MIST Inc_preliminary market assessment

MIST, Inc: Breast Cancer Therapy Monitoring Market

Assessment

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Medical Care & The Corporation November 2009

Rosa Hong Boyd Lever

Laura Nieskens Sam Stearns

MIST, Inc: Breast Cancer Therapy Monitoring Market Assessment

EXECUTIVE SUMMARY 3 ...........................................................................................................

BACKGROUND 4 ............................................................................................................................

PROJECT OBJECTIVES 5 ............................................................................................................

METHDOLOGY 5 ...........................................................................................................................

PATIENT WORKFLOW 6 ..............................................................................................................

MARKET SIZING 10 ......................................................................................................................

CUSTOMER ECONOMICS 13 ......................................................................................................

RECOMMENDED MARKET PENETRATION STATEGIES 14 ..............................................

CONCLUSION 16 ............................................................................................................................

APPENDICES 18 ..............................................................................................................................

Appendix 1: Physician Interviews 18 ....................................................................................

Appendix 2: Physician Interview Guide 19 .............................................................................

BIBLIOGRAPHY 20........................................................................................................................

Medical Care and The Corporation 2

EXECUTIVE SUMMARY MIST, Inc. is a start-up company that has developed a microwave imaging technology to

improve the efficacy of breast cancer screening, diagnosis, and therapy. MIST is considering

forming a separate spin-off entity to address the market for monitoring the treatment of

patients undergoing neoadjuvant chemotherapy (NACT). This study assesses the potential of

the breast cancer therapy monitoring market. Our analysis presents findings on the patient

workflow, market size, and financial viability of therapy monitoring.

Methodology

We conducted extensive primary and secondary research to assess the market for breast

cancer therapy monitoring. Since NACT is a relatively new treatment, standard treatment

protocol is not consistently applied and there is no published information available on the

market size. We interviewed sixteen physicians — including medical oncologists, surgical

oncologists, and radiologists — to develop an understanding of the patient workflow and

quantify the size of the market. Results from these inputs were used in a customized market

sizing model that forecasts the size of the market through 2014. We also used this information

to analyze the financial viability of a dedicated therapy monitoring imaging device from a

customer (hospital) perspective.

Results

We believe the therapy monitoring market is too small to support a stand-alone company. We

estimate the current size of the therapy monitoring market is $6.2M in 2009, growing to

$14.8M in 2014. The key barrier to adoption is the limited usage of NACT. Currently, NACT is

the standard of care for patients with inflammatory breast cancer (4% of total patient

population), and is also administered to between 17% and 100% of patients with Stage III

breast cancer, depending on local treatment protocols. Based on the current market size, and

the presence of competing imaging modalities (e.g., MRI, PET), a stand-along imaging device

dedicated to therapy monitoring would only be economically attractive to the highest-volume

hospitals.

Recommendation

To bring the MIST technology to market, we believe that MIST should pursue screening, the

largest breast cancer application. MIST pursued this application several years ago, but was

dissuaded by the need for expensive clinical trials. We suggest that MIST explore alternative

ways to bring the technology to market, including licensing its technology to more established

imaging providers, pursing grants from the National Cancer Institute, and engaging patient

advocacy groups for support and potential funding.

Medical Care and the Corporation 3

BACKGROUND

Microwave Imaging System Technologies, Inc. (MIST) was founded in 1995 by Dr. Keith Paulsen

and Dr. Paul Meaney of the Thayer School of Engineering to commercialize research in

microwave technology. The company’s mission is to improve the efficacy of breast cancer

screening, diagnosis, and therapy. Supported by a $6M Phase II SBIR Grant investment from

The National Institutes of Health (NIH), MIST has developed a microwave-based breast imaging

system which provides high-contrast images for breast cancer applications. The MIST device

provides similar performance to competing modalities, is more comfortable than

mammography, and cheaper and less invasive than both MRI and PET. MIST’s proof-of-concept

device has been demonstrated on more than 150 patients at Dartmouth-Hitchcock Medical

Center (DHMC). 1

The breast cancer market can be divided into three segments: screening, diagnostics, and

therapy monitoring. Between 2004 and 2006, MIST hired a CEO and sought financing to pursue

the breast cancer screening market. In 2006, these efforts were supported by a project team

from the Medical Care and the Corporation course at Tuck, which articulated the value

proposition of using the MIST device in therapy monitoring. This work was incorporated into 2

the MIST business plan as a potential secondary market, but the size of the market was not

determined.

As a result of these efforts, MIST soon found that screening was a difficult market for a

startup to penetrate, due to the amount of investment needed to conduct a clinical trial. The

current standard of care in the diagnosis market is biopsy, which is unlikely to be displaced

due to the high precision and accuracy of this procedure. To move forward, the founders of

MIST have been considering creating a separate entity to address the market for breast cancer

therapy monitoring. This potential application uses imaging techniques to monitor the

response to a course of NACT (chemotherapy applied prior to surgery). The therapy

monitoring market has less competition from alternative modalities, like mammography, and

requires lower investment in clinical trials.

Dartmouth Entrepreneurial Network: Microwave Imaging System Technologies. Retrieved 1 November 1

2009 from www.dartmouth.edu/~denet/startups/profiles/MicrowaveImagingSystemTechnologies.htm

Crawford, Stacy; Stephen Keel, and Sarah Ketchum. “Microwave Tomographic Imaging for Monitoring 2

Tumor Progression During Neoadjuvant Chemotherapy.” 15 November 2006.


http://www.dartmouth.edu/~denet/startups/profiles/MicrowaveImagingSystemTechnologies.htm

PROJECT OBJECTIVES

The goal of this project is to assess the market for breast cancer therapy monitoring, and

recommend the best approach to penetrate the market. Specifically, our goal is to answer the

following questions related to the patient workflow, market sizing, and market penetration

strategies:

• Patient workflow

o What are the standards of care for treating breast cancer patients with NACT?

o Who are the key decision makers in the treatment planning process?

• Market sizing

o What is the current size of the breast cancer therapy monitoring market?

o How fast is this market expected to grow over the next five years?

• Market penetration strategies

o Is the therapy monitoring market an attractive opportunity for MIST?

o What course of action should MIST pursue in order to bring its device to

market?

This project is expected to contribute to a full business plan to be completed by MIST.

METHDOLOGY

Given the novelty of our research topic and the absence of widely accepted standards of care

regarding the use of NACT, we focused our efforts on conducting primary research. We

interviewed medical oncologists, surgical oncologists, and radiologists. We contacted over 60

physicians at over 40 medical centers, and were able to interview 16 of them. While the

majority of our contacts were from academic medical centers in the Northeast, we also spoke

with physicians at community centers in other regions of the country. A list of interviewees as

well as the interview guide can be found in the Appendix.

Our primary research was supplemented with secondary research, consisting of medical

journals, scientific articles, and the National Comprehensive Care Center’s clinical guidelines

for treating breast cancer. While these sources were helpful in framing some of the issues 3

associated with NACT, we found the physician interviews to be most influential in shaping our

understanding of the patient workflow and market size.

National Comprehensive Cancer Network. NCCN Clinical Practice Guidelines in Oncology, Breast 3

Cancer, V.1.2010.


We used the results of our primary and secondary research as inputs into a customized market

sizing model that projects the size of the breast cancer therapy monitoring market, in

patients, scans, and dollars over the next five years. Using this model, we performed

sensitivity analysis on two key uncertainties: price per scan, and penetration among patients

with Stage III breast cancer. We also analyzed the economic attractiveness of the device to

several types of providers, using published data on breast cancer volumes.

PATIENT WORKFLOW

As illustrated in Figure 1, four types of physicians are involved in the diagnosis and treatment

of breast cancer.

Figure 1: High-Level Breast Cancer Treatment Workflow

Given that our project centers on evaluating the NACT market, we focused our efforts on

understanding the patient flow after diagnosis. To understand each part of the workflow in

more detail, we interviewed surgical oncologists, medical oncologists and radiologists. Key

insights from our discussions are outlined below.

Surgical Oncologists and Medical Oncologists Medical and surgical oncologists, the physicians responsible for treatment planning, prescribe

NACT for two reasons. Primarily, NACT is used as a cancer control measure that prevents

“distal failure,” the spread of cancer to surrounding organs from the breast. Secondarily,

NACT is used to downstage the size of the breast tumor(s) to potentially prevent mastectomy,

or full breast removal, in favor of lumpectomy, a less-invasive surgery resulting in partial

breast removal.


Given these reasons for treatment, NACT is considered useful for two classes of women.

Women with inflammatory breast cancer (IBC), a rare and aggressive disease that blocks the

lymph vessels in the skin of the breast, always receive NACT. In addition, women with Stage III

breast cancer, which is characterized by locally advanced tumors, are considered for NACT.

The women with Stage III breast cancer who typically receive NACT are the elderly, who are

not candidates for mastectomy given the fragility of their health, or those women involved in

clinical trials.

Apart from IBC and Stage III patients, NACT is not part of the current standard of care for

breast cancer patients. This lack of protocol creates significant variation in NACT utilization

across different hospitals. The estimates collected from our physician interviews ranged from

10-20% at Dartmouth-Hitchcock Medical Center in New Hampshire and Danbury Hospital in

Connecticut, to 30% at M.D. Anderson Medical Center in Texas, to 40-60% Cancer Care

Northwest in Washington.

Part of this variation in NACT utilization could be due to the sequence of treatment planning

process at the cancer centers. An oncologist at Cancer Center Northwest explained that at her

clinic, surgeons and medical oncologists work together on an integrated care team to

determine which treatment regime will work best for the patient. As a result, NACT

utilization rates are relatively higher than those at other clinics. At other centers, patients

are routed directly to surgery after a biopsy detects cancer, and thus the decision to give the

patient NACT is never considered.

Future Expectations for the Market

Surgical and medical oncologists expect growth in the number of patients receiving NACT for

three reasons: shifting patient demographics, pending research regarding improved survival

benefits, and logistical issues associated with scheduling breast reconstruction surgery.

Breast cancer disproportionately affects older women. From 2002-2006, the average age of

diagnosis was 61. Whereas only 10.5% of women diagnosed are between the ages of 35 and 4

44, 23.7% are diagnosed between the ages of 55 and 64. As the baby boomers reach 5

retirement age, an increased number of women will fall into this higher risk pool. As

discussed previously, elderly patients are more likely to utilize NACT than younger patients,

National Cancer Institute, “SEER Cancer Statistics Review, 1976-2006”.4

Ibid.5


due to other preexisting conditions that make mastectomy infeasible. For example, if a

woman has a weakened heart, she may not be a candidate for mastectomy, and therefore

NACT is required to downsize the tumor.

In addition to the changing demographics, the results of pending research regarding improved

survival benefits could increase NACT usage. I-SPY 2 is a collaborative effort among the

National Cancer Institute, academic investigators, the US Food and Drug Administration, and

the pharmaceutical and biotechnology industries to predict therapeutic response to

chemotherapy regimens with imaging and molecular analysis. The study is being conducted in

an “adaptive phase II clinical trial design in the neoadjuvant setting for women with locally

advanced breast cancer.” While the results of the study are not yet conclusive, many of the 6

oncologists we spoke with believe that it is likely to demonstrate that NACT provides

additional survival benefits over adjuvant chemotherapy.

Finally, increasing logistical challenges associated with scheduling breast reconstruction

surgery may lead to an increase in NACT usage. A single breast reconstruction can take six to

eight hours, and a bilateral reconstruction between ten and twelve. Given the time required

to perform these operations, surgeons generally schedule their time months in advance. Many

women who want to have reconstruction book it and opt for NACT in the meantime.

Radiologists There was some variety in the use of monitoring therapies across the radiologists we

interviewed. While there was consensus that patients would receive an initial screening

before beginning NACT, there were disparate views regarding whether this patient would be

monitored using an imaging modality during the chemotherapy regime.

Pre-NACT imaging

Before beginning a NACT regime, medical oncologists order a baseline imaging test to

determine certain characteristics of the tumor, such as size and exact location. It is important

to obtain this baseline information before chemotherapy begins so that the medical team will

be able to determine who the tumor has responded to the treatment.

Mid-cycle imaging

Very few radiologists recognize the value in mid-cycle imaging. While one radiologist

explained that he conducts mid-cycle imaging on approximately 30% of his patients, the

Barker, AD, CC Sigman, GJ Kelloff et all. “I-SPY 2: An Adaptive Breast cancer trail Design in the Setting 6

of Neoadjuvant Chemotherapy”. Clinical Pharmacology & Therapeutics (2009) 86. 97-100


majority of radiologists we spoke with did not find this necessary. For women with large

tumors, changes can often be detected through a clinical exam, instead of through imaging.

For most women, surgery is the end goal, and because of this some radiologists believe that

the additional cost associated with mid-cycle imaging cannot be justified.

Post-NACT imaging / Pre-operative imaging

Among the radiologists we interviewed, there seemed to be consensus on the purpose of pre-

operative imaging: it allows the surgeon to have advanced information about the quantitative

characteristics of the tumor. Because the rationale for NACT is often to downstage the tumor

so that the patient can receive a lumpectomy rather than a mastectomy, it is important for

the surgeon (and the patient) to know the extent to which the chemotherapy has been

successful in achieving this end.

A Journal of Clinical Oncology study found that mastectomy candidates who receive NACT are

8% more eligible for lumpectomy (67.8% vs. 59.8%). It is interesting to note, however, that 7

the medical community is starting to see an increase in the percentage of women who elect

the more invasive surgery, even after they become eligible for a lumpectomy. Among younger 8

women in particular, patients seem to be opting for the more aggressive surgery in order to

avoid the subsequent monitoring exams and potential recurrence that are associated with

lumpectomy. While it is unclear whether this trend will reverse in the future, it is clear that

the advanced information about the size of the tumor may be less important to the surgeon if

he will be performing the more aggressive surgery anyway.

MRI as the Modality of Choice

The therapy monitoring that accompanies NACT is used to determine the response of the

cancer to the treatment. While there was consensus that MRI was the best modality that is

currently available, radiologists are not completely satisfied with it. The most commonly

raised concerns are about false positives and false negatives. One radiologist mentioned a

recent patient whose pre-operative MRI showed that the tumor had decreased in size

substantially, creating a sense of relief for that patient. Upon operating on the patient,

however, the surgeon found that the tumor had fractured into multiple smaller pieces that

Fisher, Bernard, John Bryant, Norman Wolmark, et al. “Effect of Preoperative Chemotherapy on the 7

Outcome of Women with Operable Breast Cancer.” Journal of Clinical Oncology, Vol. 16, No 8. August 1998. pp. 2672-2685.

Nelson, Roxanne. “Breast Cancer Patients Increasingly Opting for Mastectomy. Medscape Medical 8

News. 1 August 2009.


had been dispersed throughout the breast. While this story is merely an anecdote, it reflects

a broader concern among radiologists that the information inferred from current monitoring

modalities may be inaccurate.

However, the role of monitoring is more dubious in its potential benefits: a U.K. study

analyzing the role of MRI in breast cancer found no significant benefit in terms of reducing

the reoperation rates in the six months following the initial procedure . This indicates that 9

monitoring during NACT does not provide any data for surgical planning, but underscores the

reports that therapy monitoring is primarily used for biological information gathering on

tumor response.

Monitoring therapy as preference sensitive care?

Amid the fact that medical oncologists and radiologists see limited value in the use of

monitoring therapies, they did suggest that patients tend to be in favor of monitoring

imaging. Perhaps as shared-decision making practices become more widely adopted and the

patient has more influence over the type of treatment she receives, we will see an increase

in the use of monitoring therapy.

MARKET SIZING

In order to determine the relevant market size for the MIST device, we created a five-year

forecast for the breast cancer therapeutic monitoring market. Based on our analysis, we

estimate a market size of $6.2M in 2009, growing to $14.8M in 2014. The section below details

our methodology for this approach.

Our analysis was based on a number of assumptions about the expected changes in the market

drivers:

Turnbull, L. “Magnetic Resonance Imaging in Breast Cancer: Results of the COMICE Trial.” Breast 9

Cancer Research, 10 (Supplement 3) July, 2008. pp. 10.


Figure 2: Market Sizing Assumptions

While the majority of our inputs are self-explanatory, our determination of the Stage III NACT

treatment rate, monitoring therapy penetration, and scans per patient per year warrant

further explanation.

Stage III NACT Treatment Rate

Our estimate of the current percentage of patients receiving NACT (17%) is based on the

compilation of our physician interviews. The majority of the physicians we spoke with

assumed that approximately 15-20% of all Stage III breast cancer patients receive NACT. While

the majority of the interviewees suggested that the utilization of NACT for Stage III patients

would increase, only Dr. Kaufman was able to give us a sense of the potential magnitude of

that growth. Dr. Kaufman suggested that in the future, he would expect approximately half of

all women diagnosed with Stage III breast cancer to receive NACT. The primary reason for this

increase includes the aging of the population, which will result in a larger proportion of cases

being inoperable at the time of diagnosis due to pre-existing health concerns (e.g. weak

heart, weak lungs). We assumed that NACT penetration for breast cancer patients would

increase linearly, from 17% today to 50% in 2014.

Monitoring Therapy Penetration Almost all of the physicians we spoke with employed some form of monitoring for patients

receiving NACT. However, one physician at Massachusetts General Hospital reported that only

15% of the patients receive monitoring therapy. Other physicians also described the use of

Forecast Drivers Assumption Data Source

US Female Population 1% CAGR US Census Population Projection

Breast Cancer Incidence (per 100,000)

123.31 (2009)132.41 (2014)

American Cancer Society (2009); Journal of Clinical Oncology (forecast)

% IBC Patients 4% Physician interviews

IBC NACT Treatment Rate 100% Physician interviews

% Stage III Patients 30% American Cancer Society

Stage III NACT Treatment Rate 17% (2009)50% (2014) Estimate from physician interviews

Monitoring Therapy Penetration 90% Estimate from physician interviews

Scans / Patient / Year 2 Estimate from physician interviews

Price per scan $200 June 2006 MIST Presentation


clinical exams for patients with particularly large tumors. Based on our research, we believe

that almost all patients undergo NACT receive some sort of monitoring. However, we used a

90% penetration assumption rate in our model to account for these two alternative

perspectives.

Scans per Patient per Year

As discussed earlier in this section, the majority of the medical oncologists we spoke with

order imaging prior to beginning NACT and at its completion. We counted both of these scans

as “therapeutic monitoring,” as we assumed that the MIST device could be used in both

instances.

Based on these assumptions, our market sizing model delivered the following results:

Figure 3: Therapy Monitoring Market Size ($000)

In order to test the sensitivity of our model to different assumptions, we evaluated scenarios

in which both the price per scan and the Stage III NACT penetration could increase

significantly. As Figure 4 illustrates, even with very generous penetration and pricing

assumptions, we estimate a total market size of approximately $132M in 2014. Given the

presence of an installed base of competing modalities, we believe it is unlikely for MIST to

realize the full market opportunity.

Patient Flow 2006 2007 2008 2009 2010 2011 2012 2013 2014US female population (MM) 151.7 153.1 154.6 156.0 157.5 159.0 160.5 162.0 163.6

Growth rate 0.9% 0.9% 0.9% 0.9% 0.9% 0.9% 0.9% 1.0% 1.0%Incidence (per 100,000) 123.04 123.15 123.24 123.31 125.23 127.10 128.92 130.69 132.41

Growth rate -0.9% 0.1% 0.1% 0.1% 1.6% 1.5% 1.4% 1.4% 1.3%Number of patients (000s) 186.7 188.6 190.5 192.4 197.2 202.0 206.9 211.7 216.6

% with inflammatory breast cancer 4% 4% 4% 4% 4% 4% 4% 4% 4%Inflammatory penetration 100% 100% 100% 100% 100% 100% 100% 100% 100%

% with Stage 3 breast cancer 30% 30% 30% 30% 30% 30% 30% 30% 30%Stage III penetration 17% 17% 17% 17% 23% 30% 37% 43% 50%

# Treated with NaCT (000s) 16.8 17.0 17.1 17.3 21.7 26.3 31.0 36.0 41.1 % treated with NeoAdjuvant Chemo 9% 9% 9% 9% 11% 13% 15% 17% 19%

Penetration of monitoring therapy 90% 90% 90% 90% 90% 90% 90% 90% 90%Patients with monitoring therapy 15.1 15.3 15.4 15.6 19.5 23.6 27.9 32.4 37.0 Treatment frequency (scans/patient) 2 2 2 2 2 2 2 2 2 Price per scan ($) 200$ 200$ 200$ 200$ 200$ 200$ 200$ 200$ 200$ Monitoring Market Size ($000s) 6,049$ 6,110$ 6,171$ 6,233$ 7,809$ 9,456$ 11,172$ 12,958$ 14,813$


Figure 4: 2014 Therapy Monitoring Market Size ($000)

CUSTOMER ECONOMICS

To further evaluate the market potential of the MIST Device, we analyzed the economic

attractiveness of the system for healthcare providers (Figure 5 and 6). We created scenarios

of the potential number of patients, scans, revenues, and utilization rates for three

institutions covered in our physician interviews: DHMC, Cancer Care Northwest, and the MD

Anderson Cancer Center. This shows the potential revenues associated with different patient

volumes and frequency of NACT usage. We also compared these potential revenue levels to

the costs to purchase the device, using a unit cost from the 2006 MCC presentation.

Our analysis shows that a specialized therapy monitoring device would only be cost-effective

for the largest cancer centers. For example, if the device were to be used at MD Anderson

Cancer Center, a location with high patient volume and frequent NACT usage, a single unit

would achieve approximately 30% utilization and could generate $360K in revenues. However,

at lower volume (but still reasonably large) institutions, like DHMC and Cancer Care

Northwest, therapy monitoring procedures would have under 10% utilization and generate

under $100K of annual revenues. This does not compare favorably with the investment

required to acquire the device, as the depreciation charges would account for a high

proportion of revenues. (As a comparison, publicly-traded diagnostic imaging companies, like

Alliance Healthcare Services and RadNet, operate with depreciation expense at 11% and 18% 10

of sales, respectively. ) Based on this analysis, we conclude that, for all but the largest 11

hospitals, the MIST device must either serve a larger patient population (like screening

applications), or target a wider variety of medical conditions (like MRI or PET) in order to gain

the utilization levels required to make the device economically attractive to providers, or

make a stand-alone imaging services business work. One potential area for future exploration,

which is outside the scope of our project, is whether the MIST device can be adapted for use

Price Per Scan ($)% of 14,813$ 100$ 200$ 250$ 500$ 1,000$ Stage III 10% 2,729 5,458 6,822 13,644 27,288 Patients 25% 4,483 8,966 11,207 22,415 44,829 w/ NACT 50% 7,407 14,813 18,517 37,033 74,066

75% 10,330 20,661 25,826 51,651 103,303 100% 13,254 26,508 33,135 66,270 132,539

Alliance Health Services. Form 10-K. U.S. 10 March 2009. Securities and Exchange Commission.10

RadNet, Inc. Form 10-K. 16 March 2009. U.S. Securities and Exchange Commission.11


with a wide variety of conditions in order to increase the utilization rate and revenue

potential.

Figure 5: Therapy Monitoring Revenue Opportunity

RECOMMENDED MARKET PENETRATION STATEGIES

The following section describes our thoughts on how to target the breast cancer market.

Given the relatively small size of the therapy monitoring market, and the entrenched role of

biopsy in the diagnostic market, we believe that the screening market represents the most

attractive opportunity to apply the MIST technology to breast cancer treatment. However, as

noted in MIST’s earlier efforts, there are formidable barriers to entry in the screening market,

given the need for larger-sized clinical trials (Figure 6). The following sections present some

preliminary recommendations on alternative approaches for gaining the funding necessary to

penetrate this market.

Figure 6: Breast Cancer Clinical Trial Cost Estimates

Segment the screening market

Facility DHMCCancer Care Northwest MD Anderson

# of new breast cancer patients / year 400 300 3,000 % of Patients Treated with NACT 15% 50% 30%

# of Patients with Therapy Monitoring per year 60 150 900 Patients / week 1.2 2.9 17.3

# of Scans / Patient 2 2 2 Scans / Year 120 300 1,800

Utilization @20 mins / scan & 40 hrs / wk 2% 5% 29%Price / Per Scan 200$ 200$ 200$ Total NACT Therapy Monitoring Revenue / Year 24,000$ 60,000$ 360,000$

Unit Sales Price (from 2006 MCC project) 56,250$ 56,250$ 56,250$ Depreciation length 5 5 5 Annual Depreciation Costs 11,250 11,250 11,250 Depreciation costs / scan 93.75$ 37.50$ 6.25$

% of sales 47% 19% 3%

Indication # of Patients Cost / Patient Total Cost SourceTherapy Monitoring 400 2,500$ 1,000,000$ Coversations with clientScreening 50,000 500$ 25,000,000$ DMIST Trial

Note: Does not include costs of developing clinical organization


A couple of the radiologists we interviewed mentioned that the high-risk patients screening

market have more favorable economics. These patients can be identified by genetic tests that

determine the likelihood that a woman develops breast cancer over the course of her life. 12

Whereas a patient receiving NACT will only require 1-2 scans over the course of her

treatment, high-risk patients need to be scanned each year. This suggests that the lifetime

revenue per patient is greater in the high-risk screening market than in the therapeutic

monitoring market. While MIST was previously deterred from entering the screening market

due to the high costs associated with completing the necessary clinical trials, perhaps this

hurdle would not be as significant given the smaller potential patient pool. We also wonder if

there are sub-segments of the patient population that would particularly prefer the unique

attributes of the MIST device (e.g., comfort).

Explore licensing deals with large incumbents The largest diagnostic imaging companies have the financial means to bring the MIST

technology to market. Interestingly, most of these companies offer a variety of imaging

modalities (Figure 7), which suggests that they are not “locked-in” to a particular technology,

and may be interested in MIST’s technologies. We think MIST should pursue in business

development conversations with these companies for several reasons, including gaining

knowledge of the market and their strategies, potentially selling them on a licensing deal,

and gaining feedback on any important areas where the MIST technology needs to be

improved.

Figure 7: Leading Diagnostic Imaging Companies

Engage government agencies and patient advocacy groups

Company

Imaging Modality

Mammograph

yMRI CT PET

GE Healthcare ✓ ✓ ✓ ✓Hologic ✓Phillips Healthcare ✓ ✓ ✓Siemens Healthcare ✓ ✓ ✓ ✓Toshiba Medical Systems ✓ ✓

Average women have a 12.5% chance (1/8) of developing breast cancer over their lifetime. High-risk 12

women are those whose lifetime risk is over 20%.


Breast cancer detection and treatment is still an area of significant unmet medical need. The

NCI Biomedical Imaging program provides funding for research and clinical trials to speed the

development of promising new products. An example would be the program’s funding of the

DMIST clinical trial for digital mammography. Current programs include opportunities include

funding for Phase I and II clinical trials. Additionally, patient advocacy groups would be 13

another constituency to approach for potential funding, or support. Some groups have helped

direct federal funds toward specific areas of biomedical research, and others, like the Susan 14

G. Komen Breast Cancer Foundation, offer grants to pursue Phase I and Phase II clinical

trials. 15

CONCLUSION

Our primary research suggests that the monitoring market for NACT is not sufficiently large to

justify an independent company. Even after making generous assumptions regarding the NACT

penetration for Stage III breast cancer patients and the price per imaging scan, we do not

believe that therapy monitoring for NACT represents a viable market opportunity.

Furthermore, after looking at the economics from the customer perspective, it does not seem

that many practices have the patient volume to justify a device designed explicitly for breast

examination.

Going forward, we recommend that MIST focus its efforts on the larger screening market, in

addition to therapy monitoring, and identify partners to help finance the necessary clinical

trials to obtain approval for the device. Many of the large imaging companies provide multiple

imaging modalities, suggesting that they may be receptive to MIST given its relative price and

comfort advantages over MRI. Alternatively, we suggest that the company pursue grants from

the federal government or non-profit organizations as a source of potential funding for

clinical trials to validate the technology.

National Cancer Institute. Cancer Imaging Program: Current Funding Opportunities. Retrieved 2 13

November 2009 from http://imaging.cancer.gov/researchfunding/current/currentfunding/.

Dresser, Rebecca. “Public Advocacy and Allocation of Federal Funds for Biomedical Research.” The 14

Milbank Quarterly, Vol. 77, No. 2 (1999), pp. 257-274.

Susan G. Komen Breast Cancer Foundation. “Promise Grants, Special Focus – Prevention. Retrieved 2 15

November 2009 from www.komengrantsaccess.org/files/2010/kgc/pg_rfa.pdf.


http://www.komengrantsaccess.org/files/2010/kgc/pg_rfa.pdf

http://imaging.cancer.gov/researchfunding/current/currentfunding/

APPENDICES

Appendix 1: Physician Interviews Breast Surgeons Dr. Isabel Bedrosian, MD Anderson Dr. Kevin Hughes, MGH Dr. Kari Rosenkranz, DHMC

Medical Oncologists Dr. Susan Burdette-Radoux, Vermont Cancer Center Dr. Mary Chamberlin, DHMC Dr. Michael Cohenuram, Danbury Hospital (CT) Dr. Kim Dittus, Vermont Cancer Center Dr. Peter Kaufman, DHMC Dr. Joni Nichols, Cancer Center Northwest Laura Urquhart, APRN, DHMC

Radiologists Dr. Betsy Angelakis, Lahey Clinic Dr. Elizabeth Dann, DHMC Dr. Daniel Indelicato, University of Florida Dr. Asa Nixon, Concord Hospital (NH) Dr. Michael Peterson, Avera Sacred Heart Cancer Care (SD) Dr. Stephen Poplack, DHMC


Appendix 2: Physician Interview Guide Treatment planning

1. What types of specialists are involved with the treatment of breast cancer? Of treating patients with neoadjuvant chemotherapy?

2. Who designs a patient’s treatment plan?

3. Who makes the decision to include monitoring therapy? At what point are different specialists consulted?

4. How long does a typical course of neoadjuvant chemotherapy take?

5. Which patients typically receive neoadjuvant chemotherapy?

a. Description of tumor type / patient profile

b. Percentage of patients receiving neoadjuvant chemotherapy

6. Of those receiving neoadjuvant chemotherapy, which patients typically receive monitoring therapy?

a. Description of tumor type / patient profile

b. Percentage of neoadjuvant chemotherapy patients receiving monitoring therapy

Conducting the monitoring exam

1. Who conducts monitoring exams?

2. How much time is allocated for a monitoring exam?

3. How often do they occur? How long is a course of treatment (e.g., monthly over six months)?

4. What modality is used (e.g., MRI, PET)?

5. When and where are the exams done (e.g. Hospital, Office)?

Changing the treatment plan (if necessary)

1. If the tumor has not changed in size, how frequently is the treatment regime modified (i.e. what would an oncologist/radiologist do with the information from the monitoring device? Why is it valuable to get this information after 1 month instead of 6 months, as you would with an MRI?)

Purchasing Decisions for Imaging Equipment

1. Who purchases the imaging equipment used for monitoring (e.g., MRI, PET, etc.)?

2. Whose budget is it (Hospital, radiology or oncology dept, individual clinics)?

3. Who are the decision makers? Who is involved in / influences the purchase decision?


BIBLIOGRAPHY

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