Nano-biotech for Cancer Detection

06/04/2004 12:00 am EST


Josh Wolfe

Editor, Forbes/Wolfe Emerging Tech Report

Before developing his expertise in nanotech, Josh Wolfe was known for his leading edge immunology research. This background makes him particularly well suited to analyze Immunicon, a company developing cancer diagnostics in the emerging nano-biotech arena.

"Immunicon (IMMC NASDAQ) has raised a total of $88 million in venture financing since inception in 1983, the largest amount of any nanotech startup. Yet it has accomplished this below the radar, choosing to focus more on their cancer diagnostic products and partnerships than rely on the hype surround nanotechnology. And almost as silently as they’ve dominated the nanobiotech fundraising world, Immunicon completed their initial public offering on the NASDAQ on April 16. After researching Immunicon thoroughly, I’m taking this opportunity to add the company to our Nanosphere portfolio as a ‘buy’.

"Cancer is spread when malignant cells break away from the tumor and travel through the lymphatic system or the bloodstream. These cells, called circulating tumor cells (CTCs), can then lodge in other organs or tissues, causing new tumors to form. While substantial progress has been made in drug development and other therapeutic approaches for fighting cancer, today’s blood tests for cancer markers provide only limited information. Immunicon hopes to change that. It has developed magnetic nanoparticles, called ferrofluids, that 'glom' on to cancer cells in blood samples. When the sample is placed in a magnetic field, the cells bound to the particles are separated from the rest and can then be analyzed. In trials, the test was able to detect a single cancer cell among billions of blood cells. Knowing the number of cancer cells greatly increases the chance of early and accurate detection.

"Immunicon has developed an integrated system called CellTracks for more complete diagnosis, staging, and selection of primary therapy, as well as the effective monitoring of post-surgical and disease therapies. For its first application, Immunicon conducted trials to see if the technology could be used to monitor how breast-cancer patients respond to different therapies. If the cancer was under control, the number of tumor cells picked up by Immunicon’s test was expected to decrease. Breast cancer was selected because it is the most frequently diagnosed cancer among women and there are multiple treatments available that need accurate and reliable monitoring tools. The test was a success. According to Immunicon, the trial demonstrated that CTCs could predict response in 80% of the patients on two cycles of therapy and that CTCs can predict if the patient will respond to therapy and how long the patient will live.

"Today, Immunicon relies heavily on Johnson & Johnson to help commercialize its cancer technology. J&J’s Veridex subsidiary has the worldwide exclusive license to commercialize cell-analysis products based on Immunicon’s technologies in the cancer field. In January 2004, Veridex received clearance from the FDA for a device, which can help manage metastatic breast cancer. IMMC and Veridex expect to have this product on the market in the US in the third quarter of 2004. Not only does the company hope to pursue the diagnostic applicability to solid tumor cancers like lung, colon, ovarian, pancreatic cancers, and melanoma, but its nanoparticles and antibody research could also help drug companies test the efficacy and develop new therapeutic treatments, a potentially much more lucrative market than offering diagnostic tests.

"It is important to keep in mind that the company has not yet generated a revenue stream to support its research operations. Immunicon generated just shy of $3 million in revenues last year, ending 2003 with a net loss of $17.6 million. The firm has incurred net losses of $63 million since 1983. Such is the nature of early stage research and development business in biotechnology. The company has roughly $65-$70 million in cash, after its IPO. Stripping out the cash, the market values IMMC’s two decades worth of funding research, its entire patent estate (137 issued or patent applications), and ongoing operations at just north of $100 million. Based on this, we believe IMMC represents an attractive opportunity for long-term investors."

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