Theralase Technologies Inc (TLTFF)

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James West, author of the Midas Letter, just wrote an article this morning about Theralase. There is some excellent information for prospective and current shareholders.

http://www.midasletter.com/2014/02/theralase-technologies-inc-cure-cancer/

Theralase Technologies Inc: A Cure For Cancer? Written By: James West| February 24, 2014| Posted In:Top Stories
Theralase Technologies Inc: A Cure for Cancer?
Theralase Technologies Inc. (TSX.V:TLT) (OTCMKTS:TLTFF) (FRA:TXT) has a simple value proposition: a cure for cancer. If there is one thing that might be considered the most valuable and important discovery in this century, it is without doubt a cure for cancer. There is no one who has not been affected in some way by the most lethal disease of our lifetimes. My grandfather died of prostate cancer, my grandmother of lung cancer, my uncle of prostate cancer when he was in his early 50s.

Listen to the interview with Theralase CEO Roger Demoulin-White:
00:00 00:00

And the pretenders to this holiest grail of the life sciences have been legion. To date, the results have been dismal at best. In an era when deaths from cancer are expected to rise dramatically, the lack of progress is nothing short of alarming.

The number of people who are qualified to analyze and verify the data are obviously few in number, and so I certainly don’t make any claims of being capable of assessing Theralase’s technology.

My rationale for participating in this company as an investor is straightforward:

If it works, it will be huge. If it doesn’t, then I take that risk willingly and on a calculated basis, knowing I could lose my money. But it’s the possibility this company represents that excites me, albeit cautiously so.

The Rise of Photo Dynamic Compounds
The essence of Theralase’s cancer treatment is a class of drugs called Photo Dynamic Compounds (PDCs). These are drugs which, when exposed to very specific types of light, become active in destroying cancer cells. The process is marginally invasive, in that the only invasiveness to tissue is the introduction of the light source, typically through a optical fibre.

The PDC is introduced to the organ or area of the body where the cancer has localized and then once absorbed into the cancer cells, the PDC is activated by light from the optical fibre. The PDCs become ‘cytotoxic’ (cell destructive) when activated by the light sources in the presence of oxygen. The Theralase PDCs have the added unique ability that they are able to be cytotoxic not only in the presence of oxygen, but more importantly in the absence of oxygen, where cancer cells are known to thrive.

Tumour induced in animal (BALB/c mice ) with tumour reaching 5.0 ?0.5 mm in size.Mice have survived 20 months cancer free after only 1 PDC treatment (Essentially the rest of their natural lives)
Tumour induced in animal (BALB/c mice ) with tumour reaching 5.0 ?0.5 mm in size.Mice have survived 20 months cancer free after only 1 PDC treatment (Essentially the rest of their natural lives)
According to the company’s recent press release:

Theralase Technologies Inc. reported today (February 13, 2014) that a recently published scientific paper demonstrated that its new family of Photo Dynamic Compounds (PDCs) has been proven to significantly destroy 2 types of bacteria (Staphylococcus aureus (S. aureus) and Methicillin Resistant Staphylococcus aureus (MRSA)) in low oxygen atmospheres. The results are considered pivotal because the Theralase PDCs efficacy has been validated in both normal and low oxygen environments. Since the Theralase PDC platform technology is able to be used in both bacteria and cancer destruction, the described technology is offering a new paradigm for destruction of low oxygenated cancerous tumours. (Photodiagnosis Photodyn Ther. Dec;10(4):615-25).

“The ability for the PDC technology to be effective in low oxygen environments is considered to be an essential factor in the recurrence and progression of non-muscle invasive bladder cancer. This form of disease represents up to 75% of newly diagnosed bladder cancer cases accounting for more than 386,000 cases and 150,000 deaths annually worldwide,” said Dr. Arkady Mandel, Chief Scientific Officer of Theralase Inc.

Dr. Mandel continued: “The abnormal decrease or the lack of oxygen supply to cells and tissues is called hypoxia and commonly presents in solid cancers, such as brain, bladder, breast, lung and prostate. Hypoxic cancers are extremely aggressive, resistant to standard therapies (chemotherapy and radiation therapy), and thus are very difficult to destroy. Tumor hypoxia is known to play a role in cancer metastasis (spread) and resistance to therapy, as well as the ability of cancer cells to escape destruction by the immune system.

The evidence supporting the Theralase PDC technology represents a potential solution for hypoxic cancers. In our work, we described a family of Theralase PDCs that have shown an ability to switch their photoreactivity from a Type II reaction (oxygen dependent) to a Type I (free radical mediated) reaction. This is strategic to the Company in that a Type I reaction is unique and opens the opportunity of using the PDCs beyond sterilization and the treatment of superficial cancerous lesions to the treatment of harder to treat hypoxic tumours”.

All very well and good, but what has been the reaction in the scientific community?

Peer Review Process Validates Theralase
There have been three peer reviewed papers published that validate the company’s statements of efficacy in these compounds’ ability to annihilate bacteria, viruses and cancer cells. One, by the American Society for Microbiology, published in February 2013, concluded:

“There is a recent recognition that Ru(II) (Ruthenium compounds) complexes might prove useful as Photo Dynamic agents, particularly for virulent strains of infectious disease including gram-negative pathogens, owing to their intrinsic cationic charge. However, these Photo Sensitizers (PSs) will continue to suffer from the inability to destroy microbial targets at low oxygen tension, and since precise knowledge of oxygen tension in a wound, for example, is not possible, the best PDI agent will be one that can function regardless of oxygen tension. In this report, we have demonstrated that it is possible to instill Type I activity into a simple mononuclear Ru(II) complex using principles derived from coordination and materials chemistry. This activity was outlined in Staphylococcus aureus (S. aureus or SA) and Methicillin Resistant Staphylococcus aureus (MRSA) in hypoxia, and proved to be as effective, or more effective in some cases, than normoxia. Equally important, the TLD1400 series is active at concentrations of over 3 orders of magnitude lower than the gold standard PS Methylene Blue (MB). This photodynamic potency applies to bacterial cells and cancer cells alike, and therefore, represents a new paradigm for designing Type I PS using Ru(II) that extends to other clinical applications.”

Note that the press release quoted previously addresses the concern of the “inability to destroy microbial targets at low oxygen tension”.

In another published paper The Royal Society of Chemistry stated

“To improve the effective elimination of tumours by Photo Dynamic Therapy (PDT), PSs with a range of 10 photophysical and photobiological attributes must be developed, including: specific cellular and subcellular targeting, maintenance of high cytotoxic load in oxygen-depleted environments and activation by light with necessary penetration depths, but sufficient photon quantum energy to produce cytotoxic Reactive Oxygen Species (ROS). Thus, an ideal PS should be a chemically pure compound with high tissue and cellular selectivity that (i) exhibits long wavelength absorptions preferably at wavelengths (>670nm) to provide larger tissue penetration depths (e-1 attenuation depth), (ii) possesses a short injection to light time interval (drug-light interval), (iii) has low dark toxicity, but strong photo cytotoxicity, and (iv) rapidly clears from the system.

This precisely describes Theralase’s TLD1400 series PDCs.

Breakthrough Status
All this is good news. From an investment standpoint, the sooner this gets to human trials, the sooner we see results for human cancers and the sooner we might realize a return on investment.

During an interview, I asked how long that process might take.

According to Theralase CEO Roger Dumoulin-White:

“Well, that specifically depends on the regulatory approval authorities like Health Canada and the Food and Drug Administration (FDA). The FDA, to their credit, has in July of 2012 created something called Breakthrough Status. This is in addition to their “Fast Track” approval that they have had in place since 2002 to encourage research and development into therapies and potential cures for orphan diseases (less than 200,000 individuals afflicted with the disease) In the United States, the Rare Diseases Act of 2002 defines rare disease strictly according to prevalence, specifically “any disease or condition that affects less than 200,000 persons in the United States,”[2] or about 1 in 1,500 people. This definition is essentially like that of the Orphan Drug Act of 1983, a federal law that was written to encourage research into rare diseases and possible cures.1 So “Fast Track” approval allows pharmaceutical and biotech companies a faster route through the FDA process in order to develop drugs or technology that could work on conditions that are not as common.

But in July of 2012, they came out with what’s called Breakthrough Status, which provides an even faster route through the regulatory quagmire. With Breakthrough Status there are three conditions that must be met to achieve this approval:

1) The treatment must treat a deadly disease and clearly cancer qualifies in this definition.

2) Existing therapies have not been able to effectively treat the condition. Bladder cancer has not had any new drugs approved for it for over 15 years, so progression in the destruction of this disease has stagnated.

3) Demonstrate safety and efficacy data, which is a substantial improvement over existing therapies, even on a small population.

On July 9, 2012 the Food and Drug Administration Safety and Innovation Act (FDASIA) was signed. FDASIA Section 902 provides for a new designation – Breakthrough Therapy Designation. A breakthrough therapy is a drug:
• intended alone or in combination with one or more other drugs to treat a serious or life threatening disease or condition and
• preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development.
If a drug is designated as breakthrough therapy, FDA will expedite the development and review of such drug.

For more information, see:http://www.fda.gov/regulatoryinformation/legislation/federalfooddrugandcosmeticactfdcact/significantamendmentstothefdcact/fdasia/ucm341027.htm

So a small Phase 1 / 2a clinical trial, which was successful in demonstrating the safety, tolerability and efficacy of the treatment could potentially qualify for Breakthrough Status.

If the company was granted Breakthrough Status, the FDA works hand in hand with the company to minimize the time to commercialization to a bare minimum.

“So if all the stars are in alignment,” continued Demoulin-White, “after completion of our preclinical research this year, successful completion of our Phase 1 / 2a human clinical trial in 2015, and we are lucky enough to successfully petition the FDA to achieve Breakthrough Status, our PDC technology could be available to treat patients suffering from bladder cancer by early 2016.

If we were not able to achieve Breakthrough Status, we would still be eligible for Fast Track approval, which even with a Phase 2B or Phase 3 clinical study, would only delay commercialization an additional two to five years.

In parallel to this strategy, we would be actively looking for a co-development partner, most likely big pharma in order to aid in the distribution of this revolutionary technology to locations throughout North America and in due course the world.

So there are a number of different commercialization strategies that will depend on FDA regulatory approval status, but the fastest path to commercialization would be achieved if we were successful in being granted Breakthrough Status, allowing us to introduce the technology commercially almost immediately; however, if we were not successful on this front, we could elect either to raise more capital in order to complete further clinical studies or execute a co-development agreement with big pharma to allow them to partner with us through to commercialization.

So the answer to your question really lies in what the regulators decide, , if they support us two years from today on the shortest timeline, if they request more data up to seven years on a longer timeline.”

That is, if the company isn’t taken out in an acquisition sooner. Valuations for companies with effective cancer treatments are substantial.

Big Pharma is on the Hunt
Major biotechnology and life sciences companies are always on the lookout for promising therapies in the cancer space.

Reuters reported February 17 that Novartis AG (NYSE:NVS) stated it will buy U.S.-based CoStim Pharmaceuticals Inc., a privately held biotechnology company focused on harnessing the immune system to eliminate immune-blocking signals from cancer, for an undisclosed price. The Swiss drugmaker said the move follows increasing evidence pointing to the role of the immune system in controlling cancer.

The table below shows a sampling of pharma deals in the last few years:
TLT_Pharma_Deals

Theralase Therapeutic Laser Platform Technology:
As if a cure for cancer wasn’t enough to carry this company to a touchdown for life sciences investors, almost equally substantial in terms of impact on future revenues is the company’s laser treatments for pain that is already in wide spread use. Theralase has over 800 of these systems installed and in use in Canada, and over 400 more in the U.S. and internationally.

The product is the TLC-1000 Cold Laser System, which Theralase has developed over 17 years and has been based on solid clinical research. There have been over 1 million patients successfully treated and thousands of Theralase lasers have been sold to health care practitioners around the world.

According to the company’s web site:
The Theralase super pulsed laser system can penetrate up to 4? into tissue, to promote cellular regeneration at the source of the injury and is the only laser on the market known to activate all three cellular pathways. www.theralase.com

Theralase is migrating the business from a one-time capital equipment purchase model, where they sell the units for a one-time cost in the $16,000 range, to a recurring revenue model, where they will lease the units to health care clinics, hospitals and practitioners for $500 per month, in perpetuity. With each unit generating on average, $10,000 a month for its customers, the new model is expected to substantially increase its market share for such devices worldwide.

The company is targeting $6.6 million in annual revenue from the first 400 such devices placed, providing a 20X return on investment for its clients.

2014 is the Year of Expansion for Theralase
The company has an ambitious year planned. Targeting the $100 billion annual US market for pain mitigation, Theralase will launch its next-generation patented TLC-2000 therapeutic laser system in the fourth quarter of this year.

It plans to launch sales offices in Calgary, Vancouver, New York, Los Angeles, Tampa, Chicago and Houston in 2014 and 2015 and will deploy an aggressive sales strategy seeking to displace competitive technologies in these markets with its superior products and revenue structures for clients.

Conclusion
Theralase is thus far under the radar of major pharmaceutical corporations, but with the recent breakthroughs in its PDC therapies in low-oxygen environments, the lid is coming off this story quickly. The company’s serious potential is offset by the normal risk associated with an earlier stage therapy like the TLD-1400 series of compounds, that of proving their safety and efficacy in human clinical testing.

On the plus side of their potential success is that there have been two previously FDA approved PDC drugs; specifically: Aminolevulinic Acid (ALA) and Photofrin®, which have been FDA approved for actinic keratosis (Rough, scaly patches of skin that are considered precancerous) and esophageal cancer, respectively. Theralase to their credit has tested their new TLD-1400 series of PDCs against these two FDA approved drugs and have demonstrated in documented scientific research that they are 668,000x more effective than ALA and 198x more effective than Photofrin®, while delivering a treatment with virtually no side effects. This bodes well for a successful Phase 1/2a clinical trial. The second plus in their corner is that their TLD-1400 series of drugs are nuclear acting, meaning that they enter cancer cells and lock onto the DNA of the cell, unlike ALA and Photofrin®. When light activated, this new class of PDCs destroy the cancer cell by what is called apoptosis or natural cell death, basically the cell dies of natural causes. The beauty of nuclear acting drugs is that it doesn’t matter if the cancer cell came from a mouse, an ostrich, a dolphin or a human, they are all destroyed with the same efficacy and safety profile, as these are all mammallian cells, known collectively as eukaryotes.

So the multi-billion dollar question is not what if the Theralase technology doesn’t work as well on humans as it does on mice, but more appropriately when will Theralase deliver us positive clinical study results.

1 Wikipedia – Rare Disease

2 US Department of Health and Human Services