OptiScan Imaging (ASX:OIL) Presentation, FNN Online Investor Event, August 2020

Company Presentations

OptiScan Imaging (ASX:OIL) Executive Chairman Darren Lurie presents on the company's handheld confocal, endomicroscopes that provide instantaneous, virtual, biopsy-like images for human cancer screening.

Thanks, Clive. It's our first time on the network, so it's a pleasure to talk to everyone today.
OptiScan is a Melbourne-based developer of handheld confocal, endomicroscopes. You can see an image of our clinical device on the screen there, which I'll talk to. But what our technology does is that it provides instantaneous, virtual, biopsy-like images for human cancer screening and surgical margin detection. Really importantly, what it does is it reduces or takes away entirely the need for scalpel biopsies.

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Just quickly, on our corporate structure. We have a market capitalisation of just under $25 million. We have a board of three, including myself. Actually, two of our major shareholders are also board members. For the June quarter, we were cash flow positive taking into account both our operating cash flow, as well as our financing of our R&D tax credit for the quarter.

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So just what is it that's unique about our technology? Our team has successfully miniaturised a traditional desktop confocal microscope, which is a type of microscope that is probably about a half of everyone's dining room table. Then what we've done is to miniaturise that into a probe with a diameter of less than five millimetres.

These confocal microscopes are found in nearly all major research laboratories around the world, and it's this miniaturisation that is both world-leading and patent-protected. What this miniaturised probe does is, by touching the tip against the tissue of interest, it provides that virtual biopsy-type imaging.

In our two key applications, one in oral cancer screening, that delivers clinicians the ability to reduce the number of biopsies or scalpel biopsies they need to take, as well as to make those biopsies more targeted. And in surgery, what it allows our surgeons to do is to take the tumour out and then, at a microscopic level, image around where the tumour has been removed, to determine, has all the cancer been taken, almost on a cell-by-cell basis, reducing the need for repeat surgery and reducing the need to remove healthy tissue from surrounding where that tumour has come out.

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This confocal and miniaturised confocal technology as paraded into both our laboratory device, which you can see on the right hand side. And there you see on the, on, sorry, the laboratory on the left hand side, and on the right hand side is our InVivage® clinical system. In both cases, we have the miniaturised probe and in order to capture an image, we touch the tip of that probe, which including a sheath in our clinical device, has a diameter of 4.7 millimetres. For our laboratory device, it's actually a bit smaller. It's about four millimetres without the sheath.

On the right hand side, you'll also be able to see that the button controls on the probe itself. That was a really important development for us over the past 12 months, where in response to clinician feedback and in particular oral medicines specialist feedback, they said to us, they need to be able to control the whole system with one hand, and so we developed that for them. And they're now, because they may be in their practice without anyone else, and they may need their other hand for holding the cheek or the tongue of the patient. You can also see on that right hand side, our screen display, and I'll talk to that a little bit more in the upcoming slides.

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As far as the applications for our devices, so we have two current clinical applications that we're pursuing, one in oral cancer and the other in breast cancer. And the third clinical application with OptiScan's technology is in relation to neurosurgery, or more particularly brain cancer, where we have a cooperation agreement with Carl Zeiss Meditec. And now our OptiScan technology is incorporated into their CONVIVO device. I'll talk to each of these applications more in the upcoming slides.

On the preclinical, or for our laboratory product, the FIVE2 ViewVivo®. So this is a product focused on laboratory and translational experiments, and our typical customers here are medical research facilities and universities. We have a number of distributors located offshore and in markets such as China and the United States.

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Great. So in relation to the first application with our InVivage® clinical device of oral cancer, we can see here that there's over 350,000 oral cancer cases per annum, worldwide, and nearly 190,000 deaths per annum as well, comprising about 2% of all cancer cases, and unfortunately deaths worldwide as well.

But the application for our device in oral cancer is actually much greater than this, and that's because approximately 5% of the world's population will at some point develop a lesion in their mouth, but only 3% of these cases will ultimately become cancerous. So there's a critical need for a non-invasive form of screening, because to be taking scalpel biopsies of all of those patients can have significant impact on patient welfare, as well as the hospital system. It's also a disincentive for people to come in and get screened for oral cancer as well, which we'll see a bit later on can lead to quite dire consequences from both a mortality and morbidity perspective. We can also see in this slide, just the high proportion of cases in Asia, which is one of the markets which we intend to pursue for our device.

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So two of the key markets for us, and fairly typical for medical device companies are the United States and China. In the United States, there are 900 specialist cancer centres, and 9,000 oral and maxillofacial surgeons. So the market for us is very large in the US.

Similarly in China, as you might expect, there's a very large market. In China, there are 48 public dental hospitals, and in Guangdong province alone, there are 14 public and private dental hospitals, but there are also 158 stomatology or oral medicine departments in general hospitals, all representing the opportunity for customers for us.

Just to give, give people a relative scale of the size of some of these hospitals, you can see there one of the dental hospitals in Beijing, seeing nearly one and a half million patients per annum. So we expect that some are oral cancer centres in China will see more than a hundred thousand patients per annum. As a guide, as a hospital like the Melbourne Dental School sees about 3000 patients per annum for oral cancer screening. So many of these hospitals will represent multiple device opportunities for us, as customers.

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So I touched on briefly the importance of early diagnosis, and this has really significant impacts, both from a survival perspective, as well as an economic cost perspective for the hospital system. So we can see that early diagnosis has an almost 50% better or increase in five year survival rate for late diagnosis, and a two and a half times benefit from a cost perspective. In addition to this, even for those survivors, the treatment benefits and the long term prospects of early diagnosis are significantly better as well.

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So what we're seeing on this slide is effectively what the doctor will see. So on the right hand side, I think hopefully you can all see the white lesion alongside the side of the patient's tongue, and can see here, one, how painful a biopsy would be, and also, where does the doctor actually take the biopsy from? So in the middle of the screen, what we see here is a half millimetre by half millimetre section of tissue, from imaging with our device. We can see all the key metrics on the left hand side, and we can see where we are, you can see the representation of the button controls on the probe. And if you look closely at the image, you can actually see the individual cells and the cell nuclei in the tongue, there. And that's effectively what we're providing, is cellular level visualisation, which no other product is able to provide to the degree that we are.

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So, from a trial and study perspective, we were recently successful with a million dollar grant from the Medical Research Fund, and that grant is going to be used to fund a 150-patient oral cancer study at the Melbourne Dental School, so a study using our device for oral cancer screening. We have two ongoing trials, one at Memorial Sloan Kettering in New York, which is probably one of the top few cancer centres in the US, and another study at the Australian Centre for Oral Oncology, with one of Australia's leading dental researchers in Perth.

We have made significant progress down the pathway to seeking FDA approval. We managed to meet with the FDA in late January, just before the lockdown, and we've been continuing to exchange information with them since then, with a plan to lodge our 510(k) submission, once we've received the next batch of feedback from the FDA, which we're anticipating in September.

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So the second clinical application, which I mentioned earlier, is in relation to breast cancer, breast cancer being the second most common cancer in for women. At the moment about 60% of breast cancer surgeries are lumpectomies, and unfortunately, 20 to 30% of these surgeries require a repeat surgery, because not all the cancer was able to be taken out in the first surgery, and due to the fact that the pathology can take up to three to four days, the requirement for repeat surgery obviously adds a lot of cost to the hospital system, to the patient, not even taking into account the emotional trauma and the physical pain experienced by the patient as well.

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So what we're doing in oral cancer is, we've nearly completed stage one and two of our breast cancer trial at Western Australia's largest private hospital, and we're now looking to bring stage three of that trial to, we're in discussions with one of Melbourne's leading breast cancer surgeons, and one of Melbourne's leading hospitals.

And just to give you another indication of what breast cancer looks like at a microscopic level, you can see there on the right hand side of the slide, a cellular level imaging of breast cancer down the bottom, and normal, healthy breast tissue above that.

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So the third clinical application which I mentioned is in relation to brain cancer, our cooperation agreement with Carl Zeiss Meditec, one of Europe's largest medical device companies. We already have FDA 510(k), and CE approval for this device, and Carl Zeiss are now in the commercialisation phase of marketing this device. And some really placing commentary there from one of the US's leading neurosurgeons, talking about how this is the most exciting technology they've seen in their career.

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So just moving now to our laboratory product, our FIVE2 ViewVivo®. So we regenerated our distribution arrangements in China less than 12 months ago, appointing new distributors in Shanghai and Guangzhou. We've been really pleased with the outcome there. We've sold three systems within the last about nine months, which is really, really pleasing, and we're continuing to build out our pipeline there.

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Following these positive developments, we've made progress now towards expanding further into Asia Pacific. We've engaged Dr. Joseph Jiafu, who's a leading in vivo imaging expert, to help drive our push into other parts of Asia Pacific, including major markets in Japan, South Korea, and Singapore.

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So we feel we've got a really exciting future, and in particular next few months. So we're expecting to commence our clinical trial at the Melbourne Dental School. We're anticipating commencing stage three of our breast cancer study at the leading Melbourne hospital. We're continuing to enhance our geographical footprint to deliver additional FIVE2 ViewnVivo®, our laboratory product, sales. And we're also expecting feedback from the FDA in relation to the clinical pathway for us, the regulatory pathway for our InVivage® device, focusing initially on oral cancer, and we're anticipating that feedback in September.

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So, thank you all for your attention today, and I would welcome anyone reaching out with any queries or comments. I'd be really pleased to talk to you all, and thank you to the Network News for the opportunity today.