Diabetes in China: Canadian Biotech Aims to Make a Difference
Diabetes and heart disease are health scourges that are not exclusive to North America. They are killing millions around the world every year. Earlier and earlier detection and treatment is the only way to mitigate the numbers suffering or lost. Fortunately, small biotech companies are aggressively pursuing amazing technologies, including early diagnostic and risk assessment tests, in an effort to slow or eradicate these devastating public health challenges, whether found in Washington, Toronto, London, Beijing or Capetown.
These smaller biotech companies like Canadian based Miraculins Inc, are doing much of the most exciting work in diagnostics. While the key is obviously the technology, the point for investors is to find those opportunities that reach the largest markets, have the best efficacy, are easy to use and readily available at low cost.
Based in Winnipeg, Miraculins recently announced a term sheet for an exclusive distribution deal for its Scout DS® Non-Invasive Diabetes Screening test with China's Cachet Pharmaceutical, a $700 million market cap company. The Canadian-based biotechnology company develops and commercializes diagnostic and risk assessment technologies through licensing and/or acquisition. The Scout DS® is the world's first non-invasive and highly sensitive test designed to measure diabetes related biomarkers in the skin. It does not require a blood draw or fasting and generates a result in as little as 80 seconds. The Scout DS® uses visible light to measure the optical signature of fluorescent biomarkers in the skin, the accumulation of which are accelerated by abnormal blood sugar levels and oxidative stress. Once cleared by the CFDA, Cachet's minimum orders over the 5-year term could represent in excess of $90 million USD in revenue to Miraculins. Upfront fees paid by Cachet to Miraculins could amount to $500,000 USD.
The World Health Organization states that Diabetes will be the 7th leading cause of death by 2030. One has to merely analyze the western lifestyle to realize the growth of the disease in the US alone. That said 80% of diabetes occurs in low and middle-income countries. The growth of affluence and sedentary lifestyle in China, for example, has caused the growth of the disease to become rampant, where there was virtually no Type 2 diabetes a decade ago. Just as in the US and western nations, the rapid growth of the disease is straining health care. With 11.6% of Chinese having diabetes versus 11.3% in the US, new tests and treatments are critical. Those numbers will only get worse.
"Given the need for this test in China, we are confident that on the agreement's expected conclusion within 90 days, this deal will be transformative for Miraculins and our shareholders. The marketing and sales of our test by Cachet puts us firmly on the global stage as we move towards becoming a world-class diagnostic and risk assessment leader," states Christopher Moreau, President and CEO of Miraculins.
Scout DS® has been cleared for sale in Canada and the EU, and Miraculins has recently filed pre-submission documentation with the USFDA (United States Food and Drug Administration) towards securing Scout DS® marketing clearance in the United States.
In the case of heart disease, the leading cause of death globally (48%), the earlier it is detected, the greater the chance of survival. Think in terms of a non-invasive cholesterol test you can take at a local pharmacy to assess the risk of coronary artery or heart disease. And have the results in 5 minutes.
"Most people don't realize that there is measurable cholesterol present in skin," stated Moreau. "While a test such as our PreVu® skin cholesterol test does not replace blood work, it is a low cost, first line indicator, much like the ubiquitous high blood pressure machines located in pharmacies in Canada and around the world."
As stated in the BC Medical Journal in December 2012: "The PreVu Point of Care (POC) test identifies individuals who may be at a higher, hidden risk of coronary artery disease. The POC test may become a tool in the prevention of the critical first incident; patients whose scores are elevated in the POC test will be advised to seek advice from their physician."
Miraculins has also been in a collaborative development program with diagnostic giant Alere Inc. and has pursued technology that identifies the presence of the biomarker Endoglin as a promising, potential early indicator of Preeclampsia, which costs the world health system $3 billion a year.
The global diagnostic market generates revenues of $30 billion; $11 billion in the US. One merely has to pay cursory attention to the media to know that figure will, unfortunately, rise significantly as the global population grows and ages.
In a world that can't have too many diagnostic and risk assessment tests, those that provide ease of use, low cost and substantive results will have the greatest impact on patients. Investors who want worthwhile early stage biotech would do well to consider companies such as Miraculins.
One gets the sense that CEO Chris Moreau and his team care as much about patients as shareholders. And that's the way it should be.
"We believe strongly in our technologies, in their capacity to impact patients in need worldwide, and we believe in the corresponding potential of our company to build and achieve significant value for shareholders along the way," Moreau added.