Our initial targeted application is the diagnosis of colorectal cancer. According to the American Cancer Society, it is the second leading cause of cancer-related deaths and the third most common cancer in the US. Over 100,000 new cases of colon cancer and 40,000 new instances of rectal cancer are expected in the US in 2012. Comparable trends are seen in the European Union, where we currently sell our systems. Annually, about 50,000 deaths are expected between colon and rectal cancer combined. A recent study calculated that if all unnecessary physical biopsies in colon cancer screening were eliminated, savings to the United States healthcare system would be approximately $675 million per year with no significant increase in mortality rates.
The WavSTAT Optical Biopsy System can help to realize these savings. The estimated current annual market opportunity in the diagnosis of colorectal cancer for our technology is over $825 million in the EU and over $615 million in US for a total of overy $1.4 billion combined.
Our WavSTAT® Optical Biopsy System instantly determines if tissue is normal, pre-cancer or cancerous, without the need for exploratory physical biopsy. The system is designed for use as an adjunct to the current diagnostic standad; lower gastrointestinal (GI) endoscopy. Furthermore, it is intended to evaluate small polyps that the physician has not already decided to remove. The device is used in assessing which polyps should be removed and submitted for subsequent physical biopsy. At the present time, close to 65% of the physical biopsies taken to diagnose colon cancer are of normal tissue.
We are increasing diagnostic effectiveness within the current standard of care for colorectal cancer. We do not ask physicians to change their procedures or protocols except for eliminating unnecessary physical biopsies. Physical biopsies can now be performed only if a suspicious area is optically diagnosed.
The WavSTAT® Optical Biopsy System developed by SpectraScience is capable of determining whether tissue is normal, pre-cancerous or cancerous without physically removing tissue from the body and without waiting days for a pathology report. The WavSTAT uses a spectrophotometry technique known as Laser Induced Florescence (LIF). During LIF, cool laser light shines onto and excites tissues to emit a returning florescent signal. The emitted florescence is collected, measured and analyzed by our proprietary software algorithm. This software algorithm provides the physician with an immediate analysis of the tissue. The WavSTAT carries the CE mark for the diagnosis of all cancers, a prerequisite for sales in the European Union.
SpectraScience is also developing an additional application for the detection of pre-cancerous and cancerous tissue in the esophagus. Esophageal cancer is the eighth most common type of cancer and causes 12,000 deaths per year in the U.S. (2% of all cancer deaths). One type of esophageal cancer, adenocarcinoma, accounts for 50% of esophageal cancers and is difficult to distinguish using the current standard of care.
Gastroesophageal reflux disease (GERD), in which digestive acid refluxes from the stomach into the esophagus (known primarily for causing heartburn), is a condition that afflicts 20% of the populations of the U.S. and Western Europe. It is believed that GERD is a precursor of adenocarcinoma of the esophagus. Specifically, the hypothesis is that chronic reflux of acid into the esophagus causes changes in the cells lining the lower esophagus--changes that are referred to as Barrett's esophagus--that ultimately lead the cells to become cancerous. It is estimated that ½ to 1% of patients with Barrett's esophagus develop adenocarcinoma each year they are followed. (This means that during 20 years, a patient with Barrett's esophagus has a 10 to 20% risk of developing adenocarcinoma.) Therefore, it has been recommended that patients with Barrett's esophagus undergo regular and frequent endoscopy (every year) and biopsy of the esophagus so that early malignant changes can be detected and treated early before cancer spreads (Source: Jay W. Marks, M.D., Medicine.Net).
For both colon and esophageal cancer applications, SpectraScience is working within the current standard of care. We are not asking physicians to do anything different than they do today. Instead, we provide a tool for them to diagnose faster, more accurately and more cost effectively.
As part of our market strategy, we introduced the WavSTAT4 at the 19th United European Gastroenterology Week (UEGW) annual meeting in Stockholm, Sweden, October 22-26, 2011. Introducing our product first to the European Union (EU) is a good financial strategy because the EU markets have a single-payer model focused on providing comprehensive healthcare cost-effectively. We believe this will enable us to minimize regulatory risk, maximize design flexibility, and provide a foundation upon which we can build strategic partner relationships. We will subsequently launch the product in the US, targeting managed care organizations such as the Veterans’ Administration (VA) hospitals and Kaiser Permanente.