On March 5th, ITUS announced an alliance with Serametrix Corporation in which the power of Cchek™ would be paired with Serametrix’s substantial expertise in immune monitoring assays. Despite the fact that shares in ITUS rallied almost 20% on this news, I believe the full significance of this partnership is underappreciated by the markets.
In the words of Dr. Kumar, CEO of ITUS, “There is potential for tremendous synergy from the complementary expertise of ITUS and Serametrix.”
In my opinion, these synergies will become most visible in two important ways. Through this collaboration, ITUS effectively adds a new and major market opportunity. At the same time, Serametrix’s agreeing to work with ITUS should provide investors with increased confidence in the efficacy of Cchek™.
I’ll dig deeper into both of these takeaways in a minute, but, first, a little about Serametrix.
Serametrix: a bounty of MDSC data for ITUS
Serametrix provides solutions to the problem of monitoring patients who are enrolled in clinical cancer trials. What this means is that they have been engaged in many cancer trials over quite a few years. Through these engagements they have taken blood samples from many, many cancer patients.
Essentially, this was done to monitor patients response to therapy and perhaps identify signals that could distinguish responders versus non-responders. How do you measure responders? Perhaps by looking at MDSC levels; when a cancer drug is effective, there is often a marked decrease in MDSC levels.
Over the years, Serametrix has accumulated MDSC data on thousands of cancer patients. Importantly, they also know the type of cancer and the stage of the cancer for each of these patients, although most of these patients have had certain therapies tried on them. Through this partnership, this data will become available for ITUS to plug into their AI engine.
It’s possible that Cchek™ has already been proven effective by Serametrix
I mentioned a new market for Cchek™ opening up with this collaboration, but first let’s discuss why I think Serametrix agreed to collaborate with ITUS. It’s quite simple; because Cchek works.
It is the opinion of this author that Serametrix would not have partnered with ITUS unless they had already extensively tested Cchek™ on some portion of their their existing database of cancer patients. Let’s examine what Henry Hepburne-Scott, VP of Business Development of Serametrix, stated in their joint press release.
“We believe that the application of ITUS artificial intelligence will add value to our unique and proprietary MDSC monitoring technology and we are looking forward to exploring novel opportunities with our extensive network of academic and commercial partners.”
There is no way that Serametrix believes Cchek™ adds value without having back-tested it on their database. It just doesn’t make any sense because it’s certainly easy enough to run the historical data through the AI algorithms. Especially since they are intending to offer a product out to their network of commercial partners.
Serametrix offering a joint product to their clients will definitely be a positive for ITUS in that it could start generating revenue in the not too distant future. However, I believe the large implication is that this demonstrates that Cchek™ has now demonstrated its effectiveness. As such, the consummation of this partnership has significant meaning to ITUS.
In addition, as Dr. Kumar has stated before, ITUS’ business model is to establish partnerships to build its business. Just like they have partnered with academic institutions to perform their R&D alleviating the need to hire expensive physicians and scientists and build out expensive laboratories, the Serametrix partnership enables them to leverage Sermetrix’ extensive relationships and business development capabilities, without having to hire that expertise internally. While we do not expect things to happen overnight, we expect this partnership will enable ITUS to reach out to many potential partners.
Moving beyond cancer screening; other large markets await
“We believe that the additional capabilities provided by the Serametrix alliance will allow ITUS Corporation to expand the commercial opportunities of Cchek™,” Dr. Amit Kumar, CEO.
To date Cchek™ has been developed as an early cancer detection technology including a cancer screen. It has shown great, albeit early-stage, results in this field. ITUS has stated that they expect to partner with someone on developing this product and it’s quite possible that we’ll see something in this regards at some point in 2018.
However, the Serametrix partnership appears to open the door on other possible markets for Cchek™. As it is used to help companies determine, as Serametrix does, the responders to medications, one can imagine a whole new industry opening.
It is quite possible that Cchek™ will allow Serametrix to help their clients, who are the major cancer-related pharmaceutical and biotech companies as well as key academic centers performing cutting edge therapeutic trials, to start determining when a medication is working much sooner. This will enable them to adjust trials on the fly, saving them lots of money in their clinical trials; and possibly saving many lives. This would make the product very attractive to any drug company in a clinical cancer trial.
Taking this one step further, it might be possible that Cchek™ will be able to pre-determine responders. Imagine if a drug company could determine the ideal patient population prior to starting a trial. Trial success would be greatly enhanced, and we’d see yet another advance in the field of personalized medicine. I think it’s safe to say that this would be a huge development.
What to look for from ITUS
Shares in ITUS made a huge move into data at ASCO, and the JP Morgan Conference. Since then, they made a (reasonable) technical retracement of the move and have since based. They now look poised to move higher.
Meanwhile, there are several potential catalysts on the horizon for ITUS.
- Development of a product in conjunction with Serametrix and first customer. Due to the inherent difficulties in dealing with FDA approved trials, this could take several months, but expect a first client prior to the fall.
- A partnership with a diagnostics company on Cchek™. As per their model, ITUS will look to bring in someone to help them take Cchek™ to the next stage of trials. This could also be accomplished in the next few months.
- News out of Moffitt on their CAR-T therapy. The trial on this novel therapeutic is just getting started; expect to hear some update in the next few months.
As with every biotech company, success is determined in the lab. ITUS has several potential catalysts in front of themselves. The efficacy of Cchek™, and their CAR-T drug, will ultimately determine whether or not these catalysts occur. With the announcement of their partnership with Serametrix, I believe that, as far as Cchek™ is concerned, we are seeing success and the aforementioned catalysts will be achievable by ITUS in a reasonable time frame.
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