By John Vandermosten, CFA
Endometriosis affects an estimated 200 million women worldwide and is frequently misdiagnosed, preventing its early and proper treatment. While most women affected by the disease are in their 20s and 30s, the first signs appear at puberty. Puberty is also the best time to begin treatment due to the progressive nature of the disorder. While it can be debilitating if not addressed, the problem does have a solution: early and accurate diagnosis. And prompt palliative treatment can prevent or delay disease progression. Failing to properly identify and treat endometriosis typically results in irreversible periodic intense pain, infertility, bowel and urinary disorders and other discomfort.
As of today, there are no lab tests available to diagnose endometriosis. This has led to misdiagnosis and the attribution of symptoms to other problems such as ovarian cysts, irritable bowel syndrome, normal monthly period pain or other conditions. As a result, patients suffer from ineffective treatment and a decline in health. A system with both an effective early-stage diagnostic and treatment may relieve symptoms and improve both the health and quality of life for a significant segment of the population.
View Exhibit I - PRED Logo
To address this unmet need, Predictive Technology Group (PRED) is developing a diagnostic test called Advanced Reproductive Therapy Guide (ARTGuide™) to test for genetic causes of infertility. ARTGuide and its companion for primary care, ENDORisk™, examine sequences in the genome that are associated with endometriosis, and along with a clinical questionnaire, can anticipate endometriosis before the symptoms can be observed.
Beyond its genetic-based diagnostics segment, Predictive’s other subsidiaries focus on women’s health, spine-related disorders and tissue collection. The company is currently producing revenues from its regenerative medicine subsidiary, Predictive Biotech. This branch maintains a core competency in human cell and tissue processing (HCT/P) and has commercialized four products: AmnioCyte™, AmnioCyte Plus™, PolyCyte™ and CoreCyte™. AmnioCyte and AmnioCyte Plus are derived from amniotic fluid and commercialized as a tissue allograft. PolyCyte and CoreCyte are derived from Wharton’s Jelly, which is found in the umbilical cord and contains high levels of proteins, cytokines, growth factors, and mesenchymal stem cells. All of Predictive’s regenerative medicine products are used by physicians to aid the body’s healing process.
Predictive’s third subsidiary is CellSure. This subsidiary procures the birth tissues used by the biotech group for its regenerative products. Its goal is to develop a bio-repository that will create a genetic library to help diagnose and anticipate disease.
Predictive Technology’s primary focus this year is on endometriosis. The company is seeking to develop a drug and a diagnostic to identify the one in ten women with endometriosis and facilitate treatment. ARTGuide will be offered as a lab developed test (LDT) while it is being commercialized into some of the top fertility centers in the United States. In conjunction with the diagnostic, the company is in discussions with other pharmaceutical companies that offer endometriosis therapies and is developing its own remedies to more effectively treat early to moderate disease progression.
Endometriosis is a female condition where the tissue that lines the uterus begins to proliferate in other parts of the body. This tissue will grow and bleed in response to hormonal changes during ovulation. Women with the disorder are of menstruating age and suffer from a variety of pain related symptoms which include:
‣ Painful periods
‣ Pain in the abdomen during menstruation
‣ Heavy menstrual bleeding
‣ Pain after sexual intercourse
‣ Painful defecation
According to the American Society of Reproductive Medicine, up to 50% of women with endometriosis suffer from infertility. A similar percentage of all infertile women suffer from endometriosis.
Endometrial tissue, which normally lines the uterus, is sometimes located outside of it. Ectopic endometrial cells are most commonly found on the ovaries, fallopian tubes, and on the bowel and bladder. These cells or lesions inflame and bleed every month in response to the hormonal cycle. Estrogen and progesterone regulate the growth of endometrial tissue by stimulating and inhibiting cell proliferation. With the passage of years, scarring, inflammation and organ dislocation occur causing adhesion between areas where the ectopic endometrial tissue grows. Genetic factors are understood to contribute to the disorder.
View Exhibit II - Location of Ectopic Endometrial Tissue
Endometriosis is difficult to diagnose and can be mistaken for other conditions such as appendicitis, ovarian cysts, fibroids or a number of other disorders. Most women are diagnosed based on the symptoms presented along with a sonogram or MRI, but these results are usually inconclusive. A laparoscopy is frequently performed to provide a conclusive assessment and requires surgery and examination of the uterus and surrounding tissue. This invasive approach is costly and unpleasant.
Genetics plays a role in endometriosis. Studies have shown that sisters, mothers and daughters of those affected are 5 to 7 times more likely to have the disease. Additional work has been performed to identify a genetic signature for predisposed women. While there is no cure, there is treatment for endometriosis which can include surgery, hormones and the use of painkillers. The combination of birth control and NSAIDs is one common approach and in more serious circumstances laparotomy or hysterectomy may be performed. If taken early, hormone treatments can prevent the endometrial tissue from proliferating and limit the damage. The hormones can inhibit ovulation and reduce estrogen levels. Progesterone specifically can decrease the activity of estrogen receptors, which has several beneficial effects on the disease through growth inhibition of endometrial tissue as well as reducing blood vessel growth, reduction of inflammation and moderation of the menstrual cycle.
Abbvie’s elagolix is a new treatment for the disease which was approved by the FDA this July. It is based on a gonadotropin-releasing hormone (GnRH) receptor agonist which binds competitively to the GnRH receptors on the pituitary gland. Elagolix has been effective in reducing pelvic pain related to endometriosis; however, there are serious side effects associated with bone loss and the drug can only be used for up to two years at the lower dose and six months at the higher dose. Other side effects are similar to those suffered in menopause and include hot flashes, amenorrhea, headaches and nausea. Given its limitations, elagolix is not a long-term solution for endometriosis and there is demand for something better. Despite elagolix’s shortcomings, Abbvie sees a market in excess of $2 billion for the drug, which includes contributions from a fibroid indication.
Other treatments in development for endometriosis include Myovant’s Relugolix and Obseva’s Linzagolix. Both of these are in the same class as Abbvie’s drug: GnRH receptor agonists. These agonists are used in a variety of diseases including breast cancer, prostate cancer, uterine fibroids and female infertility with the best known example called Lupron. Natural GnRH is produced by neurons in the hypothalamus, but has an antagonistic effect. Therefore, this class of drug will compete with the natural GnRH for binding to GnRH receptors, which can decrease or block the production of the hormone. By inhibiting GnRH receptors, the drugs reduce the circulating gonadotropins luteinizing hormone and follicle stimulating hormone, leading to the suppression of sex hormones. Relugolix underwent a Phase II clinical trial in 487 patients with endometriosis and now Myovant is currently advancing it through a Phase III clinical study. Linzagolix is currently being studied in a Phase IIa trial for endometriosis in the US and Europe. A Phase 2b is expected soon.
The approved and in-development products for endometriosis are good news for Predictive. The ARTGuide test assists in-vitro fertilization (IVF) specialists and patents in determining the optimal course of care for fertility treatment, accounting for the effects of endometriosis and other genetic causes of fertility. ENDORisk is focused on identifying patients at a high risk for endometriosis and can guide the prescription of one of the FDA-approved treatments available. The current timeline calls for ARTGuide to be available for patients before year-end as a non-invasive test for endometriosis and other genetic causes for infertility. The tests were developed using data from over 30,000 endometriosis patients and over 100,000 genetically sequenced population controls to identify relevant markers. Validation of the markers was conducted through two genome wide association studies (GWAS) that paired genome variants with the presence of endometriosis and sequenced 3,000 exomes to detect low frequency variants. Over 1,000 markers were identified and patented for development. The results of ARTGuide will be combined with clinical observations of the patients to produce a 90%+ positive identification rate. While the company has not disclosed what they will charge, the cost to run the test is estimated to be less than $100, suggesting that they can be very competitive in the mass market to identify likely cases.
Apart from a laparoscopy which is invasive and may cost from $8 to $20 thousand per procedure, there are no tools to diagnose early stage endometriosis. The lack of an inexpensive and non-invasive test has left many women undiagnosed and a large population with an unmet need. Following the launch of ARTGuide, we anticipate that Predictive Therapeutics will seek out partnerships with the large pharmaceutical companies offering endometriosis therapies to the non-infertility markets. We highlight the importance of having an effective diagnostic tool for any disease that can be easily misdiagnosed. The lack of a proper evaluation can result in a patient being denied timely treatment or being given potentially toxic and improper medications.
The ability to accurately diagnose women with the disorder is critical for treating the population with the unmet need. It is also important from a payor’s perspective and can improve the likelihood of formulary inclusion. Payors value a diagnostic test that can identify the appropriate population for treatment, as they are only providing medicine for patients that will respond, resulting in lower but more appropriate usage and better outcomes.
Predictive’s plan to launch ENDORisk is expected to be followed by a treatment option. The company is planning to develop a pipeline of therapies from both internal efforts and external partnerships to treat early to advanced stages of the disease. One potential therapy being pursued is a combination of progesterone/progestin with a non-steroidal anti-inflammatory. This combination of medicines is the most commonly prescribed therapy for endometriosis, and is effective especially when it is caught early. While the precise formulation of the two medications that Predictive will use has not yet been decided, the company will focus on options that have substantial safety data available and that have been previously approved by the FDA. Approval for this therapy will likely be sought via the 505(b)(2) pathway. Management has publically indicated that it could take 18 months and $15 million to pursue this route; however, based on our experience with combinations of well-understood chemical entities, approval could come in about a year and with the use of less expensive bridging studies.
The strategy for commercialization of ARTGuide is to target the top ten metropolitan areas for infertility services and offer it in these high volume areas. Over the last couple decades, infertility services have gravitated towards centers of excellence in a few major metropolitan areas, and patients have been willing and able to travel to locations with the best reputations. This concentration of fertility clinics has made it efficient for companies with fertility and women’s health products to communicate and educate providers about their value. Predictive believes it can effectively develop the ARTGuide and FertilityDx™ line of diagnostics with an eight to ten person salesforce and effectively penetrate 80% of the United States market.
To discover the potential for a diagnostic test in the infertility markets, Predictive commissioned a study targeting infertility specialists to gauge interest in prescribing ARTGuide. It found that there was significant interest in the test and a third of the physician respondents would offer the test to all of their new patients on their first visit. Based on company estimates assuming penetration into just 12 of 480 US clinics, each with nine physicians, ARTGuide and Fertility Dx could generate over $150 million in revenues.
Predictive Technologies is an emerging company currently focused on diagnosing and ameliorating endometriosis in millions of women. The company is also an important contributor to the regenerative medicine market with four products producing revenues at an annual run rate of near $30 million. With Predictive Biotech’s past success in developing a sales force, there is reason to believe that ARTGuide and FertilityDx can be rapidly and successfully rolled out to existing targeted and concentrated markets. Partnership opportunities with big pharma companies that offer endometriosis treatments can be mutually beneficial as it will allow for identification of those with the disease and incentivize treatment. Certainty of diagnosis from an affordable and easily administrated test can improve penetration and encourage payors to offer the appropriate treatment. Predictive is in an enviable position with the imminent launch of the only non-invasive diagnostic for endometriosis and can see additional benefit when they ultimately launch companion treatments.
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By John Vandermosten, CFA