AnPac Bio-Medical Science Co., Ltd. (NASDAQ:ANPC) was founded in 2010 by an inventor in the semiconductor technology industry and an expert in molecular epidemiology and cancer research. The two visionaries recognized the limited accuracy and advancement of existing diagnostic tests for cancer and the potential for using diagnostics to measure the biophysical properties of blood to detect the disease. Despite cancer’s position as a leading cause of death in both the United States and China, little progress has been made in diagnostic accuracy over the last decades. Cancer screening has a low rate of precision where 19% of breast cancers and 20-50% of prostate cancers are misdiagnosed (1). Testing accuracy is even lower when performed during the early stages of the disease; however, the early stage is when a proactive response can have the most impact at the least cost.
To respond to this unmet need, AnPac’s founders decided to pursue measurement of the biophysical properties of blood to identify patients with a risk for cancer. After years of research and investigation, the team was able to correlate these properties with cancer occurrence. The test’s effectiveness was validated in retrospective studies for single and multiple cancers. Using its CDA technology in combination with other biomarker-based tests, AnPac has been able to establish a patient’s risk for any one of the 26 most common cancers in the world today, providing a service that can reduce the disease’s severity and cost.
In 2018 there were an estimated 17 - 18 million new cases of cancer worldwide (2). Cancer is the number one cause of death in China and the second leading cause of death in the United States, making it a central focus of preventative efforts. For example, the five-year survival rate for lung cancer is over 60% for cases when the disease is isolated in the lungs but only 6% in more advanced stages (3), highlighting the importance of early detection. There are a broad variety of treatments for cancer; however, they become less effective when the disease has progressed to advanced stages. Early detection and diagnosis are critically important for efficiently and effectively treating this common malignancy. There are many screening tools available; however, they suffer from low levels of accuracy, high costs, inconvenience and discomfort and a requirement for multiple tests to narrow down cancer type. To address these shortcomings, AnPac Bio developed a blood test based on its Cancer Differentiation Analysis (CDA) technology. Leveraging a database of 140,000 samples, the technology can assess the risks of up to 26 different cancer types earlier and with high accuracy.
Global Cancer Incidence
Of the 17 to 18 million estimated global new cancer cases, the United States represents approximately 10% of this total, with 1.8 million cases and China, 24% of the total, with 4.3 million cases according to the NIH and GLOBOCAN respectively. The most common types of cancer include lung, breast, colorectal and prostate (4).
Exhibit I – US Cancer Cases & Deaths by Site (5)
According to a study by Frost and Sullivan, there are more than 175 million Chinese citizens over 65 years of age, a population which suffers a higher incidence of cancer compared to younger individuals. This cohort is expected to increase to 306 million by 2030, dramatically increasing the vulnerable population. The global cost of cancer was estimated to be $1.4 trillion in 2019 and is expected to rise to $2.1 trillion by 2030, representing a 3.5% compound annual growth rate. In China, the expenditures for direct and indirect medical costs for cancer in 2019 was $220 billion, and expected to rise to an anticipated $542 billion by 2030 (6). In vitro diagnostics are a large market growing at a rapid pace in China and make up a material portion of these costs. In 2019, the estimated market size for in vitro diagnostics was $12.3 billion (7) which is growing at almost 20% per annum.
The incidence of cancer has increased in China due to several key factors including an aging population, high rates of smoking and an unhealthy diet (8). A 2015 paper found that cancer incidence in China was 174.0 per 100,000 and the fatality rate was 122.2 per 100,000. The research observed that breast cancer in Shanghai increased by 110% in 2008-2009 as compared to 1988-1992. Cancer has emerged as the leading cause of death since 2011 (9). With this backdrop, the importance of cancer screening and detection was critical in providing the motivation for Drs. Chris and Herbert Yu to develop the CDA technology.
The importance of effective cancer screening cannot be understated. In the United States, aggressive efforts made to fight the disease were able to reduce cancer rates by 26% over the 25-year period ending in 2015. This dramatic improvement was achieved in large part through early detection and treatment (10). Cancer treatment is most effective when the malignancy is at an early stage.
Some of the most common screenings include mammograms, pap smears, colonoscopies, prostate-specific antigen (PSA) tests and ultrasounds among others. While these are helpful tools to identify cancer, tests can provide incorrect information, have a high cost and result in complications. Invasive tests can cause side effects including pain, bleeding, infection, deformity and internal injury. Accuracy can be a problem as well. A false negative can provide an unjustified sense of health while a false positive can send a patient on to unnecessary and expensive additional confirmatory testing.
Cancer Differentiation Analysis (CDA)
A new entry into the blood-based biomarker universe is AnPac’s CDA platform which relies on sensors detecting bio-physical properties in blood samples to assess risks of multiple cancer types. In general, bio-physical properties include, but are not limited to, acoustical, electrical, magnetic, nano-mechanical and optical properties. AnPac CDA technology can be used alone, or in combination with other cancer detection technologies such as bio-markers (the CDA platform) for cancer screening. The signals are analyzed at the protein, cellular and molecular biological levels including the protein tumor factor (PTF) and cell tumor factor (CTF) and overall CDA value.
The components of the machine include a blood sample input unit, a sample transport unit, a sample mixing chamber, a testing unit and a data storage unit.
Exhibit II – CDA Device, Image 1 (11)
Patients first have their blood drawn by a phlebotomist and then the blood sample is placed in the test tube rack inside the CDA unit. After a sample is placed into the machine, the automatic mechanism takes over. The device has the option to heat the sample, then activates sensors consisting of micro-channels, micro-sensors and measurement instruments to analyze the blood sample along a number of parameters. Data is stored in the CDA device with the results assessed by an algorithm for further analysis. This process, including the use of microfluidic devices to detect biophysical properties, is patented by AnPac.
Exhibit III – CDA Device, Image 2 (12)
The equipment is relatively low cost as compared to genetic sequencers which are commonly used in cancer screening. Management estimates that the CDA device will sell for under $300,000, which is below the $350,000 to >$1,500,000 for machines sold by Pacific Biosciences or Illumina. 40 samples can be run simultaneously and can generate results within minutes, suggesting a daily throughput of almost 2,000 samples during a normal workday.
Output from the machine provides values that categorize a result as low risk, medium risk or high risk. A CDA value of below 42 is considered low risk, while a value from 42 to 50 is medium risk and a value of 50 or greater is high risk. In the following exhibit, we show a sample report that includes the various readings generated by a sample test run.
Exhibit IV – CDA Sample Test Report (13)
Validation of CDA Platform
The biophysical properties of blood and its component parts change in a statistically significant way as an individual transitions from non-cancerous disease, to pre-cancerous disease, then to early and late-stage cancer. Through rigorous screening and years of study, AnPac has been able to correlate the PTF, CTF and CDA values with low risk, medium risk and high risk of cancer. After the initial risk profile is established, follow up medical examinations are recommended or AnPac’s combination tests can be administered. The combination tests combine the CDA test output and biomarker-based tests that are performed internally or by a third-party clinical laboratory. CDA identifies the overall risk of cancer, then specific biomarkers provide additional information on which type of cancer the patient may have. This highlights the synergy of the CDA platform with other providers of cancer testing such as GRAIL, BGI-China and Exact Sciences.
AnPac has published numerous research studies that demonstrate the sensitivity and specificity of tests performed using CDA technology. Results for 26 different cancers have shown meaningful accuracy in risk detection. Studies for lung, esophageal, liver and colon cancer among others have been presented at multiple American Society of Clinical Oncology (ASCO) meetings and appeared in several issues of the Journal of Clinical Oncology. This includes 25 research studies addressing the CDA technology, 15 research studies conducted with five Chinese hospitals and medical institutes and ten unpublished research studies with nine hospital and medical institutes in China.
Exhibit V – Retrospective Studies and Published Work (14)
Current and Future Product Offerings
In addition to its current cancer screening offering, AnPac’s CDA technology is able to assist diagnosis, monitor recurrence and guide therapy selection thereby enhancing each of these efforts. These services can help identify individuals at high risk, enhance a physician’s effectiveness and monitor a patient’s response to therapy throughout all regions where AnPac’s services are offered. Not only do they provide badly needed services, they also provide additional growth opportunities for the company to pursue.
Cancer is one of the world’s most expensive and dreaded diseases. While medicine has made progress in its treatment, outcomes can be improved dramatically with early detection. A new wave of diagnostics have been developed in recent years that simplify the effort to screen for certain types of cancer risk using blood-based biomarkers. AnPac has developed its own complementary approach in this vein that measures the biophysical properties of blood and provides high sensitivity and specificity compared to other blood-based diagnostics. Having completed extensive retrospective studies demonstrating the accuracy of their CDA platform and expanding its exposure to an immense market, we see substantial opportunity for AnPac’s growth in China and the United States.
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1. NIH. Crunching Numbers: What Cancer Screening Statistics Really Tell Us. https://www.cancer.gov/about-cancer/screening/research/what-screening-statistics-mean
2. International Agency for Research on Cancer and World Cancer Research Fund
3. American Cancer Society based on NSCLC data from 2009 to 2015. https://www.cancer.org/cancer/lung-cancer/detection-diagnosis-staging/survival-rates.html
4. Global cancer incidence, World Cancer Research Fund / American Institute for Cancer Research. https://www.wcrf.org/dietandcancer/cancer-trends/worldwide-cancer-data
5. National Cancer Institute, 2019 Cancer Statistics. https://seer.cancer.gov/statfacts/html/common.html
6. Using Frost and Sullivan data converted from RMB to US$ at a rate of 7.1:1
7. Using Frost and Sullivan data converted from RMB to US$ at a rate of 7.1:1
9. Yu, S. et al. Cancer Prevention Research in China. Cancer Prevention Research, August 2015.
10. Byers, T. et al. The American Cancer Society challenge goal to reduce US cancer mortality by 50% between 1990 and 2015: Results and reflections. CA Cancer J Clin. 2016 Sep;66(5):359-69. doi: 10.3322/caac.21348. Epub 2016 May 13.
11. Source: AnPac Corporate Presentation, November 2019
12. Source: AnPac Stock Photograph
13. Source: AnPac Bio Corporate Slide Deck, December 2019.
14. Source: AnPac Bio Corporate Slide Deck, December 2019.