Welcome back, everyone. Next, we have ANGLE plc. It trades on the OTCQX under the symbol ANPCY and on the AIM under the symbol AGL. It is a world-leading liquid biopsy company with innovative circulating tumor cell solutions for use in research, drug development, and clinical oncology using a simple blood sample. Happy to welcome its Founder and CEO, Andrew Newland, and CFO, Ian Griffiths. Welcome, gentlemen. How are you today?
Very well. Good to be here.
Wonderful. The floor is yours.
Welcome, everybody, and thank you very much for joining ANGLE's presentation. The intention of this presentation is to introduce our company to new potential investors. We hope you'll find it very interesting because what we're offering is a completely new approach to the diagnosis of cancer and its treatment. That is driven by a patented technology that we've developed called the Parsortix system, which is a microfluidic device for recovering circulating tumor cells, cancer cells from patient blood. That all sounds very technical and complex, but I can explain it in pretty simple terms. What we believe is that a simple blood test using our technology can genuinely transform cancer care for the better. Now, I'm going to make the presentation, and then my colleague Ian Griffiths is going to join for the question and answer session.
Just a couple of background biological elements that are important to understand, which is that if you have three cancer patients that, for example, all have breast cancer, you would imagine that they have the same disease, but in reality, they do not. They all have different diseases, but in the same part of their body. That is why a one-size-fits-all approach to cancer treatment does not work. You have to understand the individual's cancer in order to give them an individualized cancer treatment approach. That is why it is standard of care for cancer patients to have a biopsy, which is a tissue biopsy where some of the cancer is cut out and taken to a laboratory and examined. From that information, you can decide exactly what type of cancer the patient has and how best to treat that cancer.
Now, that's all well and good and works well, except that there's another twist to it, which is that cancer evolves and changes over time. It's constantly dynamically mutating and changing. That means that the information that came from the tissue biopsy when the patient was diagnosed can become out of date and no longer accurate. What you need is the ability to repeat the biopsy. Obviously, that's challenging in the sense that once you cut out the cancer, if it's breast cancer, then a patient might have had a lumpectomy or a mastectomy, they still have cancer, and you want to get repeat information, but they no longer have a centralized location where the cancer is available for a tissue biopsy. You can't repeat a tissue biopsy. That's the fundamental need that ANGLE is addressing with its Parsortix system.
What you see here is an instrument, a Parsortix machine that we've developed, which automates the flow of blood. This is a standard tube of blood withdrawn from the vein in the patient's arm, a single tube of blood, absolutely in normal process that's obtained. What we can do is that instrument will progress the blood through a one-time use Parsortix cassette shown at the bottom of this slide. That cassette is a very smart bit of microfluidics technology, which separates cancer cells from blood cells based on their larger size and lack of compressibility. Both those physical factors are very important in its efficacy. What that then enables is the recovery of cancer cells in the blood for subsequent analysis. We can achieve that reliably, notwithstanding the fact that they're very rare in number.
Generally speaking, in that tube of blood you see above, which might be around 10 ml of blood, there might be 10 billion blood cells, so 10,000 million blood cells, but there might only be 10 cancer cells. Despite it being known that these cancer cells are present for a long time, it's not been possible to reliably recover them for analysis. We've solved that technical challenge. In fact, we've taken it on from there. After a very extensive process of testing and development, we successfully secured an FDA clearance for our product. In fact, we're now the only FDA-cleared product ever cleared for harvesting cancer cells from blood for subsequent analysis. The subsequent analysis is really important because you need to look at the cancer cells in order to find out the information that's needed to guide treatment.
Now, the industry involved in liquid biopsy, and I'll explain a bit more later, but there are multiple companies, mainly U.S., but also other global companies who are doing liquid biopsy, the idea of getting cancer material from blood for analysis, which is where we're focused. They are focused on a different analyte. They are focused on circulating tumor DNA, ctDNA for short. What ctDNA is, is fragments of dead and dying cancer cells. What we're recovering are intact living cancer cells that are currently spreading the disease. They are not dead. They are alive. They are intact.
What that means is, whereas the ctDNA can analyze some DNA information about the cancer, the circulating tumor cells, known as CTCs, which our system recovers, are capable of analyzing all the facets of the cancer, which means DNA, RNA, protein expression, morphology of the cells, and the existence of circulating tumor cell clusters, which are in fact highly metastatic in terms of spreading the disease. We have a solution which is very widely applicable. In fact, we have had the system out for use, early adoption by leading cancer centers around the world. We now have over 100 peer-reviewed publications from 42 independent cancer centers who have utilized this system actually in 24 different cancer types. Those of you who are sharp-eyed will see that our FDA clearance was in metastatic breast cancer. In reality, this system works without modification in all solid tumor cancers.
It has a very, very wide applicability and use. Now, the market that we're working towards, of course, is the entire cancer industry, which is very large. Unfortunately, cancer incidence is growing very fast. Indeed, not only that, costs of care are spiraling almost out of control, to be honest. Now, the Parsortix system, if you can get these cancer cells out of the blood, you can analyze them for lots of different things. You can use them for the diagnosis of clinically significant cancer, so early diagnosis. You can use them to make treatment decisions as to which drug would be most effective for a particular patient. You can use them for assessing minimal residual disease. In other words, does the patient still have cancer?
Importantly, there's an opportunity to use them for remission monitoring, which means the big thing that all patients have when they've had cancer and they're told that they're thankfully in remission is, has my cancer come back or is it coming back? Can you reassure me that my cancer has not come back? That's what we mean by remission monitoring. The presence of circulating tumor cells in the blood should not be there if the patient is still in remission. Yet, if they were found at a later time point to be becoming present again, they can be treated before they've led to the spread of cancer to a secondary organ. That's not currently possible in standard of care where they measure with CT scans and other techniques the spread of the cancer.
You're told that it has spread, but not that you can do something about it before it spreads. In terms of costs, worth giving an example, the new cancer drugs are becoming ever more targeted, and some of them are very effective. For example, the new immunotherapies can be very successful for patients, but they're expensive. They can cost $200,000 for each patient, but they're ineffective for four out of five patients. One in five patients will have a very good response, potentially, but four in five will get no benefit. That's a lot of money being spent for no benefit. Actually, it's a disbenefit for the patient because they receive the toxic side effects of those drugs without any of the benefits. There are lots and lots of very important reasons that this technology is important for improving cancer care.
Obviously, we're having successfully developed this technology and got it proven out with independent cancer centers. We're now very actively into the commercialization phase, and we're driving commercialization of the technology through alignment with large pharmaceutical companies. The reason we're doing that is because those large pharma companies have a vested interest in funding development of tests with those cancer cells, which we call assay development, and also funding clinical trials to show the efficacy of the approach in different settings. They do that not because they want to help ANGLE, but because it drives benefit for them. We've set out on this slide some of the key benefits that pharmaceutical companies can get from using our approach. They can select patients for their trials. That's very important because, as I mentioned, tissue biopsy samples can be out of date.
They almost always are out of date because a lot of these drugs are prescribed at a later stage. Maybe the patient's three years into their disease, and it started to progress, and they need more treatment. Yet, the tissue biopsy is three years out of date. It is no longer giving accurate information. Also, in a lot of cancer types, it is not possible; it has not been possible to get hold of a successful tissue biopsy at all, maybe through lack of accessibility or other factors. The ability to assess whether patients are responding to the drugs in their trial is very important. We can give them early information by monitoring patients at multiple time points before, during, and after they have a drug in a trial. The development of bespoke assays.
We have customers requesting very specific proteins or other targets for their drugs be analyzed on the CTCs. We can develop that ability in our specialized CTC laboratories. Finally, the ultimate aim for the pharmaceutical company, of course, is to secure regulatory approval and then reimbursement for their new drug. To do that, increasingly for the new, much more specific and personalized drugs, they need companion diagnostics, which means a test usually via blood in order to determine whether the patient should be prescribed the drug or not. All of these are very strong drivers for pharma to align and utilize ANGLE's technology. We are building out that approach. These pharmaceutical relationships have the potential to be very remunerative to ANGLE and generate large revenues for us. There are major revenue opportunities.
Just on a single drug, and obviously, there are hundreds of drugs being developed, we can expect to get at least GBP 200,000, so maybe call that just under $300,000 for an assay development phase and an initial pilot study for the pharma to test out how well this works. Moving into individual clinical studies, the Phase II studies, we will be reimbursed essentially at least $2,500 per tube of blood that we process in our bespoke laboratories for that purpose. You would expect in a Phase II, there might be between 100 and 300 patients at three time points. That is what gets you between GBP 1 million and GBP 3 million revenue for that drug in Phase II. Phase III is about 10 x larger because more like 1,000-3,000 patients. Obviously, it depends on drug by drug. The time points might be greater.
It might be more like five different time points to assess how well the patient's doing in the drug trial at different time points. That gives the opportunity for a single drug in a Phase III of generating between GBP 15 million and GBP 45 million revenue to ANGLE. Obviously, longer term, sort of year five or six, there's an opportunity for an annuity revenue funded by the pharma to be a companion diagnostic. If you think about having a drug that's out on the market for $200,000 a patient, you're certainly happy to pay $2,000 to $3,000 for a blood test with the aim of finding that one patient in five. There's a big opportunity for long-term annuities. Now, again, why is pharma interested in spending all this money? The answer is that drug trials are very expensive.
On average, a new drug trial is costing in the region of just under $300 million , but it only has a one in eight chance of being successful. Anything they can do to reduce those costs and get to a result quicker is saving them a lot of money. If you think about the cost per patient of $180,000 on average per patient, a few thousand dollars to select the right patient is really not that much money and can generate very good results for pharma. In essence, the alignment with pharmaceutical companies helps ANGLE get the key development activities funded and generate significant revenues for us during that process. The pharmaceutical companies that we've already secured as customers, you see the AstraZeneca name there twice. That's because we have two projects with them and one with Eisai.
Eisai is a large Japanese pharma, and they have employed ANGLE in the first stages of a breast cancer HER2 ADC drug development. ADC is an antibody drug conjugate, and it's a HER2 one. This drug is designed specifically to attach to cancer cells that express the protein HER2. The problem they have is they don't know whether the patient has those cancer cells that express HER2. There have been studies that show that over time, 40% of the original tissue biopsy results for HER2 have changed by the time they get to prescription of these kinds of drugs. They need a real-time solution to assess the HER2 status of the patient. ANGLE has developed that.
We've got the ability to recover cancer cells from the blood of breast cancer patients and then assess those cells to see whether or not they express the key protein of action HER2. The AstraZeneca work is also in proteins. The first project with them is to develop the ability to look at key DNA damage response proteins. That affects multiple different cancers. We've got development work going on there, which is progressing very nicely. The second project they have given to us is in assessing the protein androgen receptor in prostate cancer, which is a key target for prostate cancer drugs. Now, these pharmaceutical companies do not have a choice to go elsewhere for this type of activity because you need the cancer cells in order to measure proteins.
You can't do it on the alternative analyzed circulating tumor DNA, which comes from dying and dead cancer cells. They don't enable the management of proteins at all. In addition to that, we've got multiple biopharma customers, including quite a large market cap one in Recursion Pharmaceuticals. We've got multiple other pharma that we're in discussions with, and we hope to add to our roster of customers over the coming months. I've already explained that the current contracts we have focus on measuring proteins on circulating tumor cells, and that cannot be done on the alternative analyzed ctDNA at all. We can also measure DNA, which can be measured on ctDNA.
We decided to investigate whether or not we would get the same results on the DNA that comes from CTCs, the living cancer cells, versus the DNA that comes from ctDNA, the fragments of dead and dying cancer cells. The reason we believe this is significant is because there are large companies that have invested a lot of money in ctDNA processes. For example, Foundation Medicine was acquired by Roche for $5 billion. They focus on circulating tumor DNA. Guardant Health with market capitalization of about $6 billion focus on ctDNA. Grail, market cap $2 billion, focus on ctDNA. Natera, market cap $20 billion, focus on ctDNA. Exact Sciences have got a developing business in ctDNA, market cap $9 billion. All of those companies are focused on ctDNA, dead and dying fragments of cells.
What we wanted to do is find out whether there's additional information that comes from CTCs. Indeed, the hypothesis that we set out on this slide is proven to be correct. Ct DNA will tell you what has happened. We'll tell you what DNA is shown in dead cancer cells that may have been killed by the immune system, or they may have been killed by the drug process. Actually, you get some DNA which is present in ct DNA and CTC DNA. Those are active variants which have been partially killed, but not completely. There's very, very interesting information, which is prospective information on how the cancer is evolving. That comes from information that you can find on circulating tumor cells, the living cancer cells DNA, which is not present on the ct DNA. This is very, very significant.
We believe that that shows how the cancer is proactively developing. That is the critical thing because it is the development of the cancer which ultimately, if the patient is unlucky enough to die of cancer, it is that change and evolution which kills the patient. That is what the doctors at the present do not have information on to guide treatment decisions. What we found in our analysis of 47 patients in breast, lung, ovarian, and prostate is that in all the patients, there were patients positive for good DNA detection. We found CTC information in 90% of breast, lung, and 70% in ovarian and prostate.
What's critically interesting is in the far right column here, which is that we found important DNA variants in the living CTCs, which were not in the ctDNA, in 70% of breast and lung patients and 60% of ovarian. Prostate was somewhat lower at 20%, but we think that's because the genes that we were measuring were not particularly prostate specific. That can be improved. Now, the kinds of genes that were found are really important. If you look at the table on the right-hand side of this slide, what you see there is DNA variants which are actionable if they're found in tissue or plasma, the ctDNA, such as PIK3CA, EGFR, ESR1, etc. These have already got targeted drugs associated with those DNA variants from market-leading, and these are billion-dollar drugs.
These are very, very large drugs already in the market from the likes of Novartis, AstraZeneca, Menarini, Roche, Genentech, and so forth. What we believe here is that every single one of the ctDNA companies that I mentioned just before could extend their analysis to do dual analysis looking at ctDNA and CTC DNA from the same tube of blood using the exact same sequencing techniques that they already use for ctDNA. It is a question of the same tube of blood from the patient providing two analytes which provide additional and complementary information. We hope that all of those companies will, in time, look at extending the analysis that they do to cover circulating tumor cells. To do that, they have to use our Parsortix system.
It is bigger than that because each one of these large pharmaceutical companies has the opportunity to extend the market for their drug. If they are missing patients, for example, if Menarini with its drug for ESR1 is missing patients that are ESR1 positive by CTCs, then that represents an additional revenue stream for that drug. In time, we would expect all of these large pharma to look at running clinical studies with our system in order to assess the clinical utility of extending their label based off CTCs, not just tissue in terms of selection of patients. We see that as a really big opportunity for the future. This is my final slide before questions. We believe that ANGLE is extremely well differentiated in the market.
That's a very large market which independent analysts have assessed to be worth $100 billion per annum in the United States alone. You can travel that for the global market. What we're offering is the ability to obtain intact living cancer cells, not just fragments of dead cells. We have a patented position. We've granted patents worldwide. We're the only FDA and EU-approved product-based solution for doing this work. The product itself is relatively low cost and offers us a high margin and has a wide flexible use across multiple different cancers. We expect to see in due course it becoming standard companion diagnostic needed by most of the large pharma, if not all of the large pharma in the future.
Another thing that's very worth pointing out is there have been independent studies that have shown that the presence of circulating tumor cells is a lead indicator for the medical assessment of cancer progression. If the patient is going to stop responding and start having cancer progression, a blood test using Parsortix will find CTCs ahead of there being any clinical evidence which can be found by the doctor. It can enable quicker response and getting ahead of the cancer development rather than lagging behind it. The final point is I mentioned antibody drug conjugates. There are several other types of drug which are specifically targeting proteins on cancer cells. That's how they work. Therefore, they have to know what is the protein expression on those cancer cells.
Presently, there's no way of doing that other than going back to the historic tissue biopsy, which is fundamentally out of date and no longer gives a very accurate picture. That's the best that they have at the moment. Thank you very much. Can we move to questions?
Wonderful. Thank you, Andrew. We welcome Ian. We have a few questions concerning your location. I guess you are running a Glioblastoma Drug Development Summit in Boston. Some of our viewers are curious what you are finding with that summit today.
Oh, thank you. Yes, we have a pretty senior team, actually, from ANGLE in Boston at the moment at the Glioblastoma Summit. In fact, we've got our Chief Commercial Officer, Chief Scientific Officer, and our Senior Director of R&D who are all there. The reason is that it's a very specific medical need. Brain cancer is a cancer that you can't do a tissue biopsy unless you're surgically reducing the tumor and cutting it out, which would obviously provide material. You can't just do a biopsy. It's too dangerous. Up to 40% of patients have no biopsy to guide their treatment. Doctors are desperate to find out information about how to treat those patients. It used to be thought that it wouldn't be possible to get cancer cells. It's not possible to get ctDNA with very successful results.
It used to be thought CTCs would be very difficult. A number of our collaborators have demonstrated using Parsortix that you can recover CTCs from patient blood. Our aim of being there is to actually have our senior team engage with leads from some of the biggest pharma in the world who are also interested in developing drugs for that market.
Wonderful. Thank you. Our viewer asks, can you explain the different goals and define them? The procedure costs, maybe some product revenue, the machine, and the service? If you could explain that.
I didn't hear that very well. Ian, do you want to cover it?
Yeah, you broke up while you were speaking, Anna. I don't know where the connection's slightly faulty. Could you repeat it, please?
Sorry about that. Yes, are you able to explain the different goals? If you can, what does the cost and maybe the revenue?
I only heard about half of that, but it sounds like it's asking a little bit about the costing around the product side. Just nod if I've lost you now.
Yes.
Anyway, I'll answer. Yeah, so the business has got two main revenue streams. There's a product revenue stream, as Andrew described, the Parsortix and the cassette and other consumables. There's the pharma services, which is where the priority focus is. If I just come back to the product side, though, as we said, we sell that to leading researchers around the world who are basically delivering a leveraged R&D model for us. It's huge value for us that they investigate different cancers, different uses, and so forth. At the same time, that generates a valuable contribution towards the company. The list price for an instrument is about $70,000. Gross margin is sort of north of 80% on that. If we sell it by a distributor, we've got distributors to access territories that we're not directly involved in. They take about 30%.
We still get a 70% north of that margin for the instruments. The cassettes, it's essentially a razor blade model. For the research use, they're about $115 for a cassette. The cost of goods on that is about $15. You can see that's sort of an 87% margin, again, sort of north of 80% if it's via the distributor. For clinical or commercial use, actually, the cassette price is more around the $300, so sort of north of 90% gross margin. That's with the view that down the line, we'll be seeing a number of clinical labs will be offering CTC-based solutions. Obviously, they'll be charging a significant price on that. We want to get a commercial return on it. Whereas with the research use customers, we're getting this additional leveraged model.
In terms of the pharma services where we're prioritizing, that is, as Andrew's explained, the actual price, there's two elements. There's an assay development program that we do. That can vary anywhere between GBP 100,000 to GBP 500,000 to develop the assay. It's more expensive for a brand new assay where there's a lot of work involved. We get to keep that and add it to our menu. We've got a cost-sharing arrangement with the customer base. It's cheaper if we're doing something additional for that specific customer on an assay we already have, hence the lower range. It also means it's much faster to get that assay ready. In terms of the clinical trial support, and as Andrew mentioned, we work with customers through Phase I, Phase II, and ultimately into Phase III, which is where the significant revenues are.
That's very much on a per-sample basis. The price or the cost per sample depends on the type of downstream analysis that's being undertaken. Some of the more straightforward imaging-type assays can be the sort of lower-level, one to sort of $2,000. Some of the molecular analysis, the DNA, the RNA, or the dual analysis can be anywhere between $3,000 to $5,000, depending on exactly what is required for the customer. The costs are higher on that as well because we've got to use for the downstream analysis, like Illumina next-generation sequencing kits and then bioinformatics to do it. The costs are higher. The margins overall on the service are a bit lower than the product side of things. Again, it's generally north of 60% on those service margins.
Hopefully, that sort of, even though I only got half the question, hopefully, that has given the answer.
Great. All right. Anna lost her connection, but we're out of time anyway. Thank you guys for coming on the conference. We'll see you next time.