ANN ARBOR, MI / ACCESSWIRE / January 2, 2019 / ENDRA Life Sciences Inc. ("ENDRA") (NDRA), a developer of enhanced ultrasound technologies, has released a letter to its shareholders from Francois Michelon, Chairman and CEO.
Dear Fellow Shareholders:
2018 was an exciting year as we achieved several operational milestones and, as a newly public company, learned a few lessons that will strengthen our ability to achieve our objectives in 2019. On the operational front, we advanced development of our Thermo Acoustic Enhanced Ultrasound (TAEUS) clinical technology targeting Non-Alcoholic Fatty Liver Disease (NAFLD), setting the stage for a European launch in 2019.
We renewed our partnership with GE Healthcare for an additional two years and grew our IP portfolio from 33 to 41 assets. We also initiated our first in-human study, strengthened our balance sheet and implemented a quality management system required for CE regulatory approval in Europe.
I am proud of these accomplishments, particularly when you consider how we have kept our overhead low with only 17 dedicated staff members.
ENDRA's overarching goals are to broaden access to better healthcare and to drive shareholder value. To achieve these goals, we have been implementing a strategy with the following elements:
- Enable ultrasound to see human tissue in ways similar to CT-MRI, but at 50X lower cost.
- Scale the TAEUS platform with multiple clinical applications, beginning with liver fat assessment, and expanding to other applications such as tissue-temperature guidance for energy-based surgery. Prove-out market adoption with an accessory device, then move up the value chain to multiple software applications, and eventually license TAEUS to strategic partners.
- Focus ENDRA's resources on the highest value items we can do internally: fundamental research, intellectual property, algorithm development and development of new applications. Partner where it makes sense: in core engineering and commercialization – to amplify our resources and enable an "asset light" business model.
ENDRA's first focus: Non-Alcoholic Fatty Liver Disease. A huge healthcare problem with no practical diagnostic and treatment solutions … yet.
Our participation in several global hepatology and radiology conferences in 2018 -- the EASL Non-Alcoholic Fatty Liver Disease Summit, The AASLD Liver Meeting 2018 Summit, The Interdisciplinary Ultrasound Congress 2018, and RSNA 2018 -- allowed us to raise awareness of ENDRA's technology with thousands of attendees, develop new clinical relationships and collect valuable feedback from clinical thought leaders. I personally staffed ENDRA's booth at two of these conferences, eager to hear unfiltered feedback from clinicians, and I came away more deeply convinced that there is a strong unmet clinical need to cost-effectively and safely diagnose Non-Alcoholic Fatty Liver Disease (NAFLD). NAFLD remains a leading cause of chronic liver disease globally, affecting over one billion people, driven by hepatitis and rising levels of obesity and diabetes. The lack of practical diagnostic tools to identify and monitor at-risk individuals, and the likely 2020 introduction of the first pharmacological therapies to treat the spectrum of liver disease, represent the perfect intersection of opportunities for ENDRA. As a hepatologist told me at the AASLD Liver Meeting in San Francisco: "Now is the perfect time for ENDRA's technology. If ENDRA had been at this conference two years ago, you would have been too early, and if you arrived a year from now you'd be too late." For more supporting industry information, we would refer you to a recent CNBC article titled: 'The $35 billion race to cure a silent killer that affects 30 million Americans' and available here.
First In-Human Studies
In October 2018, we received an Investigational Testing Authorization (ITA) from Health Canada to commence the first human studies in healthy volunteers with our TAEUS clinical system targeting NAFLD, guiding our algorithm development, and comparing our technology to MRI. The feasibility study is being conducted in collaboration with the widely respected Robarts Research Institute in London, Canada. We were very happy that the ITA application received a Class II designation, representing a low/medium risk profile for our TAEUS device.
In the 2018 "lessons learned" column, we underestimated the ITA approval cycle time, which took six months longer than we expected, largely due to a high volume of Health Canada applications. While this was largely outside ENDRA's control, we have to own it.
The data Robarts Research Institute is collecting with our investigational device includes the following:
- Integration evaluation of hardware and software design elements of the TAEUS platform;
- Substantial user and patient human-factors data, including clinical workflow and ergonomic considerations to support our CE mark application and commercial product design; and
- Quantitative MRI liver fat fraction measurements for each study subject, that will both guide our algorithm development and provide data for initial correlation to the TAEUS measurements.
The Robarts study is the first of several planned clinical studies to support TAEUS commercialization in 2019.
In December 2018 we announced that the Robarts investigators had received approval to expand the study from 25 to 50 subjects. The initial cohort of 25 subjects had predominantly healthy liver fat content and did not sufficiently mirror the distribution of fatty liver in the general population. The study investigators chose to expand the study size to recruit additional study subjects to reflect the stages of fatty liver disease characteristic of the general population. Ironically, since no practical tool exists -- yet -- to gauge liver fat content, the study investigators couldn't easily gauge the distribution of liver fat in the study subjects, and couldn't specify the number of subjects required for the study. When ENDRA's TAEUS technology becomes widely available, this issue will be largely overcome.
We expect to receive study results in the first quarter of 2019. The data collected from the study, including additional usability inputs, will be included in our TAEUS liver device technical file submission for device CE Mark, which we anticipate in the first half of 2019.
Fortified Balance Sheet
In 2018 we raised approximately $10 million in additional capital, in three tranches including two common stock offerings and one convertible note whose purchasers included ENDRA's management and board of directors. The evening we priced our October 11 offering, the stock market took its first major 2018 downturn with the Dow Jones Industrial Average losing 831 points on its worst day in over nine months. That night I reviewed our alternatives and made the decision to complete the offering, knowing I would likely receive a lot of investor questions the next day. In November we completed a second equity offering, this time at a price 80% higher than a month earlier. In hindsight, considering the worsening November and December market volatility, ENDRA did exactly the right thing. As a result of these equity raises we:
- Capitalized the company to finish product development, achieve CE regulatory approval and launch our TAEUS liver device;
- Cleaned up our balance sheet. ENDRA is now debt free;
- Issued only common shares, without warrants, therefore minimizing future dilution; and
- Increased our institutional ownership from approximately 5% at the beginning of 2018, to 20% today.
In fact, as we exit 2018, the capital markets are in turmoil and are virtually shut down with respect to raising high-quality capital. Moreover, the combination of proper governance and our CFO's strict cash management in the second half of 2018 now position ENDRA on strong financial ground as we commence operations in the New Year.
Quality Management System
Looking internally and in parallel to our product development, human study and pre-commercial activities in 2018 we implemented a formal Quality Management System (QMS) encompassing our key business processes, from hiring people to product development design control and manufacturing. So far, we have formally defined, implemented and trained our staff on over 40 business-critical processes.
Why is this important to ENDRA? A QMS is one required step in the process of securing a CE regulatory mark and we need quality processes in place to achieve our ISO-13485 certification and to develop the technical documentation correctly for our CE application. We look forward to providing a major update on our ISO-13485 certification in the first quarter of 2019 as well.
Alongside our clinician-engagement activities in 2018, we made strong progress leveraging social media to engage new and existing shareholders including: hosting ENDRA branded giveaways, launching short educational videos on liver disease and TAEUS technology, producing a technical TAEUS white paper, and garnering several hundred thousand aggregated impressions on our Twitter and LinkedIn posts. I encourage our investors to follow us on Twitter at @endralifesci to stay closely engaged with our company.
2019 & Beyond
As we kick off a critical new year for ENDRA, I couldn't be prouder of our small team nor more confident in our operational outlook. We have a strong balance sheet, human studies are underway, the necessary foundations for a strong CE application have been implemented, and we are partnered with the market leader, GE Healthcare, to support our 2019 commercialization activities in Europe. ENDRA is at an exciting inflection point in our history; poised to deliver meaningful value for our shareholders.
Thank you for your continued support. Together, I believe that we can change the game for over one billion NAFLD patients and their caregivers.
Chairman & CEO
ENDRA Life Sciences, Inc.
About ENDRA Life Sciences Inc.
ENDRA Life Sciences Inc. ("ENDRA") (NDRA) is a developer of enhanced ultrasound technologies. ENDRA is developing a next generation Thermo-Acoustic Enhanced UltraSound (TAEUS™) platform to enable clinicians to visualize human tissue composition, function and temperature in ways previously possible only with CT & MRI - at a fraction of the cost, and at the point-of-care. ENDRA's first TAEUS application will focus on the quantification of fat in the liver, for early detection and monitoring of Non-Alcoholic Fatty Liver Disease (NAFLD). ENDRA's goal is to bring new capabilities to ultrasound - thereby broadening access to better healthcare. For more information, please visit www.endrainc.com.
About Non-Alcoholic Fatty Liver Disease (NAFLD)
NAFLD is a condition closely associated with obesity, diabetes, hepatitis-C and certain genetic predispositions in which fat accumulates in the liver. NAFLD affects over 1 billion people globally and is estimated to cost the U.S healthcare system over $100 billion annually. NAFLD is often asymptomatic and if left untreated, NAFLD can progress to inflammation (NASH), tissue scarring (fibrosis), cell death (cirrhosis) and liver cancer. By 2025, NAFLD is forecast to be the greatest root cause of liver transplants. The only tools currently available for diagnosing and monitoring NAFLD are impractical: expensive Magnetic Resonance Imaging (MRI) or an invasive surgical biopsy.
All statements in this release that are not based on historical fact are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements, which are based on certain assumptions and describe our future plans, strategies and expectations, can generally be identified by the use of forward-looking terms such as "believe," "expect," "may," "will," "should," "could," "seek," "intend," "plan," "goal," "estimate," "anticipate," or other comparable terms. Examples of forward-looking statements include, among others, statements we make regarding the results of pending human studies and nature of the data obtained from such studies; the adequacy of protections afforded to us by the patents that we own and the success we may have in, and the cost to us of, maintaining, enforcing and defending those patents; expectations concerning ENDRA's ability to secure regulatory approvals; anticipated product pricing; expectations with respect to current and future partnerships; estimates of the timing of future events and achievements; and expectations concerning ENDRA's business strategy. Forward-looking statements involve inherent risks and uncertainties which could cause actual results to differ materially from those in the forward-looking statements, as a result of various factors including, among others, the following: our ability to develop a commercially feasible technology; receipt of necessary regulatory approvals; our ability to find and maintain development partners; market acceptance of our technology; the amount and nature of competition in our industry; our ability to protect our intellectual property; and the other risks and uncertainties described in ENDRA's filings with the Securities and Exchange Commission. The forward-looking statements made in this release speak only as of the date of this release, and ENDRA assumes no obligation to update any such forward-looking statements to reflect actual results or changes in expectations, except as otherwise required by law.
SOURCE: ENDRA Life Sciences Inc.