Periodic Reporting for period 1 - HyperCollar3D (Improving the Treatment of Head and Neck Cancer without Additional Side Effects)
Reporting period: 2018-05-01 to 2018-09-30
Our mission at Sensius is making the treatment of H&N cancer more effective without undesirable additional side effects. And the key innovation to achieve this mission is hyperthermia. There are numerous scientific evidences that warming up the tumor to about 42 ˚C improves its sensitivity to the radiotherapy treatment. In fact, there are already multiple solutions of the market offering devices for hyperthermia working on several types of cancer, but not for H&N cancer. The reason is that the area where this cancer grows hosts multiple vital parts (such as the spinal cord or the trachea) and the risk of damaging them with the high temperature poses significant technological challenges. After 5 years of intense R&D, we have overcome most of these challenges and we now have the first device worldwide (the HyperCollar3D) that offers hyperthermia for H&N cancer. The HyperCollar3D has already been tested with over 70 patients at the Erasmus Medical Center in Rotterdam with encouraging results: the first evaluation confirms that when the radiotherapy is combined with the HyperCollar3D, patients have over 50% more chance to survive after two years. This means that the same treatment can be delivered with better results, or that 'toned-down' treatments will be more effective.
We have protected the IPR of the device with a European Patent (the US patent is being evaluated), published our results on peer-reviewed journals, put together a strong senior team of 5 people: 3 entrepreneurs with an excellent track record in the MedTech field, the electrical engineer (with a PhD in medical electromagnetics) who has been the main inventor of the HyperCollar3D, and a prominent radiotherapist, who is also the chairman of the European Society of Hyperthermic Oncology. We have also done a market study to identify where our device could enjoy the largest commercial success, with the result that the Netherlands and Germany should be our beachheads with the rest of the EU following after 12 month, and the US market can be tackled 6 months after the first two markets.
The Phase 1 feasibility study had three objectives.
Objective 1. Understand the legal and regulatory requirements in the tier-1 countries (NL, DE, USA), including how much and what kind of clinical data should be gathered, and which stakeholders we need to involve
Objective 2. Validate pricing strategy and willingness to buy in our tier-1 markets
Objective 3. Secure the support of six radiotherapy clinics in the 1st-tier target countries (at least one each in NL, DE, and USA) to define the technical and functional requirement of the final product, and pilot it once it will be ready (Q3 2020).
Main results of objective 1:
The HyperCollar 3D is a class IIb medical device under the 2017-745 Medical Device Regulation (MDR). However, there is a minor risk that this will change to a class III, based on clarification of classification rule 11. In general, the current transition of the EU regulatory landscape from MDD towards MDR adds risks to the regulatory conformity process and therefore the time to market. This risk applies to the medical device industry as a whole, and not specifically to Sensius, but it still represents a risk for our commercial strategy.
A Quality Management System (QMS) will be set up that supports the above activities by starting with documenting the development process. After that, the QMS can be gradually extended.
Main results of objective 2:
• In all countries, respondents stated that purchasing this device was more likely than a leasing model, especially for larger hospitals
• The US is the largest and most attractive market, due to hospital’s extensive financial resources and existing reimbursement codes for other hyperthermia treatments. Among US hospitals there is a broader range of willingness-to-pay for innovative devices than in Germany and Switzerland.
• Germany and Switzerland are similar for the high willingness to pay, but lacks of broad reimbursement. In Germany, there is a scheme (Zusatzentgelte) that could be a bridge to permanent funding. In both countries, the engagement of Key Opinion Leaders is the key for commercial success.
• The two countries differ in a few aspects. Switzerland is obviously a smaller market, and only a few hospitals will have enough patients to warrant purchasing the device. However, in Switzerland, per patient fees were considered as an acceptable financing method, but administrators in Germany were resistant and saw it as an “extra” cost.
• Germany and Switzerland can be developed in a two-step approach: initially focus on larger university hospitals with an interest in the technology and reasonable capital endowment and once appropriate DRG & fee for service codes in place the market can be expanded to cover more hospitals.
• Large university hospitals in Switzerland and Germany will have the financial resources to purchase the device at the upper end of the range, or even above it depending on their interest in the technology
• Post-purchasing & marketing support offered by Sensius would be well-received
Main results of objective 3:
We have talked with six institutes (the list is in Sec. 2.4) and secured their support. Three of them are in the Netherlands (in addition to the Erasmus Medical Center, in which we are already active), one in Germany, one in Swizerland, and one in France (which is not among our tier-1 countries but it is still very relevant to our European commercialization strategy). Having letters of support signed has proved to be much harder than expected. We have received two new letters of support (in the annex) and we have 6 more signed in the recent past.
We also attended several events within the framework of the project (or the month before/after it). In particular they are:
• ESTRO 38, the annual conference of the ""European Society for Radiotherapy and Oncology"". Held in April 2018 in Milan and attended by Gerard van Rhoon & Martin Paulides, co-founders of Sensius. It was useful to make contacts that were used to achieve objectives 1 and 2 of the project.
• Startup OLÉ, event for European start-ups supported by the European Commission and Startup Europe. Held in April 2018 in Salamanca (Spain) and attended by Paul van den Biggelaar and Peter van Paassen, co-founders of Sensius. Over 10,000 people attended, and Sensius won the pitching award.
• ESHO 2018 – 32nd Annual Meeting of the European Society for Hyperthermic Oncology. Held in May 2018 in Berlin (Germany) and attended by Paul van den Biggelaar and Peter van Paassen, co-founders of Sensius. Sensius sponsored the event, and in particular the "" 2nd Annual Young Investigators Award"". The Phase 1 project had just started, and it was an ideal moment to draw the attention of a wide audience on it.
• EBAN Winter Summit, flagship event of the European Business Angels Network. Sensius has been invited to pitch as winner of the EBAN Scale-up of the month, May edition (special edition for the SME Instrument winners). We won the final pitch competition.
• Start JLM award. Start JLM gives entrepreneurs the opportunity to connect and benefit from interaction with prominent local tech leaders in Jerusalem in a 7-day immersive program, featuring interactive fireside chats and panels, specially designed how-to workshops, site visits at leading companies and exclusive networking meet-ups with the city’s start-up community.
During the execution of the Phase 1 project, and thanks to it, Sensius was awarded a very prestigious prize: the EBAN scale-up of the month in a special edition dedicated to the winners of the SME Instrument."
Hyperthermia has been used in cancer treatment for at least a decade, though never for H&N cancer due to the lack of an adequate device to heat the tumor without damaging the surrounding tissues. This is now possible thanks to the technical advances in RF antennas and the efforts we have made in our innovative software, which allows radiotherapists to optimally control of the microwave radiation so that the target tumor area is heated at the desired temperature but the surrounding healthy tissue is not unnecessarily heated.
No other company in the world commercializes hyperthermia solutions for the H&N cancer, because this area is extremely complicated to treat. We expect that the competition will not catch up at least for the next 4 years due to the edge that we have built in terms of technology and IP.
The business opportunity is enormous. Only in the EU, Switzerland, and USA we could have about 50,000 of new users every year that increase to 200,000 new users globally. Our customers will be the radiotherapy clinics delivering the treatment and the public/private insurance system that would reimburse the costs. We have already made a business model that shows that these actors have a quick Return on Investment (treating about 70 patients every year would be enough for a clinics to recoup all their costs) and the societal impact can potentially be huge. Getting the HyperCollar3D to market according to our commercialization plan would also have a terrific financial impact on our company: at the end of 2023, we expect to have about €44 million in revenues (between running contracts and contracted future revenues), servicing a portfolio of at three dozens customers in the EU and USA. According to our forecasts, we will break even in 2022 with an EBITDA of €806k that will increase in 2023 to €2.4 million.
Our ultimate ambition is to be the world market leader for hyperthermia, expanding also beyond H&N cancer.