Caldera, close to global breakthrough, seeks new investors
Caldera, close to global breakthrough on new prostate cancer test, seeks new investors
By Jonathan Underhill
May 18 (BusinessDesk) - Caldera Health, a
New Zealand biotech company working on a gene-sequencing
replacement for the world's most widely used prostate cancer
test, is seeking new investors to complete a $2 million
capital raising to finish clinical studies and put the
research in front of potential commercial
partners.
Auckland-based Caldera has attracted $5.93
million of investment since being incorporated in 2009, made
up of $5.4 million from investors including New Image Group
founder Graeme Clegg, Stephen Tindall's K One W One, the
government's New Zealand Venture Investment Fund, and about
$568,000 from Callaghan Innovation and its predecessors. It
has raised about $1.1 million of the $2 million sought in
its latest offer of 2.5 million shares at 80 cents apiece.
Each share comes with a 'stapled' option to buy another
share at that price by 2017. Investors need to put in a
minimum $750,000.
Caldera was co-founded by Jim
Watson, an immunologist fighting his own 11-year battle with
metastatic prostate cancer, who realised the standard
prostate specific antigen, or PSA, blood test was so limited
that there was "a huge unmet need in men's health for a test
that diagnosed early prostate cancer." In 2012, the US
Preventive Services Task Force recommended against mass PSA
screening because it threw up both false positives and
negatives, didn't distinguish between aggressive cancers and
benign strains or even other prostate conditions, and led to
over-diagnosis and unnecessary
prostatectomies.
Caldera's alternative is based on the
use of RNA biomarkers to distinguish between healthy and
cancerous tissue. The stage 2 clinical study currently
underway is to demonstrate that the genetic biomarkers
correspond with what is known as a Gleason score, where
prostate tissue from a biopsy is rated on the level of
'disorganisation' of cells, a cancer indicator used
alongside the PSA that's also regarded as limited because it
can't detect whether a cancer is aggressive. If and when a
Caldera test is developed, it would be used alongside the
Gleason score.
The current testing regime in use worldwide is likely to be spurring unnecessary medical interventions on a massive scale. Watson says an estimated 60 percent to 70 percent of men with a Gleason score of six are likely to have a non-invasive cancer, while those that go on to develop metastatic cancer that spreads, typically to the bones, make up just 30 percent.
"The dilemma in the diagnosis of prostate cancer today is that the PSA test has no predictive character and the biopsy score of six gives no indication whether it is indolent or aggressive cancer," Watson said. In reality, many men opt to have their prostate removed, just to be sure, subjecting themselves to the health risks and sheer costs associated with biopsies and often unnecessary surgery.
Caldera will sell about 23 percent of the company in its latest funding round, lifting total shares outstanding to 11.1 million and valuing the firm at $8.9 million.
The latest funding round will also finance a permanent chief executive, pay for new automated testing equipment, enable two more scientists to be hired and help Caldera execute its partnership strategy, from which it expects licensing revenues to flow. It will also allow the RNA biomarker analysis to be applied to breast cancer, one of the wider applications for the work.
Managing director Graham Watt is a former executive at Roche Diagnostics, part of the Basel, Switzerland-based Roche Group, the world's biggest maker of cancer drugs. Watt says a partner such as his old firm or Siemens AG of Germany have the scale to transform the RNA biomarker work to a test that could eventually replace the PSA test and be the basis for wider applications.
"We see ourselves as generating the IP (intellectual property), developing the test to the point it's credible for an international partner such as Roche," he said. "They'd have the means to add more clinical studies to get greater depth of data, they'd also be able to deal with the thorny question of regulations in the US and Europe, and then they have the marketing power to launch the tests."
The revenue stream generated from licensing fees, which may include an upfront payment or even equity investment, would fund ongoing product development for the New Zealand molecular biology company. Some industry yardsticks imply licensing fees could amount to 5 percent of the sale price of the test, he said.
The company says there is huge potential for considerably more precision in molecular diagnosis as health science enters the world of personalised medicine, where therapies are much more designed to meet individual needs.
(BusinessDesk receives funding from Callaghan Innovation to cover the commercialisation of innovation.)
(BusinessDesk)