The Life Sciences Report: What is Miraculins Inc.'s (MOM:TSX.V) focus?
Christopher Moreau: Our business plan is to focus on the in-licensing or acquisition of diagnostic and risk assessment technologies for diseases where there's a significant worldwide need. We have two lead technologies: One is our rapid, needle-free screening device for diabetes called the Scout DS®, and the other is a screening device called PreVu that noninvasively measures cholesterol in the skin as a new biomarker for risk of coronary artery disease. Right now, our primary drive is the establishment of the Scout DS® Diabetes Screen in multiple market channels.
TLSR: How does Miraculins distinguish itself from its competitors?
CM: The most significant differentiator is the technology itself. These are unique, proprietary technologies that have had tens of millions of dollars invested in them, and they fill very important niches in the global healthcare market space. They are the only technologies of their exact kind in the world, have extensive clinical data behind them, and significant intellectual property protection as well. In addition, we are approaching the market with creative, nontraditional strategies toward retail distribution for these technologies, to accelerate getting them to those individuals most at risk and in need.
TLSR: What is unique about your lead diabetes technology?
Our Scout DS® Diabetes Screen is the world's first noninvasive screening test for prediabetes and type 2 diabetes. This technology has the potential to have a tremendously positive impact on healthcare models worldwide as it does not require a needle, blood draw, fasting or waiting.
The Scout DS® uses visible light to rapidly scan the skin for biomarkers that are associated with prediabetes and type 2 diabetes. We measure fluorescence and reflectance of the biomarkers, and run the data points through a complex and proprietary algorithm to risk assess the individual. Within 90 seconds we can advise a patient whether the result indicates elevated risk for prediabetes or type 2 diabetes, and if so, recommend that he or she go on to see a healthcare provider for further consultation and a confirmatory blood test. The Scout DS® screening test can serve as a decisive tipping point for personal healthcare awareness and management.
This is a very important development in screening for this disease, because currently there is no highly sensitive, high-throughput, low-cost screening method for pre- and type 2 diabetes that can be done rapidly and totally noninvasively.
TLSR: Why focus on diabetes?
CM: Diabetes is a worldwide problem and is being described now, in some quarters, as the fastest growing disease in history. There are an estimated 400 million (400M) people worldwide with type 2 diabetes, with one person dying from diabetes every seven seconds. The American Diabetes Association has estimated that more than 80M people in the U.S. alone are prediabetic, and that 90% of them don't know it. You can have diabetes for years without any outward symptoms while damage is done internally, and that's why it's very important to screen people as early as possible to make them aware of their risks and educate them on what they can do to improve and better manage their health. Left untreated, complications from diabetes can include blindness, kidney disease, heart disease, stroke, amputations, nerve damage, and erectile dysfunction. But when people are diagnosed with pre- or type 2 diabetes, and follow their treatment plans, they can greatly reduce their chances of experiencing these and other health problems.
TLSR: What are the future plans for Miraculins?
CM: Miraculins recently announced a major distribution deal with a very large pharmaceutical company in China, and one of our principal focuses for 2015 will be to continue to advance the regulatory approval process with the China State Food and Drug Administration (SFDA) for the Scout DS®.
We're estimating that it will take about 12–16 months to achieve SFDA approval, and the steps require steady, ongoing management. China is a massive market for us, as the country has a significant population with type 2 diabetes, estimated to be 100M (60% remain undiagnosed), and has nearly 500M prediabetics as well. When we receive SFDA approval, that will trigger an initial order from our Chinese distribution partner worth US$15M in Scout DS® devices. The total deal value is projected to be US$90M over five years.
Our distribution partner in China—Cachet Pharmaceutical Co. Ltd. (SHE:002462)—is publicly traded and has a market cap in excess of US$700M. Cachet engages in the wholesale and retail sale of pharmaceutical products in China, including brands such as Bayer (BAYRY:OTCMKTS), Novartis AG (NVS:NYSE), Johnson & Johnson (JNJ:NYSE) and Medtronic Inc. (MDT:NYSE), so this was a very important partner, and an important market for us to be able to start work on.
An additional focus for Miraculins in the near term will be filing presubmission documentation with the U.S. Food and Drug Administration (FDA), in first quarter 2015, regarding the de novo classification of the Scout DS® device. This is a next step in securing marketing clearance in the United States. The Scout DS® has received regulatory clearance in Canada, and has been CE Marked for sale and distribution in the European Union. The de novo process is generally considered to be appropriate for "novel" medical devices with risk profiles that do not warrant Class 3 designation, which is a more expensive and time-consuming approval process. A Miraculins delegation met with the FDA in Washington last year to receive the agency's input on Scout DS® as well.
We also plan to conduct a number of pilot programs for the Scout DS® in two key markets in 2015. The Scout DS® can be offered to the public through special screening kiosks in the retail pharmacy and pharmacy/grocery segment, which serves millions of customers in convenient, neighborhood settings annually. And the Scout DS® can also be made available for workplace screenings. Many large corporations have screening programs for staff, and we believe there is a significant opportunity to add Scout DS® diabetes screenings to those workplace programs.
TLSR: What is the key message about Miraculins that you'd like to get across to shareholders?
CM: The key message is that, with diabetes becoming a global pandemic and screening methods being woefully inadequate, Miraculins is ideally positioned with the Scout DS® to capitalize on resolving the massive unmet clinical need. Our sales and distribution agreement in China, which is structured to move us into a revenue position and advance us out of the micro-cap space we are currently in, and our plans for innovative pilots in retail market channels here in North America and abroad, cause me to believe that this is a very promising moment in time for the company, and for investors to take note of our plans. We've been a research and development company for many years, and I believe we're poised now for significant growth.
Christopher Moreau was appointed president and chief executive officer of Miraculins in February 2007. Previous to his appointment, he served as vice-president, business development for Miraculins after joining the company in 2006. Mr. Moreau brings more than 25 years of experience in the areas of business development, financing, sales, marketing and operations management. He has held several senior executive management roles within the telecommunications and manufacturing sectors. Prior to joining Miraculins, Mr. Moreau was the president of Advansis Capital Corp., a privately held Canadian financial services provider.
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