Verisante Advances Cancer Detection Technology In Two Largest Markets
Verisante Technology (VRS – $0.15), a medical device company committed to commercializing innovative systems for the early detection of cancer, started the application process with the Food and Drug Administration (FDA) to market and sell the Aura, a device for the detection of skin cancer, in the United States.
Aura is a non-invasive Raman spectroscopy system designed to aid medical professionals in the detection of skin cancer. The system provides valuable information by identifying spectral changes associated with the biochemistry of skin cancer cells in less than a second; providing immediate results.
The Aura’s patent protected technology was jointly developed by the BC Cancer Agency and the University of British Columbia Faculty of Medicine, and has already been used in a human clinical study spanning six years. Clinical results published in 2012 show that the technology offers a statistically significant improvement in the detection of skin cancer over current methods.
Largest Medical Device Market
According to the Skin Cancer Foundation, skin cancer is the most common form of Cancer in the United States, the largest medical device market in the world. With more than 3.5 million skin cancers in over two million people diagnosed annually in the US alone, the number of new cases of skin cancer are greater than the incidences of breast, prostate, lung and colon cancer combined.
Melanoma, the deadliest form of skin cancer, accounts for one death every 57 minutes in the United States. The overall 5-year survival rate for a patient whose melanoma is detected early, before the tumor has spread, is about 98 percent but falls to 62 percent when the disease reaches the lymph nodes, and 16 percent when the disease metastasizes to distant organs.
Core Deal In China
Verisante also signed a Letter of Intent with a strategic partner in the People’s Republic of China, to sublicense (1) the world-wide rights to develop and commercialize the Core Raman technology with the ClearVu endoscopic camera system for the detection of lung cancer, and (2) the China marketing rights for other Core series products to an LLC Company in China.
Verisante will received a 30% equity stake in the LLC, and the parties agree to list the LLC onto the Chinese OTC market as soon as the LLC meets listing standards, with the longer term goal of upgrading the LLC onto the ChiNext Tire of the Shenzhen Stock Exchange.
Other material terms of the Letter of Intent include:
• The Partner agrees to an equity investment of $2,150,000 into Verisante over the next 24 months;
• The LLC agrees to fund the development and commercialization of the Core device for lung cancer, including all regulatory costs associated with medical device approvals in China; and
• The LLC agrees to pay Verisante a $1 million development fee upon regulatory approval and sale of the LLC’s first Core product.
Second Largest Medical Device Market
Setting up a company in China and listing it there is an excellent idea as the country has approximately one third of the lung cancer cases in the world, and is currently the second largest buyer of medical devices globally. So the LLC is bound to generate lots of attention. In addition, with so many patients and 21,000 hospitals, it’s critical for Verisante to have a presence in China.
This deal also provides Verisante with a stable capital flow over the next 24 months which will help to advance the Aura’s FDA approval process, and will support sales and marketing efforts for the Aura in Canada, Europe and Australia, where the device is already approved.
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