. Our pivotal study will be a multi-state, multi-site study. It’s no surprise to anyone who follows our company that we are looking at Ohio and Nebraska as potential sites, and we intend to investigate sites and funding in Texas. I think researchers in those states are awaiting results of our pilot study.
BiomedReports: How is the development of Phase 3 registration coming along? When do you expect to enroll patients? Any developments on money to fund the trial via Nebraska or Ohio?
Cousins: New Mexico provided an excellent model for funding. Biomoda is headquartered in a progressive state for research. We have two national laboratories that conduct impressive research, and, in fact, Biomoda’s technology began at Los Alamos National Laboratory. Our legislature has been very supportive of our veterans who participated in the pilot study. There are other states, including Ohio and Nebraska that have shown an interest in the potential of our technology and are waiting for results of the pilot study. We have established contacts in both states and will be sharing our information with them. Ohio, in particular, has the Third Frontier Initiative established to fund the type of research and development Biomoda is proposing, so we are hopeful we’ll be working in the Buckeye State as well as Nebraska.
I’ve already discussed a bit of the work to be done as part of the pivotal study. This will be a large study, and patient enrollment will take place after FDA review and approval by an independent Review Board (IRB) of our protocol. We’ll be selecting sites at the same time and setting up participant enrollment and sample collection. We intend to advertise for the study, so those interested in the study will have an opportunity to participate. If individuals are interested in enrolling in the pivotal, they can sign up now on our web site, www.biomoda.com, and we will contact them when we begin to interview potential participants to determine if they meet the criteria for study enrollment.
BiomedReports: When do you expect to file for CE mark?
Cousins: We are securing necessary patents in the European Union to protect our intellectual property and trademarks, and we are studying the European market to determine the best countries to target initially. It is arguably easier and quicker in Europe to commercialize a medical device, but that’s not all there is to success. Understanding the European market means making some strategic decisions on the most efficient path to market, making sure there is a fit within national healthcare systems and/or reimbursement codes for each country, knowing the details of your competition and setting an attractive price point -- all work that will be underway shortly.
BiomedReports: Do you have a manufacturing facility for CyPath®?
Cousins: There are several readily available manufacturers for TCPP, the compound that comprises CyPath®, so we don’t see any obstacle to its manufacture. The amount of TCPP necessary for the assay is small, and a little goes a long way. The issue is not manufacturing, but rather making sure we have the certified laboratories to support sales. Our requirement for CLIA-certified laboratories, trained researchers and qualified technicians leads us not only to New Mexico, but also to Ohio, Nebraska and other states that have strong medical/biotech communities and economic development programs focused on creating high-paying jobs.
BiomedReports: What does the current financial situation look like?
Cousins: Small public companies often walk a fine line between securing financing sufficient for
operations without “giving away the store,” so to speak. We look for opportunities with value investors who understand the medical market and are committed to Biomoda’s success. We expect increased value will provide more opportunities to access the capital markets. And we are very lucky to have shareholders who are committed to the company and understand long-term investment.
BiomedReports: What are your short- and long-term plans moving forward?
Cousins: Completion and publication of the pilot study is the most immediate short-term goal, setting a foundation for our mid-term goal of launching a pivotal study. At the same time, we will be investigating CyPath’s use as a diagnostic for other cancers to develop a portfolio of assays that ultimately will lead to a diversified revenue stream. I mentioned our work in Europe, as well as our expansion into other states that will be coordinated with the work on our pivotal study. I expect that once our pivotal study has begun, there will be increased emphasis on penetrating the medical market, and perhaps identifying suitable strategic partnerships and other opportunities.
BiomedReports: What are your biggest challenges as a company at this point?
Cousins: Interestingly, I would say managing expectations is a big challenge for any small public company. It is particularly more challenging when you are working in the medical field where there is significant promise and more than a bit of uncertainty in conducting clinical trials. For example, we had expected that enrolling patients in the current pilot trial could be accomplished in a much shorter timeframe than it actually took to enroll and close out the study. This led to expectations we could not meet, despite a very well-run study and robust data set.
BiomedReports: You offer an interesting value proposition for investors. Can you talk about that?
Cousins: We currently have a market cap of less than $20 million. Analysts have pointed to comparable companies with a market value well over $100 million. I think we have a terrific company with a strong in-house team and an experienced medical advisory and consulting team along with truly promising technology. We are on a path to prove that our technology can help people live longer, fuller lives, and when we do, the market will respond favorably. As an analyst, you can compare Biomoda to other biotech R&D companies in similar stages of development, and I think the analysis would show Biomoda is undervalued.
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