Medifocus (OTCQX:MDFZF; TSX-V:MFS) is raising $6-million to $10-million to expand the sales and marketing of its minimally invasive Prolieve device as a treatment for benign prostatic hyperplasia (BPH), or enlarged prostate, and to expand its use to include the treatment of prostatitis and prostate cancer.
“Our current marketing plan for Prolieve is focused on increasing market share as a minimally invasive device in the urology marketplace,” Augustine Cheung, founder and CEO, says in an interview with BioTuesdays.com. “However, our long-term growth strategy is to market and sell Prolieve as a better alternative to prescription drug therapy.”
Dr. Cheung, who is also the founder and a former CEO of Celsion (NASDAQ:CLSN), developed Prolieve with the same Medifocus product development team while at Celsion a decade ago.
According to Dr. Cheung, the size of the market for prescription drug therapy for BPH is estimated to be $4-billion a year for major industrial countries, and, if patients on “watchful waiting” are included, the market could double to $8-billion.
Following premarket approval of Prolieve by the FDA, Celsion sold the device to Boston Scientific (NYSE:BSX) in 2007. Boston marketed Prolieve as an alternative to more invasive microwave and RF devices and gained rapid success in market penetration from 2007 to 2010. Celsion and Boston Scientific together invested about $100-million in the development and commercialization of Prolieve.
In the fourth quarter of 2011, due to changes in corporate focus, Boston Scientific decided to phase out the marketing and sales of Prolieve. A year later, Medifocus purchased the Prolieve assets from Boston Scientific.
So far, Medifocus has invested $16-million to purchase the Prolieve assets, create an FDA-compliant sales and marketing infrastructure and build a sales team. Medifocus also has finalized a strategy to grow the Prolieve business.
Between the fourth quarter of 2012 and the fourth quarter of 2014, Columbia, MD-based Medifocus has grown its Prolieve user base from 60 urology offices that were inherited from Boston Scientific to more than 200 urologist user sites. For fiscal 2013, Prolieve sales were $4-million.
“Moving forward, we are targeting Prolieve sales revenue to urologists to increase at a rate 20% per quarter. At this rate of sales increase, we believe that the Prolieve business, with a urologist focus alone, should become profitable by the first quarter of 2015,” he predicts.
“However, we are committed to continue to further develop and grow Prolieve sales according to the original vision we created for the product, which is to make Prolieve a versatile, minimally invasive therapeutic male health medical device with clinical indications for treatment of BPH, prostatitis and prostate cancer,” he adds.
The combined market potential for the three treatments worldwide is estimated to exceed $25-billion.
Medifocus owns two comprehensive technology platforms that are protected by more than 100 U.S. and international patents. Prolieve was developed based on the Endo-thermotherapy platform, which covers catheter-based focused microwave heating technology and utilizes natural body openings to deliver precise microwave thermotherapy to a diseased site.
Some 85,000 patients have been safely treated with Prolieve. The device has a current Medicare reimbursement rate of $2,200 per treatment, of which the company receives $800 to $1,200 and doctors $1,000 to $1,200. By comparison, it costs an estimated $4,000 to stay on daily medication for BPH for two years.
The prevalence of enlarged prostate increases from 8%, in men aged 31 to 40, to 40% to 50%, in men aged 51 to 60, to over 80%, in men older than 80. According to researchers, nearly 15 million men in the U.S. and 30 million men worldwide experience symptoms of BPH, of which an estimated 25% require immediate pharmaceutical or surgical treatment. As the world’s population ages, the number of men with the condition is expected to increase.
Dr. Cheung points out that the prescription drug therapy market for BPH is in the hands of general practitioners (GPs), or primary care physicians, in the U.S. To reach this market, Medifocus has created a marketing/sales strategy and is working with several large GP groups to initiate feasibility demonstrations to establish the best approach to market and sell Prolieve to GPs and primary care physicians.
“This feasibility demonstration will provide the data for a marketing plan to penetrate the prescription drug therapy market,” he adds. The company plans to roll out marketing and sales to GPs and primary care physicians in 2015.
A Prolieve treatment involves a 45-minute in-office procedure, which combines transurethral microwave thermotherapy with cooled and pressurized water balloon dilatation to deliver simultaneous thermotherapy and compression of the constricted prostatic urethra. The unique combinational therapy results in both immediate and long-term BPH symptom relief.
The Prolieve system consists of a treatment module, which provides microwave energy for thermotherapy and pressurized-cooled water for dilatation therapy via a proprietary disposable treatment catheter. The treatment module also serves as system control center and provides graphics display for the visualization and monitoring of the treatment progress.
Dr. Cheung says the system is less invasive than typical surgical options, with far fewer side effects and complications than drug therapy and typical surgery. “Prolieve treatment has the potential to become the standard of care for BPH,” he adds.
Outside of the U.S., Dr. Cheung says the company plans to pursue sales and marketing of Prolieve with strategic partners, initially targeting Asia.
A new joint venture company, Medifocus Asia, is preparing a submission package to the China FDA for pre-market approval of Prolieve and has entered into negotiations with potential distributors in Japan, Korea and India. One possible strategy being considered for Asia is to commercialize Prolieve via the establishment of BPH treatment clinics.
Beyond BPH, Dr. Cheung says Medifocus intends to initiate clinical trials later this year to seek additional approvals of Prolieve for the treatments for prostatitis and prostate cancer. Prostatitis is a painful inflammation of the prostate gland that tends to affect men under the age of 50, while BPH is more common in men above the age of 50.
“We are in active discussions with prominent leading authorities in prostatitis to come up with a clinical study design to demonstrate the feasibility and efficacy of our product for that indication,” he admits.
Medifocus is also in talks with drug companies that are developing heat-activated cancer drugs in order to design a pivotal trial with Prolieve for treatment of prostate cancer. The trial would combine a heat-activated drug delivered intravenously and released only at the prostate by Prolieve.
The company’s second technology platform is the APA Microwave Focusing, which was invented at MIT and licensed to Medifocus. The platform’s first indication is for the treatment of locally advanced breast cancer.
Dr. Cheung explains that a needle probe inserted at the tumor center provides a feedback signal to focus microwave energy to target the tumor site. The focused microwave energy beam also destroys microscopic tumors along its path throughout the breast.
In an earlier Phase 2 study, thermotherapy delivered by the APA 1000 Breast Cancer System, when combined with neoadjuvant chemotherapy, achieved an average of 88% tumor size reduction, compared with 59% shrinkage from using chemotherapy alone.
“With neo-adjuvant chemotherapy, focused heat can significantly improve breast cancer patients’ chance for survival and breast conservation,” Dr. Cheung contends.
He says the same treatment system can be used for most stages of breast cancer, including recurrent chest wall, primary small tumor, ductal carcinoma in situ and benign lesions.
In the fourth quarter last year, Medifocus began a Phase 3 trial of the APA 1000 in North America, with plans to enroll 238 breast cancer patients with large tumors, of which 119 will receive chemotherapy and 119 chemotherapy and heat. The primary endpoint is to demonstrate 40% or more tumor shrinkage over chemotherapy alone.
The company expects to conduct a midpoint analysis of the trial in 2015, and Dr. Cheung suggests that an early submission for premarket approval is possible if 50% or more tumor shrinkage is attained. Otherwise, the trial is designed to continue until 2016.
“Based on our earlier work, we believe that we have a high probability of meeting or exceeding the primary endpoint,” Dr. Cheung says. “We also believe that the market potential for the APA 1000 Breast Cancer System should be comparable, if not greater than that of Prolieve.”