Bioprognos

MainImage

298,800.28€

Out of 300,000.00€

investors

61

Est. ROI

767%

days left

--

TOTAL ACHIEVED CAPITAL: 319.200,29 € (investments above 100% will be also recorded but not published in the list).

Finish date: 31/07/2016 Barcelona

Premoney valuation

6,000,000.00€

Percentage offered

4.76%

Est. ROI

767%

Exit horizon

2019

The project

Bioprognos is a biotech company that seeks to improve clinical outcomes and quality of life for cancer ―as well as other conditions patients (with cardiovascular, neurological or endocrine disorders)―, by developing innovative, non-invasive, accurate, and cost-effective screening, diagnosis, prognosis and monitoring solutions that give patients, doctors and payers the information they need from biomarkers found in a simple blood test (as well as urine and other body fluids).

Business opportunity

Cancer

Despite advances, Cancer currently remains the second leading cause of death in developed countries.

 

Lung Cancer

Lung Cancer is the leading cause of cancer death in China (with more than 670,000 deaths/year), the United States (over 182,000 deaths/year), and most industrialized countries (with more than 368,000 deaths/year in Europe), which means more deaths than Breast, Prostate, Colorectal, Liver, Kidney and Skin Cancer combined.

 

When Lung Cancer is detected early, 54% of patients survive for 5 years or more, but because this type of cancer shows no early symptoms, it is usually detected it has already spread and the chances of survival are slim

 

Lung Cancer Diagnosis

Currently, doctors consider the patients' age and smoking habits the two main factors to model the risk of Lung Cancer. For diagnosis, a system based on a computerized tomography (CT) ―a test with a high cost that sometimes detected benign nodules as potentially cancerous― is usually recommended. Approximately 28 percent of high-risk individuals who are subjected to CT scans obtained a positive finding, since the test often identifies all existing pulmonary nodules.

However, 97 percent of lung nodules are not cancer, and 25 percent of suspicious nodules are benign, meaning that 1 of 4 individuals with nodule and suspicion of cancer is not).

An analysis of cost/effectiveness published on November 6, 2014 in the New England Journal of Medicine estimated that the costs of a computed tomography were $1,631 per person and $ 81,000 per year of life gained adjusted for quality.

The total market for lung cancer diagnosis represents 1.5 billion dollars in the US, 5 billion dollar in China and 3 billion US dollar in the rest of the world (with a predicted reach 15.9 billion US dollar for 2020).

Biomarkers

Tumor markers are parameters released by tumor cells, which enter the bloodstream or other biological fluids and are useful for the diagnosis, prognosis and treatment monitoring.

There are now more than 20 parameters that are widely regarded as tumor markers or biomarkers such as PSA ―used in Prostate Cancer―, the CA 15.3 ―used in Breast Cancer―, the CA 125 and HE4 ―used both in Ovarian Cancer―, CEA and CA 19.9 ―used both in different gastrointestinal cancers (Colorectal, Gastric and Pancreatic Cancer)―, or NSE and ProGRP ―used both in Lung Cancer―.

Statistical measurements in diagnostic tests

Unfortunately, the use of biomarkers in routine presents some problems such as low sensitivity in early stages, or nonexistence of any specific tumor marker for each malignant tumor. However, the combination of 2 or more tumor markers has a high sensitivity, especially in advanced stages.

In this regard, the combination of several biomarkers ―as well as the inclusion of patient history information in the equations―, using complex algorithms with multiple variables, resulting in a ratio sensitivity/specificity higher: that is what we have named Multi-Biomarker Disease Activity Algorithm (MBDAA).

MBDAA Test for Lung Cancer

The logic behind the development of the MBDAA Test for Lung Cancer was to design a noninvasive test, based on a simple blood sample, that would identify high-risk patients who could benefit from evidence-based scans are computed for early detection Lung Cancer.

Our MBDAA Test for Lung Cancer is not intended to replace tests based on LDCT, is a tool that physicians can use before exploring patients with LDCT and as the American Thoracic Society (ATS) confirmed, our algorithm has been proven valid for diagnosis of Lung Cancer. Several companies around the world (including Roche and Abbott) have contacted us requesting licenses for the commercialization of our MBDAA Test for Cancer Lung.

At present, our MBDAA Test for Lung Cancer offers a ratio of sensitivity/specificity of over 90%/98%, so our algorithm is the best current clinical option for diagnosis of Lung Cancer. By way of comparison: the PSA test (for prostate cancer) provides a ratio sensitivity/specificity close to 52%/72%.

When compared with the ROC curve test PAULA ―developed by the American company 20/20 GeneSystems (of which we have an offer on the table to license exclusively of our MBDAA Test for Lung Cancer for Canada, United States and Mexico)―, and is currently marketed in the United States at a price of US$ 150 per patient, it is also noticeably better:

In addition, recent work ―still unpublished―, have allowed us to increase the sensitivity/specificity ratio and differentiate between the two histological types of Lung Cancer: Non-Small Cell Lung Cancer (NSCLC) type and Small Cell Lung Cancer (SCLC) type and histologic subtype for cases (NSCLC), differentiating between adenocarcinoma and squamous, by introducing new calculations in our algorithm. This is highly important to select the best therapeutical options for each patient. 

Our MBDAA Test for Lung Cancer is priced at 50 €, significantly less than the amount of the cost of a LDCT and other follow-up interventions such as biopsies or other tests of diagnostic imaging, so we can say categorically that said test ―used as a tool for screening, diagnosis, prognosis and treatment monitoring, and performed before a LDCT―, allows, on the one hand, reducing the rate of false positives (FP) in the absence of Lung Cancer, and on the other, it will be advantageous in terms of reducing hospitalization costs, radiation exposure and psychological stress for patients.

Final Report

Once the doctor entered the patient data, our MBDAA Test for Lung Cancer presents the results as a PDF―document report that can be downloaded or sent by email― format. This report includes all patient data and risk assessment calculated from these data. It also includes a series of comments that are created dynamically based on entered patient data, such as levels of blood markers that would suspect the presence of cancer, but to consider other variables (such as sex, race, morbidities or smoking habits), do not correspond with malignant diseases.

Finally, a recommendation suggesting that steps should be taken then so when retested to track patient is included.

Cost/Effectiveness Study

Our MBDAA Test for Lung Cancer is priced at 50 €, significantly less than the cost of a CT scan and other follow-up interventions such as biopsies or other tests of diagnostic imaging.

This allows us to state categorically that our algorithm ―used as a tool for screening, diagnosis, prognosis and treatment monitoring (performed before or in addition to a computerized tomography)―, grant, on the one hand, reducing the rate of false positive (FP) in the absence of Lung Cancer, and secondly, it will be advantageous in terms of reducing hospitalization costs (for both patients and third party payers), radiation exposure and psychological stress for patients, as a preliminar Health Economics and Outcomes Research (HEOR) study has demonstrated.

In addition, we are working with different health insurance companies and mutuals that incorporate our MBDAA Test for Lung Cancer among its services.

Other developments

Although the data presented so far refers only to our MBDAA Test for Lung Cancer we are also actively working on the development of other algorithms for a variety of cancers.

In this sense we expect that two of them (the MBDAA for the differential diagnosis of Paraneoplastic Syndrome/Cancer of Unknown Primary as well as the MBDAA for Ovarian Cancer) will be ready during the second quarter of 2016.

Investment & Exit

Financial Needs

Having 3 algorithms ready to market, the financial needs of the company will focus on hiring the necessary manpower to initiate the commercialization phase. We are seeking 300,000 € to cover the costs of a serie of actions (both marketing and sales support), aimed at achieving agreements with end customers (medical centers, governments, pharmaceutical companies, etc).

Defined actions are:

-       Parallel events in the events that Dr. Molina attends as a speaker or in those belonging to the organizing committee.

-       Fairs and events dedicated to Tumor Markers, oncology overall, as well as those focused on Lung or Ovarian Cancer, where we will also seek to have strong presence, either through posters, stands, etc.

-       Commercial Tours conducted jointly with various institutions as already planned with Roche Diagnostics, Abbott Laboratories and Siemens Fujirebio.

Liquidity Strategies/Shareholders Exit

There are three ways in which shareholders could obtain liquidity on their investment, in order of probability: (1) acquisition, (2) public offerings of sales (IPOs), and (3) pay dividends or repurchase of shares by of the company.

Acquisitions

As a reference exit, last year Roche bought the molecular diagnostics company IQuum (Marlborough, MA) for $ 275 million, with an additional 175 million if the company reaches a number of objectives related to the product. 

In this sense, about 3 weeks ago we received a proposal to purchase 100% of the company by the CEO of a company with which we are talking about granting a license for exclusive marketing in North America (Canada, United States and Mexico) of our MBDAA Tests for Lung Cancer, Paraneoplastic Syndrome and Ovarian.

Public Offering

2014 was a record year for biotech IPOs in the United States. Moreover, Wall Street―like the London Stock Exchange and others― seems to have a keen interest in companies focused on early detection of cancer, as evidenced by the market capitalization of several companies:

Dividends

Thanks to the latest news from China and the United States (related with some conversations we are having with companies with whom we contacted in order to license our algorithms and market in these countries), we decided to add a couple of clauses to the investment contract referring to the reimbursement of the amount invested (as preferred dividend):

  • Full refund (100% of the investment) as preferred dividend if December 31st 2016 the EBITDA of the company is more than 1 million euros (without prejudice to the acquired shares).
  • Partial refund (50% of the investment) as preferred dividend if the EBITDA is only 500,000 euros.

Drivers

Sergio J. Calleja Freixes: CEO & Chief Technical Officer 

Industrial Electronics, EUSS URL.; Predoctoral Fellowship directed by Brooks, Rodney A, UPC and MIT (Cambridge, US); Automation graduate, ETSAB UPC; MBA, ESADE URL; Master in Telecommunications, La Salle URL; Management and Marketing , ESADE URL; Skills Development, ESADE URL.

Previously, was the CEO in Liffebox (Barcelona, Spain); CEO in BeeLoop (Barcelona, Spain); Manager at T-Systems (Barcelona, Spain); Chief Technical Officer in Viasalus (Barcelona, Spain); Chief Technical Officer in La Vanguardia (Barcelona, Spain); IT Manager in ALDOC (Breda, Netherlands).

Rafael Molina Porto, MD, PhD: Chief Scientific Officer 

Medicine and Surgery, UB; Specialist in Clinical Analysis, UB; Doctor of Medicine, UB.

President of the International Society of Oncology and Biomarkers, ISOBM (London, UK); President of the European Group on Tumor Markers, EGTM (Munich, Germany); President of the Medical Commission of “Hospital Clínic de Barcelona” (Barcelona, Spain); President of the Catalan Society of Clinical Biochemistry (Barcelona, Spain); Board member of “Hospital Clínic de Barcelona” (Barcelona, Spain).

Anna M Betoret Turon: Chief Marketing Officer 

Turism in Sant Ignasi URL.; Management and Marketing, ESADE URL.

Previously, she was Chief Marketing Officer at Livebox (Barcelona, Spain); Chief Sales & Marketing Officer at BeeLoop (Barcelona, Spain); Busines Area Manager in Bestours (Barcelona, Spain).

Jorge Molina Santos: Sales Manager 

Trade and Marketing, Taulé Viñas - Ramar Campus.

Previously, he was Director of Feeling Retail (Mataró, Spain); Commercial Director at Vodafone (Barcelona, Spain); Product Manager at Phone House (Barcelona, Spain).

Partners & Associates

The company has as main partner/ally the Hospital Clínic of Barcelona, a world reference center for research and treatment of oncological diseases, which Dr. Molina is Head of Tumor Markers for Oncology, as well as Chairman of the Delegates Committee and elected member of the Board of the hospital.

With this center we have different agreements for the exclusive commercialization of different non-developed studies (keeping algorithms as trade secrets and main asset of the company), among which are signed to use patient data with which they were developed the algorithms for Lung Cancer, Paraneoplastic Syndrome/Cancer of Unknown Primary and Ovarian Cancer.

In addition, the company also collaborates or has options to license other databases or inquiries from other hospitals, research centers and universities.

On the other hand, we are also actively collaborating with Roche, Abbott and Siemens Fujiberio, among others, in the research developed by Dr. Molina, while following with special interest the progress of our algorithms.

Product/Service

MBDAA Test for Lung Cancer

The logic behind the development of the MBDAA Test for Lung Cancer was to design a noninvasive test, based on a simple blood sample, that would identify high-risk patients who could benefit from evidence-based scans are computed for early detection Lung Cancer.

Our MBDAA Test for Lung Cancer is not intended to replace tests based on LDCT, is a tool that physicians can use before exploring patients with LDCT and as the American Thoracic Society (ATS) confirmed, our algorithm has been proven valid for diagnosis of Lung Cancer. Several companies around the world (including Roche and Abbott) have contacted us requesting licenses for the commercialization of our MBDAA Test for Cancer Lung.

At present, our MBDAA Test for Lung Cancer offers a ratio of sensitivity/specificity of over 90%/98%, so our algorithm is the best current clinical option for diagnosis of Lung Cancer. By way of comparison: the PSA test (for prostate cancer) provides a ratio sensitivity/specificity close to 52%/72%.

When compared with the ROC curve test PAULA ―developed by the American company 20/20 GeneSystems (of which we have an offer on the table to license exclusively of our MBDAA Test for Lung Cancer for Canada, United States and Mexico)―, and is currently marketed in the United States at a price of US$ 150 per patient, it is also noticeably better:

In addition, recent work ―still unpublished―, have allowed us to increase the sensitivity/specificity ratio and differentiate between the two histological types of Lung Cancer: Non-Small Cell Lung Cancer (NSCLC) type and Small Cell Lung Cancer (SCLC) type and histologic subtype for cases (NSCLC), differentiating between adenocarcinoma and squamous, by introducing new calculations in our algorithm. This is highly important to select the best therapeutical options for each patient. 

Our MBDAA Test for Lung Cancer is priced at 50 €, significantly less than the amount of the cost of a LDCT and other follow-up interventions such as biopsies or other tests of diagnostic imaging, so we can say categorically that said test ―used as a tool for screening, diagnosis, prognosis and treatment monitoring, and performed before a LDCT―, allows, on the one hand, reducing the rate of false positives (FP) in the absence of Lung Cancer, and on the other, it will be advantageous in terms of reducing hospitalization costs, radiation exposure and psychological stress for patients.

Final Report

Once the doctor entered the patient data, our MBDAA Test for Lung Cancer presents the results as a PDF―document report that can be downloaded or sent by email― format. This report includes all patient data and risk assessment calculated from these data. It also includes a series of comments that are created dynamically based on entered patient data, such as levels of blood markers that would suspect the presence of cancer, but to consider other variables (such as sex, race, morbidities or smoking habits), do not correspond with malignant diseases.

Finally, a recommendation suggesting that steps should be taken then so when retested to track patient is included.

Cost/Effectiveness Study

Our MBDAA Test for Lung Cancer is priced at 50 €, significantly less than the cost of a CT scan and other follow-up interventions such as biopsies or other tests of diagnostic imaging.

This allows us to state categorically that our algorithm ―used as a tool for screening, diagnosis, prognosis and treatment monitoring (performed before or in addition to a computerized tomography)―, grant, on the one hand, reducing the rate of false positive (FP) in the absence of Lung Cancer, and secondly, it will be advantageous in terms of reducing hospitalization costs (for both patients and third party payers), radiation exposure and psychological stress for patients, as a preliminar Health Economics and Outcomes Research (HEOR) study has demonstrated.

In addition, we are working with different health insurance companies and mutuals that incorporate our MBDAA Test for Lung Cancer among its services.

Other developments

Although the data presented so far refers only to our MBDAA Test for Lung Cancer we are also actively working on the development of other algorithms for a variety of cancers.

In this sense we expect that two of them (the MBDAA for the differential diagnosis of Paraneoplastic Syndrome/Cancer of Unknown Primary as well as the MBDAA for Ovarian Cancer) will be ready during the second quarter of 2016.

Market

Epidemiology

Bringing together information from different sources, such as the World Health Organization (WHO), World Bank (WB) and UNESCO, as well as different databases from different countries, such as the Centers for Disease Control and Prevention Disease (CCPEEU) and the National Institutes of Health (INS) ―both of the United States, last year died 1,726,708 people with Lung Cancer around the world.

Cancer

Despite advances, Cancer currently remains the second leading cause of death in developed countries.

 

Lung Cancer

Lung Cancer is the leading cause of cancer death in China (with more than 670,000 deaths/year), the United States (over 182,000 deaths/year), and most industrialized countries (with more than 368,000 deaths/year in Europe), which means more deaths than Breast, Prostate, Colorectal, Liver, Kidney and Skin Cancer combined.

 

When Lung Cancer is detected early, 54% of patients survive for 5 years or more, but because this type of cancer shows no early symptoms, it is usually detected it has already spread and the chances of survival are slim

 

Lung Cancer Diagnosis

Currently, doctors consider the patients' age and smoking habits the two main factors to model the risk of Lung Cancer. For diagnosis, a system based on a computerized tomography (CT) ―a test with a high cost that sometimes detected benign nodules as potentially cancerous― is usually recommended. Approximately 28 percent of high-risk individuals who are subjected to CT scans obtained a positive finding, since the test often identifies all existing pulmonary nodules.

However, 97 percent of lung nodules are not cancer, and 25 percent of suspicious nodules are benign, meaning that 1 of 4 individuals with nodule and suspicion of cancer is not).

An analysis of cost/effectiveness published on November 6, 2014 in the New England Journal of Medicine estimated that the costs of a computed tomography were $1,631 per person and $ 81,000 per year of life gained adjusted for quality.

The total market for lung cancer diagnosis represents 1.5 billion dollars in the US, 5 billion dollar in China and 3 billion US dollar in the rest of the world (with a predicted reach 15.9 billion US dollar for 2020).

 

Marketing & sales

Marketing

In addition to searching the signing of cooperation agreements (or license) with different local businesses ―to reach the maximum number of customers in more countries (taking into account current resources) ― also we contemplate making direct actions focused on get a series of agreements with end customers (medical centers, governments, pharmaceutical companies, etc.), taking advantage of the prestige of Dr. Molina (as well as its extensive network of contacts).

In this sense, we have defined a series of actions that go through: parallel commercial shares in events that Dr. Molina will attend as speaker, or in those belonging to the organizing committee; attendance at different fairs and events dedicated to the tumor markers in oncology in general as well as those focused on Lung or Ovarian Cancer, which also seek to have strong presence, either through posters, stands, etc; as well as commercial tours conducted jointly with various institutions as planned with Roche, Abbott and Siemens Fujirebio.

The actions already confirmed for this year 2016 are as follows:

-       ELCC 2016 European Lung Cancer Conference (ESMO & IASLC), Geneva, Switzerland, April 13 to 16, 2016

-       Romania, April 18 - 21, 2016

-       Workshop in Lung Cancer Clinical Research for LATAM Region, Santiago, Chile, April 28 to 30 2016

-       IASLC Asia Pacific Lung Cancer Conference (APLCC 2016), Chiang Mai, Thailand, May 13 to 16, 2016

-       Experts Meeting on Gynecologic Oncology, San Antonio, Texas, USA, May 19-21, 2016

-       Oncologists 10th Annual Global Meeting, Cologne, Germany, July 11-13, 2016

-       2016 Latin American Lung Cancer Conference (LALCA), Panama City, Panama, August 25 to 27, 2016

-       The 43rd Annual Congress ISOBM: Towards Precision Medicine: From Biomarker Discovery to Novel Therapies (International Society of Oncology and Biomarkers), Chicago, IL, US, September 1-6, 2016

-       50th Congresso Brasileiro Clinical Pathology/Laboratory Medicine, Rio de Janeiro - RJ, Brazil, September 27-30, 2016

-       SEQC, Madrid, Spain

-       16th Biennial Meeting of the IGCS, Lisbon, Portugal, October 29-31, 2016

-       17th World Conference on Lung Cancer (IASLC), Vienna, Austria, December 4 to 7, 2016

We also want to emphasize in a special way the agreement reached with Roche Diagnostics through which we will have a series of joint tournées, as that will take place on 19 to 25 September this year 2016 with different laboratories in Brazil, Argentina, Uruguay and Chile to present our algorithms, all based on tumor markers that can be analyzed with equipment Cobas 6000 series of Roche, of which there are more than 10,000 installed worldwide; ―whose destinations and dates are still specifying―, focused to present our algorithms in China and other Asian countries like Singapore, Indonesia and Japan.

Sales

From the tables of patients with suspected Lung Cancer (diagnosis) and patients at risk (screeening), we have created a number of assumptions of market penetration based on different marketing actions listed in the previous section, starting with 1% for some regions or countries and expanding these percentages (as well as geographical areas) as the years pass.

In the following table are defined the penetration in percentage on population of patients with suspected (diagnostics market):

Number of analysis for the diagnostics market:

Total revenue for the diagnostics market to 50€ per test:

In the following table are defined the penetration in percentage on population of patients with at risk (market screening):

Number of market analysis for screening:

Total revenue for the market screening at 50€ per test:

In addition, as sales strategy contemplate signing agreements with different local companies to licencien our MBDAA Test for Lung Cancer and allow us an insight into different markets more quickly.

In this sense we are negotiating with several US companies to formalize a 10-year exclusive license for the marketing and distribution of our MBDAA Test for Lung Cancer.

Some of these companies to the region of North America (Canada, USA and Mexico) are:

Roadmap

In addition to the MBDAA for Lung Cancer, we have two more algorithms almost ready to market.

They are the MBDAA for Paraneoplastic Syndrome/Cancer of Unknown Primary and Ovarian Cancer, that we hope to release in the second quarter of 2016.

Paraneoplastic Syndrome and Cancer of Unknown Primary (CUP)

Cancer is a disease that is often diagnosed in advanced stages, belatedly. Over 20% of patients with malignancies are diagnosed through Paraneoplastic Syndrome (general symptoms that suggest the possibility of a tumor), presence of pleural effusions or ascites (fluid collections), by the presence of nodules in organs that suggest distant spread (metastasis), etc.

Often these patients are often admitted to hospitals where they are subjected to multiple tests, some invasive, to reach a differential diagnosis ―cancer or non cancer―, and finally in the first case, knowing where is that tumor.

In some cases there is never known and diagnosis is Cancer of Unknown Primary (CUP).

This term is used to define a heterogeneous group of patients in whom a primary tumor is detected. This group of patients represents up to 5% of histologically confirmed carcinomas in which a primary tumor is detected, so the prevalence is actually much higher (historically only is defined carcinoma as unknown source if that source is behind conducting an autopsy, which is not always done).

The prognosis of patients with CUP is very poor with a median survival of 3-4 months, only 25% of patients are alive one year and 10% at 5 years.

Cancer of Unknown Primary

This definition has been changing over time and there are some studies that argue that to define a carcinoma as of unknown origin requires the patient to present a histologically documented metastatic cancer, there is a detailed medical record, a thorough physical examination including pelvic and rectal exam, a blood test, a biochemistry, urinalysis, a test for fecal occult blood, a review of the biopsy using immunohistochemistry, a chest radiography and abdominal CT scan and/or mammography, as appropriate.

Unfortunately, all these diagnostic tests and complementary explorations which will undergo the patient are aimed at determining the primary tumor to be attacked with proper treatment, although this is achieved in most cases, which affects levels really high, besides representing a very substantial economic costs. For this reason, in most cases the number of scans is limited to those that can provide a clinical benefit to an individual patient as the treatment of patients with carcinoma of unknown origin with poor prognosis at present, provides meager profits, and recommending that studies focus will determine which chemotherapy regimens can provide the maximum benefit with minimal toxicity.

MBDAA Test for Paraneoplastic Syndrome/Cancer of Unknown Primary

Our MBDAA Test for the differential diagnosis of Paraneoplastic Syndrome/Cancer of Unknown Primary follows the same principles as the MBDAA Test of Lung Cancer, ie identify patients at high risk from a simple blood test for detection early primary Cancer that produces it.

Our MBDAA Test for the differential diagnosis of Paraneoplastic Syndrome/Cancer of Unknown Primary is based on the combined count of the AFP , CA 15.3, CA 19.9, CA 125, CEA, CYFRA, HE4, NSE, ProGRP, PSA, fPSA, p2PSA , SCC, S100 and TAG-72 biomarkers, as well as a number of symptoms, signs, comorbidities, blood biochemistry and smoking habits.

Its aim is to help the differential diagnosis of suspected locally advanced tumor or CUP, distinguishing cases without neoplasia of malignant tumors noninvasively, quickly and at low cost. This leads to a reduction average hospital stay (cost 600 €/day) and the necessary tests, with a diminution also morbidity for the patient.

Moreover, in cases with neoplasia, our MBDAA Test for the differential diagnosis of Paraneoplastic Syndrome and Unknown Origin Cancer orients the possible origin of the tumor by more than 60% of cases, including CUP. Knowing the origin of the tumor can facilitate diagnosis and therapy to be applied not as generic, but specific to the tumor in question.

The provisional ROC curve (in absence to finish modeling the algorithm and include anamnesis data) for combined biomarkers (AFP, CA 15.3, CA 19.9, CA 125, CEA, CYFRA, HE4, NSE, ProGRP, PSA, fPSA, p2PSA, SCC, S100 and TAG-72) of our MBDAA for the differential diagnosis of Paraneoplastic Syndrome/Cancer of Unknown Primary and throws a really interesting diagnostic capabilities:

Market for MBDAA Test for Paraneoplastic Syndrome/Cancer of Unknown Primary

Last year 2015 the following numbers of deaths were due to Cancer Unknown Primary:

From this information, we can calculate the data of the total market in 2016 for diagnosis:

Sales for MBDAA Test for Paraneoplastic Syndrome/Cancer of Unknown Primary

From the diagnosis table we have created a number of assumptions of market penetration based on different marketing actions listed in the previous section, starting with 1% for some regions or countries and expanding these percentages (as well as geographical areas) as the years pass.

In the following table are defined the penetration in percentage on population of patients with suspected (diagnostics market):

Number of analysis for the diagnostics market:

Total revenue for the diagnostics market to 100€ per test:

In addition, as sales strategy contemplate signing agreements with different local companies to licencien our MBDAA Test for Paraneoplastic Syndrome/Cancer of Unknown Primary and allow us an insight into different markets more quickly.

Ovarian Cancer

Ovarian Cancer is caused by an abnormal growth of cells in the ovary and is responsible for more deaths than any other gynecologic cancer being among women the eighth most common cancer and the fifth leading cause of death, the most common cancer in Caucasians that in African American.

There are over 30 different types of Ovarian Cancer, which are classified according to the type of cell from which they originate. The three most common types of Ovarian Cancer are:

-       The epithelial tumors occur in the epithelium, the tissue lining the outside of the ovary. Approximately 90% of Ovarian Cancers are of this type. The risk of epithelial Ovarian Cancer increases with age and affects mainly women over 60 years, but can occur at any age.

-       The germ cell tumors originate from egg-producing cells present in the ovary. This type of Ovarian Cancer can occur in women of any age, but affects mostly adolescents and young adults under 30 years. About 5% of all Ovarian Cancers are germ cell tumors.

-       Stromal tumors of sexual cords develop in the connective tissue that holds the ovary together and produce the female hormones, estrogen and progesterone. Stromal tumors of sex cords are relatively rare, so that account for about 5% of all Ovarian Cancers. Women may perceive some pain and abdominal discomfort in the early stages of the disease.

Like many cancers, mortality is substantially higher in patients whose disease is diagnosed in late stage or has metastasized to other organs, so there is an urgent need for better diagnostic tools and early detection.

Survival in Ovarian Cancer is also strongly associated with tumor stage: when the cancer is detected early ―Stages I or II―, the survival rate at 5 years is 95% and 65%, respectively, but the lack specific symptoms makes it also known as the "silent murderer" because 75% of patients arrive at an advanced stage ―III or IV Stages―, without having had previous symptoms, where survival rates are low.

In Ovarian Cancer ―and in a similar way to what happens in Lung Cancer―, it is necessary to remove those suspicious ovarian masses, which in most cases are not cancerous (only in the United States each year are removed between 200,000 and 300,000 of these suspicious ovarian masses).

Diagnosis of Ovarian Cancer

Currently, there is no effective method of early detection of Ovarian Cancer. It is usually diagnosed in advanced stages and only half of women survive more than five years after diagnosis. In 25% of Ovarian Cancers identified early, survival at five years is over 90%.

Multiple studies have shown that the prognosis and survival depend largely on the amount of tumor remaining at the time of the initial surgery. Patients without residual tumor or nodules smaller than one centimeter in diameter have the greatest chance of cure and long-term survival.

Most women with Ovarian Cancer have symptoms. However, these symptoms are often vague and can be attributed to less serious conditions such as indigestion, weight gain or the consequences of aging, which makes it really difficult diagnosis. In this sense, when pathology is suspected, a physical examination is performed and then is followed ―if palpation enlarged ovary or fluid in the abdomen (ascites)―, by different diagnostic procedures ―such as ultrasound image, computed tomography (CT), positron emission tomography (PET) or magnetic resonance (MR)―.

They have tried different methods for early diagnosis, including the use of CA 125 biomarker, but the results are not satisfactory, since this marker has a low sensitivity in the early stages while offering a high proportion of false positives (FP) in premenopausal women.

For some years, the valuation levels of HE4 ―a new marker tumoral―, offers greater sensitivity for these early stages, and greater specificity, so that through a combination of the values of CA125, HE4 and menopausal status of the patients, It was designed the ROMA (Risk of Ovarian Malignancy Algorithm) ―an algorithm with 3 variables and low complexity to help physicians in the diagnosis of Ovarian Cancer―.

Another different approach sought to improve early diagnosis by combining the CA125 and characteristics of the ovarian mass obtained by ultrasound, which led to the RMI (Risk of Malignancy Index for Ovarian Cancer) program.

Both algorithms are useful to help in the diagnosis of abdominal masses, and in the monitoring of treatment, but both can be clearly improved because ROME does not consider ultrasound or age of the patient and the RMI does not use the best tumor marker to date for the diagnosis of Ovarian Cancer (HE4), well as other variables that we have found are related to this disease in our own MBDAA Test for Ovarian Cancer.

ROC curves for the CA125, HE4 biomarkers and ROMA and RMI algorithms are as follows:

MBDAA Test for Ovarian Cancer

Our MBDAA Test for Ovarian Cancer follows the same principles as the MBDAA Test of Lung Cancer, ie, identifying high-risk patients from a simple blood test.

Tests conducted to date show a ratio sensitivity/specificity which places it as the best solution for the detection and diagnosis for Ovarian Cancer (ahead of Roma and RMI algorithms).

In addition, with a final price close to 60 € it will also mean a significant reduction in costs for patients (or payers), allowing reserve screening high cost based on the image to those patients who need it most, reducing thus the radiation exposure and psychological stress.

The ROC curve for two combined biomarkers ― used in the ROME algorithm (CA 125 and HE4) ― of our MBDAA Test for Ovarian Cancer, despite being a provisional curve failing to confirm recent studies (as well as include data other markers analyzed and patient history) provides a percentage of successes much higher above the accepted methods today worldwide for the diagnosis of Ovarian Cancer, such as RMI and ROME algorithms:

Moreover, when compared with the ROC curve OVA1 algorithm, developed by the US company Vermillion (NasdaqCM VRML) that has obtained approval from the FDA and is currently marketed in the United States at a list price of US$ 1,495 per patient, is also noticeably better:

Market for MBDAA Test for Ovarian Cancer

Last year 2015 the following numbers of deaths were due to Ovarian Cancer:

The market for our MBDAA Test for Ovarian Cancer can be divided into two groups: diagnosis and screening.

On one hand, the diagnostics market refers to those patients who have symptoms or signs related to possible Ovarian Cancer according your doctor or gynecologist for a number of symptoms (Abdominal pain, bleeding, etc.). For every 3 patients presenting these symptoms, only 1 end up being diagnosed with Ovarian Cancer, but the remaining 2 also will undergo various tests confirm or rule out the diagnosis of malignancy.

We can extract a simple blood test to all these patients and analyze with the biomarkers we used in our MBDAA Test and including the clinical information, obtain a diagnosis with more than 92% of success and to a much lower cost.

From this information, we can calculate the data of the total market in 2016 for diagnosis:

Moreover, the screening market is destined to the early detection of Ovarian Cancer in risk patients.

This group may in turn be approached with two assumptions: one more aggressive that begins with women’s over 25 years (to capture tumors from germ cells that develop in younger ages); and a more conservative second case in which the age of 55 is determined as cutoff age for early detection (range age that occurs the largest number of cases based on epithelial tumors and tumors stromal sex cord). In this regard we decided to work from the data of this second group for the screening market assumptions.

The data of the total market in 2016 for both cases (in number of patients/year), are:

Sales for MBDAA Test for Ovarian Cancer

From the tables of patients with suspected Ovarian Cancer (diagnosis) and patients at risk (screeening), we have created a number of assumptions of market penetration based on different marketing actions listed in the previous section.

In the following table are defined the penetration in percentage on population of patients with suspected (diagnostics market):

Number of analysis for the diagnostics market:

Total revenue for the diagnostics market at 60€ per test:

In the following table are defined the penetration in percentage on population of patients with at risk (more than 55 years old market screening):

Number of market analysis for screening (more than 55 years old):

Total revenue for the market screening at 60€ per test:

In addition, as sales strategy contemplate signing agreements with different local companies to licencien our MBDAA Test for Ovarian Cancer and allow us an insight into different markets more quickly.

Other Algorithms MBDAA Phase 2

As a strategy to be the leading company in the development of innovative diagnostic solutions, non-invasive, accurate and cost-effective, allowing enjoy better health, we are also working on the development of other algorithms MBDAA for other cancers taking advantage of the methodology and knowledge gained in the development of the algorithms for Lung Cancer, Paraneoplasic Syndrome/Cancer of Unknown Syndrome and Ovarian Cancer.

In this sense we have 3 algorithms for Prostate, Colorectal and Breast Cancers in phase 2 (phase in which it is the test designed and developed) of the 4 phases that exist (Research, Assay Development, Testing, Validation of R&D and Market Ready) as well as 6 algorithms for Liver, Pancreas, Stomach, Esophagus, Thyroid and Gallbladder Cancers in phase 1 (phase of research and literature search on novel tumor markers related to these pathologies).

For develop these 3 MBDAA Cancer algorithms, we have already licensed patients data for some of them, hoping to do the same with the rest throughout the year 2016.

MBDAA Test for Prostate Cancer

Our MBDAA Test for Prostate Cancer follows the same principles as the MBDAA Test to Lung Cancer, for differential diagnosis of Paraneoplastic Syndrome/Cancer of Unknown Primary and Ovarian Cancer, identify patients at high risk of Prostate Cancer from a simple blood test.

Our MBDAA Test for Prostate Cancer is in phase 2 (phase in which the test is designed and developed) of the four phases previously discussed, and is based on the values of the combination of different biomarkers such as PSA, fPSA or the 2pPSA, among others. In addition, we also review the family history, patient history information and information obtained by the image diagnostic methods.

As a next step in its development, we need to perform some tests that we hope start during the third quarter of 2016.

Provisional screen for MBDAA Test for Prostate Cancer:

Market for MBDAA Test for Prostate Cancer

Last year 2015 the following number of deaths occurred due to Prostate Cancer:

From this information, we can calculate the data of the total market in 2016 for diagnosis:

MBDAA Test for Breast Cancer

Our MBDAA Test for Breast Cancer also seeks to identify patients at high risk of developing this cancer from a simple blood test.

This algorithm is also in Phase 2 and based on the combined count values of biomarkers and the presence of certain genetic mutations. In addition also it has into account a family history, patient history information and information obtained by the image diagnostic methods.

Nowadays, the diagnosis of Breast Cancer is currently carried by ―widely image used― procedures, such as ultrasound, mammography and MRI.

Given its widespread use, in 1992 the American College of Radiology (ACR) guidelines designed a series of structured based on radiological findings that led to the creation of the BI-RADS (Breast Imaging Reporting and Data System).This system was created with the intention to facilitate the diagnosis and classification of the findings, but unfortunately leaves much room for interobserver interpretation, ie, a radiologist can perceive a stain as "round" and another may perceive it as "more or less oval ", not to mention the large number of variables to consider, which makes it very difficult to use in day to day.

We have configured these variables (as they are the basis for our studies ―along with the analysis of different biomarkers in blood and the final diagnosis by the pathologist), and have developed a product of broad utility to help radiologists to get the score of BI-RADS, something we are studying to commercialize independently until we have the finished MBDAA Test for Breast Cancer.

As a next step in its development, we need to perform some tests that we hope start during the third quarter of 2016.

Provisional screen for MBDAA Test for Breast Cancer:

Market for MBDAA Test for Breast Cancer

Last year 2015 the following number of deaths occurred in Breast Cancer:

From this information, we can calculate the data of the total market in 2016 for diagnosis:

MBDAA Test for Colorectal Cancer

Our MBDAA Test for Colorectal Cancer also seeks to identify patients at high risk of developing this cancer from a simple blood test.

This algorithm is also in Phase 2 and based on the combined count values of biomarkers and the presence of certain genetic mutations. In addition also it has into account a family history, patient history information and information obtained by the image diagnostic methods.

In this sense, the diagnosis of Colorectal Cancer is currently carried by ―widely image used― procedures, such as computed tomography, computed positron emission tomography and magnetic resonance imaging.

In 2005, a group of radiologists proposed developing a similar system to the BI-RADS (Breast Imaging Reporting and Data System), leading to C-RADS system (Colonography Reporting and Data System) to standardize the reports from radiological findings. This system meant a breakthrough in the diagnosis of Colorectal Cancer but, as in the BI-RADS system also leaves much room for interobserver interpretation and the large number of variables to be considered makes it very difficult to use in day to day.

As development of the MBDAA Test for Colorectal Cancer also involves parameterize the different variables that are contemplated in the C-RADS system, we do not discard creating a specially sub product designed as a help for radiologist in the classification of findings and promote the use of this system until we have finished the MBDAA Test for Colorectal Cancer.

As a next step in its development, we need to perform some tests that we hope start during the third quarter of 2016.

Provisional screen for MBDAA Test for Colorectal Cancer:

Market for MBDAA Test for Colorectal Cancer

Last year 2015 the following number of deaths from Colorectal Cancer occurred:

From this information, we can calculate the data of the total market in 2016 for diagnosis:

Other MBDAA Phase 1

In addition to the MBDA for Prostate, Colorectal and Breast Cancers in phase 2, we started the research phase and searching for literature on novel tumor markers related to Liver, Pancreas, Stomach, Esophagus, Thyroid and Gallbladder Cnacers (phase 1).

Because of not having enough resources right now to dedicate time to research and studying for these 6 algorithms, we hope to do so throughout this and next year and move to Phase 2 of each algorithms between the fourth quarter of 2016 and the end of next year.

In the meanwhile, we have developed RALD in order to help us to find as much literature as possible to perform in close future these new MBDAA Tests.

RALD

Rapid Algorithm Development (RALD), is our own self-developed Framework for reducing time to Multi-Biomarker Disease Activity Algorithm (MBDAA) creation.

Currently, RALD is running in an independent Cloud Cluster and compiles 24/7 from Internet literature ―at the present stage, we are only using the online National Center for Biotechnology Information (NCBI) database PubMed―, a huge list of several proteins believed to be differentially expressed in human cancer (more than 1,000 already indexed). These proteins, only some of which have been detected in plasma to date, represent a population of candidate plasma biomarkers that could be useful in early cancer detection and monitoring given sufficiently sensitive specific assays.

For each of the proteins identified above, a second-level iterated search is performed using the known protein name together with the cancer name (such as “pancreas” or “pancreas cancer” for Pancreas Cancer). That means we will begin to prioritize these markers for future validation by frequency of literature citations, both total and as a function of time.

The candidates include proteins involved in “oncogenesis”, “angiogenesis”, “development”, “differentiation”, “proliferation”, “apoptosis”, “hematopoiesis”, “immune and hormonal responses”, “cell signaling”, “nucleotide function”, “hydrolysis”, “cellular homing”, “cell cycle and structure”, the “acute phase response” and “hormonal control”.

Many of them have been detected in studies of tissue or nuclear components; nevertheless we hypothesize that most ―if not all―, should be present in plasma at some level. By the way, we have noticed that of the whole candidates only a small group is approved as “tumor associated antigens” by the US Food and Drug Administration (FDA) ―something to keep in mind to accelerate the commercialization of the resulting MBDAA Tests in the United States―.

Thank to results obtained, we think this Very Large Scale Validation (VLSV) of candidate biomarkers will fill the gap currently existing between basic research and clinical use of advanced diagnostics, allowing us to develop others MBDAA Test in less time than our MBDAA Test for Lung Cancer, Paraneoplastic Syndrome/Cancer of Unknown Primary (CUP) and MBDAA Test for Ovarian Cancer.

MBDAA Test for Thyroid Cancer

Our MBDAA Test for Thyroid Cancer also seeks to identify patients at high risk of developing this cancer from a simple blood test.

This algorithm is in Phase 1, the phase of research and literature search on novel tumor markers related to this pathology.

In addition, as in Breast Cancer, there is also a classification system based on radiological findings known as TI-RADS (Thyroid Imaging Reporting and Data System) proposed by Horvath in 2009 and recently recognized by the American College of radiology (ACR), was developed to facilitate diagnosis and classification of radiological findings.

As development of the MBDAA Test for Breast Cancer also involves parameterize the different variables that are contemplated (since they are the basis for our studies ―along with the analysis of different biomarkers in blood and the final diagnosis by the pathologist) and we have obtained a product of broad utility to help radiologists to obtain the TI-RADS score, we are also assessing to commercialize independently until we have the finished MBDAA Test for Thyroid Cancer.

We hope to have completed the current phase before the fourth quarter of 2016.

Provisional screen for MBDAA Test for Thyroid Cancer:

Market for MBDAA Test for Thyroid Cancer

Last year 2015 the following numbers of deaths were caused by Thyroid Cancer:

From this information, we can calculate the data of the total market in 2016 for diagnosis:

MBDAA Test for Liver Cancer

Our MBDAA Test for Liver Cancer also seeks to identify patients at high risk of developing this cancer from a simple blood test.

This algorithm is in Phase 1, the phase of research and literature search on novel tumor markers related to this pathology.

In addition, as in Breast Cancer, there is also a classification system based on radiological findings known as LI-RADS (Liver Imaging Reporting and Data System), created in 2009 by the American College of Radiology (ACR) for facilitate the diagnosis and classification of findings.

MBDAA Test development for Liver Cancer also involves parameterize the different variables that are contemplated in the LI-RADS system and we do not discard creating a product specially designed for radiologists.

We hope to have completed the current phase before the fourth quarter of 2016.

Provisional screen for MBDAA Test for Liver Cancer:

Market for MBDAA Test for Liver Cancer

Last year 2015 the following numbers of deaths were due to Liver Cancer:

From this information, we can calculate the data of the total market in 2016 for diagnosis:

MBDAA Test for Pancreatic Cancer

Our MBDAA Test for pancreatic Cancer also seeks to identify patients at high risk of developing this cancer from a simple blood test.

This algorithm is in Phase 1, the phase of research and literature search on novel tumor markers related to this pathology.

Hoping to arrive to Phase 2 before the end of next year.

Provisional screen for MBDAA Test for pancreatic Cancer:

Market for MBDAA Test for Pancreatic Cancer

Last year 2015 the following numbers of deaths were caused by pancreatic Cancer:

From this information, we can calculate the data of the total market in 2016 for diagnosis:

MBDAA Test for Stomach Cancer

Our MBDAA Test for Stomach Cancer also seeks to identify patients at high risk of developing this cancer from a simple blood test.

This algorithm is in Phase 1, the phase of research and literature search on novel tumor markers related to this pathology.

Hoping to arrive to Phase 2 before the end of next year.

Provisional screen for MBDAA Test for Stomach Cancer:

Market for MBDAA Test for Stomach Cancer

Last year 2015 the following numbers of deaths were caused by Stomach Cancer:

From this information, we can calculate the data of the total market in 2016 for diagnosis:

MBDAA Test for Esophageal Cancer

Our MBDAA Test for Esophageal Cancer also seeks to identify patients at high risk of developing this cancer from a simple blood test.

This algorithm is in Phase 1, the phase of research and literature search on novel tumor markers related to this pathology.

Hoping to arrive to Phase 2 before the end of next year.

Provisional screen for MBDAA Test for Esophageal Cancer:

Market for MBDAA Test for Esophageal Cancer

Last year 2015 the following numbers of deaths were caused by Esophageal Cancer:

From this information, we can calculate the data of the total market in 2016 for diagnosis:

MBDAA Test for Gallbladder Cancer

Our MBDAA Test for gallbladder Cancer also seeks to identify patients at high risk of developing this cancer from a simple blood test.

This algorithm is in Phase 1, the phase of research and literature search on novel tumor markers related to this pathology.

Hoping to arrive to Phase 2 before the end of next year.

Provisional screen for MBDAA Test for gallbladder Cancer:

Market for MBDAA Test for Gallbladder Cancer

Last year 2015 the following numbers of deaths were caused by gallbladder Cancer:

From this information, we can calculate the data of the total market in 2016 for diagnosis:

 

Forecast

Revenue Forecast for Lung Cancer MBDAA

Revenue Forecast for Paraneoplastic Syndrome/Cancer Unknown Prmary MBDAA

Revenue Forecast for Ovarian Cancer MBDAA

Total Revenue Forecast for All MBDAA

Costs Forecast

Result Forecast

 

Investment details

Financial Needs

Having 3 algorithms ready to market, the financial needs of the company will focus on hiring the necessary manpower to initiate the commercialization phase. We are seeking 300,000 € to cover the costs of a serie of actions (both marketing and sales support), aimed at achieving agreements with end customers (medical centers, governments, pharmaceutical companies, etc).

Defined actions are:

-       Parallel events in the events that Dr. Molina attends as a speaker or in those belonging to the organizing committee.

-       Fairs and events dedicated to Tumor Markers, oncology overall, as well as those focused on Lung or Ovarian Cancer, where we will also seek to have strong presence, either through posters, stands, etc.

-       Commercial Tours conducted jointly with various institutions as already planned with Roche Diagnostics, Abbott Laboratories and Siemens Fujirebio.

Pre-Money Valuation

The pre-money valuation of 6 million Euro is based on the following factors:

1.    The market size (more than 9.5 billion dollars worldwide for Lung Cancer test) is really huge, and Bioprognos is one of the first companies with proven capacity to exploit that market.

2.    The Company has extensive know-how in property.

3.    The management team is a talented and knowledgeable group in their respective areas (Medical Research, Marketing, Sales and Finance). In addition, Dr. Molina is President of the International Society of Oncology and Biomarkers, ISOBM (London, UK), President of the European Group on Tumor Markers, EGTM (Munich, Germany); President of Delegates Committee Hospital Clínic de Barcelona (Barcelona, Spain); President of the Catalan Society of Clinical Biochemistry (Barcelona, Spain), and has participated in the processes of the FDA for approval of the SCC and NSE Roche biomarkers, and is currently collaborating with the validation of the abbott SCC.

4.    Medical Pre-money valuation for investment type Series A/B in biotech companies in 2015 was approximately 20 million.

5.    The purchase price of small diagnostic companies (with limited income) recently acquired, as well as the market capitalization of companies traded publicly related to Cancer diagnosis (as Myriad or Exact Sciences) allow high returns for investors this relatively low valuation.

6.     The valuation has been adjusted to the risk estimated for the project.

Exit details

There are three ways in which shareholders could obtain liquidity on their investment, in order of probability: (1) acquisition, (2) public offerings of sales (IPOs), and (3) pay dividends or repurchase of shares by of the company.

Acquisitions

As a reference exit, last year Roche bought the molecular diagnostics company IQuum (Marlborough, MA) for $ 275 million, with an additional 175 million if the company reaches a number of objectives related to the product. 

In this sense, about 3 weeks ago we received a proposal to purchase 100% of the company by the CEO of a company with which we are talking about granting a license for exclusive marketing in North America (Canada, United States and Mexico) of our MBDAA Test for Lung Cancer.

Public Offering

2014 was a record year for biotech IPOs in the United States. Moreover, Wall Street―like the London Stock Exchange and others― seems to have a keen interest in companies focused on early detection of cancer, as evidenced by the market capitalization of several companies:

Dividends

Thanks to the latest news from China and the United States (related with some conversations we are having with companies with whom we contacted in order to license our algorithms and market in these countries), we decided to add a couple of clauses to the investment contract referring to the reimbursement of the amount invested (as preferred dividend):

  • Full refund (100% of the investment) as preferred dividend if December 31st 2016 the EBITDA of the company is more than 1 million euros (without prejudice to the acquired shares).
  • Partial refund (50% of the investment) as preferred dividend if the EBITDA is only 500,000 euros.