ITUS, CEO Update Interview

Last week, ITUS reported data on a study of their novel cancer diagnostic, C-Chek. I had the opportunity to check in and discuss this data, and other corporate developments, with the Company’s CEO, Dr. Amit Kumar.

Tailwinds (TW):  Lets get this question addressed first…ITUS recently filed a proxy, where you are asking for an increase in the authorization of stock. Can you comment on that?

Dr. Amit Kumar (AK): Sure, and thanks for asking that first. This is a really exciting time as we complete our transition to a novel, cutting edge biotech company. Authorizing additional shares is a natural progression in the growth of our company.  However, it’s important to note that an authorization of stock does not mean we are issuing the stock. It simply means we will have that flexibility should we decide to issue more shares in the future.

If we do decide to issue stock in the future, it may be done for a number of reasons which we detail in the proxy, but those reasons could include things outside of financing, such as acquisitions, issuance to corporate partners if they chose to make an investment as part of a corporate partnership, and many other reasons. Today, we have no specific plans for the additional stock; we are simply positioning the Company for success.

TW: You just released data on C-Chek. Can you discuss the importance of the data and what the next steps are in the product development timeline?

AK: Yes, we issued the latest data from our study at the ASCO/SITC Conference last week. The data was spectacular and confirmed the earlier data we had released last year in our preliminary study. The recent study involved over 160 patients, about half of whom were cancer patients of different types and different stages. In our last study, we were focused on understanding how broad our technology was, so we tried multiple types of cancer and we had just started using artificial intelligence (AI) for the analysis. In the current study we focused primarily on breast and prostate cancer, though we also tested some other cancers. Most importantly, we refined our AI.

We have now demonstrated that our technology can identify up to 20 different types of tumors, even though for some types we have only tried a small number of samples. I am not aware of any technology being developed that is as broad as ours. I also think that our technology will be able to identify virtually any tumor in the body because we are monitoring immune function, which is modulated regardless of the location of the tumor.

Another key point is that the critical nature of our artificial intelligence. We have all heard about how AI is used in fields such as facial recognition, autonomous driving and other things. AI is just as powerful with our data. In fact, the AI is able to better analyze our complex data than any human being. It’s quite extraordinary how well it performs, and we expect it will continue to get better.

The last key point I want to highlight is that now we have a pretty good understanding of all the reagents needed to run a test as well as how much technician labor will be involved. Therefore we think this test can be priced in the vicinity of $200 per test, which would make it a significantly less expensive than any other test on the market and could lead to very broad usage.

The second part of your question regarding next steps is important. Since our plan is to take this through regulatory approval, it’s important to understand the process and uncertainties. Before we take it to a regulatory agency, we need to choose the first tumor-type on which to focus. We also need to perform studies on benign conditions. For example, with prostate patients, we need to see if conditions such as benign prostate hyperplasia, also known as BPH, interferes with the test. BPH is a common condition of elderly men that can cause pain and urination problems as well as increased PSA scores, but it’s not a malignant cancer. Therefore, we want to see if our test can tell the difference between BPH and Prostate Cancer. There are corresponding benign conditions for all types of cancer. These studies are going on now.

In addition, we have to finalize all protocols and train our Neural Network with final training data sets. After that we can have appropriate discussions with the USFDA and other regulatory bodies. I hesitate to put a detailed timeline on this process because a major factor on speed is going to be one or more partnerships we hope to consummate, and the strategy regarding the first tumor type, the regulatory plan, etc. will be guided by the partner. But, I want to highlight that although we will go as fast as we can this is medical research and things will not happen overnight.

TW: Johns Hopkins released data on a competing cancer diagnostic two weeks ago. Can you discuss what they, and other circulating tumor DNA (ctDNA) researchers, are doing and how that compares with C-Chek?

AK: The JH study was well done, and looked very promising. They demonstrated that by analyzing DNA and protein markers, they could get very good performance for their early detection technology. The research team was comprised of stellar, well known scientists, and I was pleased to see how much press the publication got. It shows that the world is ready to embrace early detection of cancer as a way to battle this scourge.

The underlying technology they used and circulating tumor DNA sequencing tech in general, are very promising technologies. A tremendous amount of money has gone into ctDNA technology in the form of research grants to academic groups like the one at John Hopkins and in the form of investments into the private sector. The primary driver enabling this technology is the dramatic cost reduction that has occurred in DNA sequencing over the last decade.

That being said, sequencing costs are still too high to make these technologies broadly commercial today. But there are ways to reduce these costs such as only sequencing certain regions, and not performing deep sequencing. Unfortunately, some of these short cuts can lead to challenges.

For example, in a recent report published a little over a month ago, another team at Johns Hopkins took a blood sample from a prostate cancer patient, split it in two, and sent the sample to two commercial labs that were expert in DNA Sequencing. The results should have come back identical or at least similar. In fact, they were quite discordant, prompting the researchers to indicate that they would have managed the patient differently, depending on which lab they believed.

The point they made, with which I agree, is that ctDNA, while very promising, is still too early in its development for broad clinical use for early cancer detection.

In addition, for ctDNA to be used broadly for early cancer detection, we need to understand the mutation profiles of different types of cancer. We know that cancer is not a single disease. Even a single type of cancer, such as breast cancer is multiple diseases, and each one can have very different mutation profiles. Our industry is rapidly sequencing tumors in an attempt to understand mutation profiles and other genetic variations linked to cancer, but there’s still years of work left to complete this sequencing.

Thus, to summarize my comments about the JH study, it is great research, a very promising technology, and it was great to see it gain a lot of attention, however it is far from ready for market. With even more impressive results on a broader array of cancers, I can hope that our technology gets similar attention. Eventually it will, but today we are a small company that is not as well known as Johns Hopkins University.

TW: With the clinical success shown to date as well as the recent acquisitions of KITE ($12B) and JUNO ($8B), CAR-T has become a very exciting space. Solid tumor is a larger market than those guys are approaching, however, to date there have been no successful CAR-T programs going after solid tumors. Can you talk about what excites you about your approach to CAR-T, your development timeline, and why you think it could be successful?

AK: To understand why we think our CAR-T approach will work with ovarian cancer, one has to understand the main reason CAR-T has worked with B-cell cancers. B-cells are a type of white blood cell that carry a protein on their surface designated CD-19. CD-19 is exclusive to B-cells, it does not show up on other cells. Thus, a CAR-T cell that is engineered to recognize that protein and kill the corresponding cell, will kill only B-cells and not attack other cells because no other cell in the patient carries CD-19.

For other types of cancers, like solid tumors, researchers have not found a protein that is as exclusive as CD-19; they have identified proteins that might be highly expressed on a solid tumor cell, but they are often found on other organ systems as well, so a CAR-T engineered to go after that target protein often will attack other organs.

In our case, we have identified a protein that is found exclusively on ovary cells in adult women. Also, this protein, called the Follicle Stimulating Hormone Receptor, has a cognate hormone that can be engineered onto the CAR-T. This hormone-receptor combination is a unique target-binder combination that we will utilize to attack ovarian cancer. Therefore, we believe our CAR-T therapy will only be effective on the ovaries and not on other, healthy organs.

This was demonstrated at Wistar and what we are looking to replicate on a larger scale at Moffitt. We will know the results in about two years, and it will cost us roughly one million dollars over that time. Should it work, this roughly 1-million-dollar program could be worth billions.

TW: Clinical success is expensive to achieve. ITUS has a very novel strategy around product development and funding. You recently canceled your ATM offering and suggested that any funding could be obtained through strategic partnerships and other corporate transactions. Can you discuss your funding strategy and what investors might expect in this regards?

AK: That is a good question Dan. I get that all the time, because most biotech companies are often judged by their programs and how much money they have and will need. While we are executing a very unique, capital-light business model, I don’t want people to think we do not need money. We have plenty of capital for the near-term future, but we will certainly require more. The key question is whether we get that capital from financings or partnerships, or in a combination. Most likely it will be a combination. We terminated our ATM because we do not need immediate capital, and we are hoping to consummate one or more partnerships. The results we released at ASCO/SITC this past week should be helpful in this regards, however, one should never count on a partnership until the documents are signed.

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