ITUS: An Exciting Cancer Story, Part 1

In the 1st of this two-part series, we examine ITUS’ work with its lead product, Cchek, a revolutionary cancer diagnostic. In part 2 we will look at their novel CAR-T solid tumor opportunity.

On Thursday afternoon, November 2, we added ITUS to the Tailwinds Select Portfolio. ITUS is an exciting opportunity in the micro-cap healthcare sector. The Company is led by a well-regarded CEO, is funded for well over one year, and has two product lines in development, both of which have had excellent early-stage pre-clinical and clinical results.

When considering securities for addition to the Portfolio, we consider many different factors. These considerations come together to form an investment thesis. Generally speaking, we are looking for opportunities where we believe that the upside opportunity represents multiple returns on investment dollars, and has a better than not likelihood of occurring.

ITUS represents just this in our opinion, where multiple shots on goal reduce development risks, and a strong leadership team brings a track record of success. With ITUS trading at a valuation of under $40 million, the upside opportunities dwarf the downside risk.

Using Blood Samples and Artificial Intelligence to Diagnose Cancer

When Dr. Amit Kumar became Chairman of the Company in 2016, he had a vision. The survival rate of cancer patients increased dramatically when cancer was detected early. However, most cancer diagnostics are often very expensive and invasive or, like PSA tests, quite ineffective at determining a reliable result. With the rapid changes taking place in medicine, could he develop a cancer diagnostic test that would be cheaper to run yet more effective?

Having spent a career developing early stage cancer related companies, and having worked in diagnostics as CEO of CombiMatrix for 10 years, Dr. Kumar had a deep knowledge of cancer diagnostics and the advances that were taking place in the industry. Living and working in Silicon Valley, he also was seeing first hand many of the advances that were taking place in Artificial Intelligence.

He had an thought that if a person had a tumor, it might cause some subtle changes in the person’s immune system.  The question was, could monitoring the immune system enable the identification of a tumor?  Based on new published research about the interaction between the host immune system and a tumor, he felt this was possible by measuring specific white blood cells known as Myeloid Derived Suppressor Cells (MDSCs).

Knowledge of the emergence of research into MDSCs led him to believe a new paradigm would emerge in cancer diagnostics. He thought that, with MDSC changes being associated with the presence of tumors, that there must be a way to diagnose cancer from blood samples by looking at MDSC levels. It is this foresight that has led to the development of Cchek™, ITUS’ lead technology platform.

Our understanding of MDSC cells is increasing rapidly. MDSC levels are easily determined by using a Flow Cytometer and running a few tests. The issue for using MDSC screening in cancer detection is that there are several types of MDSCs and levels can vary by patient, by cancer and by stage of disease progression. How to evaluate the lab results was the question…and where Artificial Intelligence enters the picture.

You see, there are some trends that are easily identifiable in healthcare, like increasing cholesterol leading to heart disease. We can spot this correlation easily enough. Then, there are occurrences like MDSC levels.

It is well-known that there is some correlation between MDSC and cancer, however, determining this correlation is difficult for a doctor or scientist poring over data in a spreadsheet. However, with modern technology, machine learning and big-data processing, Dr. Kumar assumed he, and his team, which included electrical engineer John Roop, could develop a model that determined an exact correlation between someone’s MDSC profile and the presence (or lack thereof) of cancer in their bodies. And, not just the presence, but maybe the specific type of cancer and its stage.

Now, it’s important to know that the Cchek™ cancer diagnostic is still developing its data set. When you are going to use AI to diagnose test results, the larger the data base of known outcomes, the better you can diagnose new data. ITUS is in the process of creating a pool of data large enough to cover the multiple types and stages of cancer that exist.

One of the interesting things about AI is that the work is never done. The more data you get, the better the results. Years from now, Cchek™ will be increasing its accuracy as more patient results are fed into the system.

But, just because the work will improve over time doesn’t mean it can’t start generating positive results now. And that is exactly what has happened so far in preliminary trials.

The results shown above are quite phenomenal. If they can be replicated on a larger scale, and in double-blind trials, ITUS will have developed a very powerful diagnostic tool that could revolutionize cancer diagnostics and screening. It appears, from a press release on Sept. 21, that they remain on track with their results an increasingly larger population of data (emphasis added by Tailwinds).

“We continue to make progress in our R&D efforts as we work with our partners, MD Anderson, U. Pennsylvania’s Abramson Cancer Center, Delaware Valley Urology, Virtua Hospitals, and others. Cchek™, which has demonstrated 91% sensitivity and specificity in a preliminary study, continues to perform at that level or better…The results of these studies to date have been consistent with the superior performance of our data in our own clinical studies. When completed, we plan to disclose the results of these studies in concert with each individual collaborator.”

It appears that Dr. Kumar’s vision of a cheap, easy to administer, yet highly effective cancer diagnostic is well on its way to becoming a reality. If ITUS’ results with its partners, and they are a strong group of partners, continues to show consistently strong results, they will have caught a tiger by its tail.

Current Diagnostics are Lacking Efficacy

The market for cancer diagnostics is huge as it exists today. And, the way it exists is incredibly sub-optimal. Cancer diagnostics employed today often are invasive and expensive like colonoscopies and mammograms, or if they are non-invasive and inexpensive, like the prostate specific antigen test (PSA), they are poorly effective.

The development of a simple, relatively inexpensive, non-invasive blood test that yields effective results across multiple types of cancers would disrupt the cancer diagnostic industry as it exists today.

As noted above, think about current cancer screens, like the mammograms. This is the current standard for detecting breast cancer in women. Yet, according to the Susan G. Komen Foundation, their effectiveness is below 90%. And, they only detect one kind of cancer, with lots of false positives.  That is one of the reasons why there is controversy over the right age (40 or 50 years) at which women should get mammograms.

Or, with men, the PSA test. Most men have their PSA tested, as a screen for prostate cancer, sometime after they turn 40. However, this could be one of the least effective tests run on patients. According to Harvard Medical, “It appears screening may be detecting a disproportionate number of lower-risk cancers, while missing many of the most aggressive tumors.”

Sadly, the only really effective method of confirming cancer is a biopsy, and this is not done until you’ve likely progressed beyond early stage cancer. Meanwhile, early detection is the key to success in treating cancer. As the survival figures below show, if you can catch cancer at an early stage, you’ll likely live much longer.

The Holy Grail of Diagnostics

In the past, getting cancer was truly a death sentence. The odds of survival for any kind of cancer was minimal. The term “I’ve found a cure for cancer” was used as a way to describe accomplishing the impossible.

Modern medicine is unbelievable and the impossible is becoming quite probable. We have developed cures for some types of cancer and great strides are being made on a daily basis. New therapies like checkpoint inhibitors or CAR-T treatments are leading to greatly increased odds of survival for cancer patients.

Yet, despite all the efforts into creating cures for cancer, the reality is, the best way to cure cancer is to catch it early. And, there just haven’t been any truly significant accomplishments in this regards.

Simply put, a diagnostic that can detect all types of cancer, and do so at an early stage, is truly the Holy Grail of diagnostics. Finding this is the vision of Dr. Kumar and what ITUS is looking to accomplish.

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