IIQ announces extremely accurate cancer screening test - 94%

Disclosure: S3 Consortium Pty Ltd (the Company) and Associated Entities own 1,150,000 IIQ Shares and 525,000 IIQ Options at the time of publishing this article. The Company has been engaged by IIQ to share our commentary on the progress of our Investment in IIQ over time.

Ovarian cancer is deadly.

It is often only diagnosed at a late-stage AFTER symptoms have started.

With just a 5-year survival rate of ~49%.

If ovarian cancer is caught early in “stage 1”... that survival rate jumps to ~90%

BUT...

There currently are no recommended screening tests for ovarian cancer in average-risk women with no symptoms...

Due to the inadequate levels of sensitivity (lots of false negatives) and specificity (lots of false positives).

The current screening tests are intrusive and uncomfortable (biopsy requiring a tissue sample)... healthy people with no symptoms don’t like to do them.

This week our biotech Investment Inoviq (ASX:IIQ) demonstrated SIGNIFICANTLY BETTER accuracy than any other ovarian cancer screening test in the market.

IIQ released a released a biomarker validation study showing:

96% specificity and 91% sensitivity for early stage 1 ovarian cancer

96% specificity and 92% sensitivity for all stages

With an overall test accuracy of 94%

For us non-scientists this means that IIQ has a test that is onto a bona fide scientific breakthrough, an ovarian cancer screening test which is seriously accurate.

And it's a far less intrusive test too... no tissue sample via biopsy needed.

Much better to encourage regular screening in people with no symptoms.

IIQ’s biomarker validation study of its ovarian cancer screening test has demonstrated that by using exosomes (more on what these are later), the test is exceptionally accurate at identifying ovarian cancer.

With these remarkable results in hand, the next step for IIQ is to prove these results are repeatable in a testing lab...

And then commercialise.

The global ovarian cancer diagnostics market was US$1.7 billion in 2023 and is expected to reach US$2.9 billion by 2032.

And If these significant results weren’t enough, this morning IIQ released ANOTHER successful result - this time for breast cancer.

Another IIQ “shot on goal” advances: breast cancer monitoring.

This is IIQ’s most advanced cancer diagnostics product.

IIQ’s test detects 19% more breast cancers than the leading test (CA15-3 test by ~$300BN capped Roche) with an impressive 81% sensitivity and 93% specificity across a range of breast cancers.

Monitoring tests are required to make sure the breast cancer doesn’t come back again.

And according to the World Health Organisation, breast cancer is the most common cancer in the world.

2.3M new cases, 685k deaths and 7.8m survivors (5-year prevalence) just in 2020.

The global breast cancer diagnostics market was valued at US$4.3BN in 2022 and is expected to reach US$7.7BN by 2030.

While IIQ is best known for work using exosomes, its breast cancer monitoring tech is an engineered protein that detects a common cancer biomarker (neu5Gc).

This morning, IIQ published results that show that its test had low false positives for other non-cancerous diseases.

IIQ measured whether its test gave false positives on other common diseases like endometriosis, rheumatoid arthritis, type II diabetes and Chron’s disease.

The results showed no false positives for these diseases 97.4% of the time.

This is an important milestone as IIQ looks to commercialise this product.

IIQ is now in the process of moving the test to a “bead based” platform in order for it to work with high throughput instrument platforms.

Basically, IIQ needs to adapt the test for “scaled-up use” in real world in clinics, hospitals, treatment centres etc.

According to the IIQ’s quarterly report, it is in “advanced discussions” for an in-clinic study

(which we hope is finalised early next year).

These two developments across breast cancer and ovarian cancer set IIQ up for a strong 2025, as it looks to advance its monitoring and diagnosis platforms.

We Invested in IIQ back in June in the 50c placement - after 6 months of heads down work, IIQ has announced two strong positive diagnostic advancements in the space of 72 hours.

Before we get into more detail on the ovarian cancer screening and breast cancer monitoring results, here is a quick reminder of why we Invested in IIQ from our Investment Memo:

The 9 key reasons we Invested in IIQ:

1. Going after big markets with potential breakthrough technology - IIQ is developing a technology that will detect cancer and possibly neuro diseases like Alzheimer’s. These are big markets and its platform technology could capture the interest of Big Pharma if it is able to prove that it works in a clinical setting.
2. Strong board - the team from success story Polynovo - IIQ has three directors who are all with or previously with Polynovo, one of the great ASX biotech success stories of the last decade. Polynovo re-rated from ~4c to ~$4 in the space of 4 years and it remains capped at ~$1.7BN at the time of this memo.
   
3. Merchant Funds Management are the biggest shareholder - Merchant is IIQ’s biggest shareholder holding ~14% of the company. Merchant has had a lot of success investing in Biotechs including - Race Oncology which went up ~2,900% (low to high) and the IIQ’s board other company Polynovo, up ~10,025% at its highest point.
4. Platform technology to deliver multiple “shots on goal” - IIQ is somewhat different to a lot of biotechs out there in that its exosome technology platform doesn’t limit it to a binary outcome on a single clinical trial, if one catalyst doesn’t work out, there are more to look forward to.
   
   The two IIQ announcements from this week have strongly re-enforced this reason - IIQ have progressed TWO potential products with excellent results.
   
5. Tight cap structure - With just ~100M shares on issue and Merchant holding ~14% and Chairman David Williams holding ~5% there aren’t many shares floating around. This generally means that with fewer shares in the market, it’s more likely to re-rate on major news.
6. IIQ’s breast cancer test is more accurate than leading test - A recent clinical validation study of IIQ’s breast cancer test showed that it detected 19% more breast cancers than the leading test (CA15-3 test by $332BN Roche) with an impressive 81% sensitivity and 93% specificity across a range of breast cancers.
   
   Confirmed with today’s announcement - in particular across specificity (test had lower false positives).
   
7. Early stage moonshot to treat solid tumours - IIQ is also advancing a solid tumour therapy which has been shown to kill 75% of breast cancer cells in 72hrs in an in vitro (test tube) study. There is a huge unmet need for treatments in the solid tumour space where, so far, cell therapies haven’t been developed.
8. Expansion of tests to include ovarian cancer and neurodegenerative diseases (Alzheimer’s) - IIQ is looking to apply its exosome platform technology to ovarian cancer, and more recently has been working on neurodegenerative diseases such as Alzheimer’s. A blood test for the early detection of Alzheimer’s would be a major scientific advancement.
9. Large commercial opportunities from underlying technology - IIQ has an exosome isolation product which is already being sold to research groups. IIQ also has commercial agreements with Promega and a European biotech to bring IIQ’s exosome platform technology to market. Because IIQ’s exosome technologies can be applied to diagnosing and potentially treating many different diseases, we expect to see more partnerships where IIQ licences their exosome tech.

Check out our full IIQ Investment Memo to see the key objectives we want to see IIIQ achieve, risks we have identified and accepted and our Investment plan.

Ultimately, we hope that a combination of the above reasons contribute to IIQ achieving our Big Bet, which is as follows:

Our Big Bet for IIQ

“IIQ re-rates to a +$500M market cap on commercialisation of its breast cancer test, its ovarian cancer test, neurodegenerative disease test and/or its solid tumour (breast cancer) therapy.”

NOTE: our “Big Bet” is what we HOPE the ultimate success scenario looks like for this particular Investment over the long term (3+ years). There is a lot of work to be done, many risks involved - just some of which we list in our IIQ Investment Memo. Success will require a significant amount of luck. There is no guarantee that our Big Bet will ever come true.

IIQ is using its technology to develop a number of different products at various stages of commercialisation, including:

• THIS WEEK: EXO-OC, a screening test for ovarian cancer, is incredibly accurate.
• TODAY: SubB2M (not exosomes) to monitor for ovarian and breast cancer - it detects 19% more breast cancers than the leading test.
• NURO-NET, a research tool to help diagnose Alzheimer and Parkinson’s Diseases (well advanced).
• EEV-01, an exosome based therapeutic has been shown to kill 75% of breast cancer cells in 72 hours in an in vitro (test tube) study.

Commercialising any of these products on their own could be “company making” for IIQ and the company is progressing each one through to commercialization.

We think IIQ has a lot of high quality “shots on goal” with its three diagnostic products for breast and ovarian cancer (two of which we focus on today) its three exosome based research tools and its “moonshot” solid tumour therapeutic:

IIQ’s significant 94% accuracy in exosome based Ovarian Cancer screening

Compared to anything else out there, the accuracy of IIQ’s screening is exceptional - lets take a deeper look.

The ovarian cancer diagnostics market is worth around US$1.7BN, but we think putting upper bounds values on this test for the $56M capped IIQ is difficult for now.

Because quite simply, medicine has never had access to a test like this before.

Ovarian cancer is often called the ‘silent killer’ as it is asymptomatic at the early stages of the disease.

Asymptomatic” means that there are no symptoms, so a person will have the disease but not know it.

Meaning it’s harder to detect and treat early - the most important time for most cancers.

Even still, there is currently no recommended ovarian cancer screening test for average-risk asymptomatic women - and diagnosis requires a biopsy (removing tissue from the body).

It’s part of why ovarian cancer is so deadly - doctors need to rely on an ultrasound or CT scans and a blood test called CA125, followed by a biopsy to determine definitively if a patient has ovarian cancer.

Sounds intense, painful and impactful.

Certainly not something anyone would want to do regularly if they are healthy with no symptoms..

And with the current intrusive screening method, usually when a person is showing symptoms - by then, it’s often too late.

Ovarian cancer screening is a process that is in dire need of a technology upgrade - ovarian cancer has arguably been left behind by the last 45 years of cancer research.

We think one of the best things about this week's IIQ announcement is that this test “can be implemented in routine pathology testing laboratories” using a blood sample.

This holds out the prospect of a commercialisable, highly accurate ovarian cancer screening test for IIQ.

IIQ has this week proven they can really accurately identify ovarian cancer across all stages and now need to prove it can be repeated at scale in a clinical setting (a real world lab).

So how does the ovarian screening test actually work? - Exosomes.

IIQ’s large clinical pipeline of diagnostics and therapeutics use exosomes.

Exosomes are extra-cellular “containers” released by ALL human cells.

Exosomes are “nano-scale” tiny - much tinier than a human cell, and were only discovered in the early 1980s. (Source)

Exosomes carry molecular cargo (e.g. DNA, RNA, proteins and lipids) that act as cell messengers or biomarkers of disease.

Think of exosomes as the “couriers” or “postmen” for messages being delivered around the human body.

They pick up and drop off messages (biological information) to different parts of the body which trigger tailored responses from different cells.

Which makes them great as a potential source of information on disease - such as today’s ovarian cancer test.

With the successful EXO-OC biomarker validation study published this week, IIQ will move to conduct a clinical validation study next year.

This will evaluate whether IIQ’s test is clinically relevant and effective in a real-world or near-real-world healthcare setting.

This will also hopefully demonstrate how well IIQ’s technology works in a more diverse patient population.

Clinical validation would mark the final step for IIQ before the product can be taken to market - and at this point we would hope that IIQ partners with a larger company to help with marketing and distribution.

The recent deal sizes for liquid biopsies (blood tests) for cancer hover in the US$250-US$450M in upfront payment range:

(Source)

Those deal sizes are all at multiples of IIQ’s current ~$56M market cap.

At the end of the quarter IIQ had ~$10M in the bank account at 30 September 2024 and received a further ~$1M R&D Tax Incentive Refund this week.

We see that as a strong runway ahead of a series of catalysts into 2025.

The big one, a hard earned “commercialisation agreement” that most early stage biotech companies aspire to secure is something that we hope becomes a reality for IIQ in 2025 and beyond.

More on IIQ’s ovarian cancer test biomarker results...

On Tuesday, IIQ published the initial results from its biomarker validation test.

This study measured how accurately IIQ’s technology could identify ovarian cancer from a blood sample.

The results were extremely positive, showing overall a test accuracy of 94% with a sensitivity greater than 90% sensitivity at 97% (which is very accurate for a screening tool).

Sensitivity refers to a test's ability to designate an individual WITH a disease as positive.

The specificity of a test is its ability to designate an individual who does NOT have a disease as negative.

IIQ did this by using 500 blood samples and detecting the targeted biomarkers that are shown for people with ovarian cancer.

IIQ applied machine learning algorithms (a subset of Artificial Intelligence) to achieve this.

A biomarker is a measurable indicator, like a molecule or a physical trait, that helps doctors detect, diagnose, or monitor diseases and how well treatments are working.

Again, IIQ’s test was able to detect these biomarkers with remarkable accuracy.

This is bonafide frontier science - something similar that combines AI and biomarkers is being worked on by researchers at the prestigious Johns Hopkins Kimmel Cancer Center:

(Source)

That research produced a test that was able to “detect 72%, 69%, 87%, and 100% of ovarian cancer cases stages 1–4, respectively, while at the same specificity, CA-125 alone detected 34%, 62%, 63%, and 100% of ovarian cancers for stages 1–4.”

Our interpretation is that the overall accuracy of 94% across all stages of ovarian cancer for IIQ appears better than the Johns Hopkins’ test.

Thanks to IIQ’s exosome technology.

(And it blows the CA-125 test completely out of the water, we might add)

A major breakthrough - particularly in light of the glaring need for an ovarian cancer screening test.

We mentioned that this need is big.

Again, there is currently no recommended screening test for ovarian cancer for average-risk asymptomatic women in the market today.

This is because the screening tests (ultrasound + CA125 blood test) are not accurate enough to detect the disease and rely on a biopsy (which means a tissue sample) which is an invasive procedure.

Screening tests work best if they are easy to conduct, simple for labs and highly accurate.

We think that IIQ has been able to show this with the results published this week.

The next steps for IIQ will be additional clinical validation and disease specific studies.

IIQ will need to optimise its technology on a commercial instrument platform and conduct a clinical validation study to show that its test is ready for the “real world”.

There is a big prize at the end for IIQ.

Again, the global ovarian cancer diagnostics platform is around $1.7Bn and set to grow to $2.9Bn by 2032.

IIQ’s screening tool fits a big gap in the market - targeting early stage detection of ovarian cancer with a blood sample.

If IIQ can prove that its product works in the “real world” i.e. with a clinical validation study, then we think there is a large market for it to capture in this space.

IIQ proving out its “platform” play

This ovarian cancer screening tool that IIQ has developed is the first in what we hope is a future platform of detecting cancer through exosomes.

To use the exosomes - they must first be isolated.

IIQ’s exosome isolation tool is called EXO-NET.

EXO-NET is currently used in the market by research organizations like universities to study exosomes and exosome based treatments.

And EXO-NET sales are already generating some revenue for the company -

Meanwhile, EXO-OC (the ovarian cancer detection tool) was the first diagnostics tool that IIQ built from this platform, but we think that IIQ may be able to tackle other cancers with this technology if it is able to isolate and identify the right biomarkers.

This provides a blue sky opportunity for IIQ to target the larger cancer diagnosis market (currently at $19.5BN and growing to $54BN by 2032).

There are only so many resources that a small company like IIQ can allocate to developing new technologies, but we hope that if it is able to successfully deliver a commercially viable ovarian cancer screening tool...

...then it can do it again with even more cancer targets.

For a full rundown on IIQ’s extensive research pipeline be sure to watch IIQ’s latest investor presentation at the 2024 Bell Potter Healthcare Conference from two weeks ago:

(Source)

What else is IIQ working on?

Breast cancer therapy platform

IIQ is also developing an exosome therapeutic to target and kill cancer.

IIQ’s solid tumour therapy has been shown to kill 75% of breast cancer cells in 72 hours in an in vitro (test tube) study published earlier this year.

The most common form of cell therapy is CAR T therapy, which is good at targeting blood cancers but not so good at targeting solid tumours.

Solid tumours make up 90% of all cancers in adults and are the “final boss” for cell therapy platforms.

Where IIQ has an advantage over CAR T therapies is that by using tiny exosomes the theory is that it can breach and kill solid tumors more easily than a cell therapy.

IIQ has only been able to show that its platform can do this in a test tube, next it will need to show progress with animals (likely mice).

Screening and monitoring for Alzheimer’s Disease

IIQ has validated that its technology can successfully isolate brain-derived exosomes in BOTH Parkinson's disease and Alzheimer’s.

This is a great “proof of concept” demonstration that it can show to bigger companies that are seeking to develop novel diagnostics - which opens the door for potential partnering opportunities as we mentioned above.

We cover this in more detail here: A “fingerprint” for the early detection of Parkinson’s? IIQ builds on previous Alzheimer’s validation

How do this week's two announcements impact our IIQ Investment Memo?

Today, IIQ published data on its breast cancer monitoring tool. This advances our number one objective for the company which is to see this diagnostics tool commercialised.

Objective #1: Commercialise breast cancer test (diagnostics)

We want to see IIQ commercialise its breast cancer test (which has been shown to be more accurate than the ~$332BN capped Roche’s test) through the following additional milestones.

Milestones
🔲 Laboratory partner to bring to market SubB2M breast cancer test to market
🔲 Real world data to support clinical adoption
🔲 Partnership with major testing provider to commercialise at scale

Also this week, IIQ delivered its EXO-OC biomarker validation data - which advances IIQ along Objective #2 for IIQ from our Investment Memo:

Objective #2: Advance ovarian cancer tests (diagnostics)

IIQ has two ovarian cancer tests it is working on “EXO-OC” which is part of the company’s exosome work stream and a more advanced test called neuCA125 which is part of the SubB2M workstream and more similar to the breast cancer test above. The SubB2M ovarian cancer test is closer to market.

Milestones
✅ EXO-OC test biomarker validation data 🔄 ➡ ✅
🔲 Commence EXO-OC test clinical validation for ovarian cancer screening
🔲 Laboratory partner to bring to market SubB2M ovarian cancer test to market
🔲 SubB2M ovarian cancer clinical validation study data

Source: 12 June 2024 IIQ Investment Memo

Securing strong data was a key risk point for the company and it has now shown that its exosome platform “works” to identify ovarian cancer.

This mitigates some of the technology risk for IIQ, particularly around the EXO-OC product:

Technology risk [mitigated]

Exosomes are still an emerging field of scientific research and there may be undiscovered drawbacks to exosomal products - in particular as they apply to therapeutics.

For example, IIQ’s preclinical research on exosome therapies may not yield the desired results or may not be deemed acceptable in the eyes of a regulatory body.

Source: 12 June 2024 IIQ Investment Memo

What’s next for IIQ?

So far IIQ has published all of the clinical data that it had in the pipeline without delay and without running out of money.

There are two more milestones that may be pushed into next year for IIQ, in particular finding a lab partner for the SubB2M tests (for breast cancer monitoring).

With the news published today on the EXO-OC test for ovarian cancer, we are now looking forward to IIQ commencing clinical validation studies next year.

Next year we are also looking forward to in vivo (mice studies) on the cancer therapy “moonshot” that also looks very promising.

Also of note is that IIQ is still looking for commercial arrangements for its exosome based tests.

These are generally research organisations that could provide immediate revenue for the company.

However, we think the bigger play is still around the diagnostics tools that IIQ is developing as well as the “moonshot” cancer therapy that will hopefully be advanced more next year...

What could go wrong?

We see the main risks for IIQ right now as “delay risk” and “technology risk”.

The company is looking for a lab partner to help commercialise its breast cancer monitoring tool. If negotiations are delayed and it takes longer to commercialise this product then IIQ may need to raise funds before it is able to sign a commercial agreement.

Another risk for IIQ is “technology risk”.

Although the data published by IIQ today was extremely promising, there is still a risk that the technology fails in a clinical validation study.

The technology is still at an early stage, and while IIQ has limited revenue streams, there are always risks with emerging technologies.

Our IIQ Investment Memo

You can read our Investment Memo in the link below.

This memo provides a short, high-level summary of our reasons for Investing. We use this memo to track the progress of all our Investments over time.

In our IIQ Investment Memo, you can find the following:

• What does IIQ do?
• The macro theme for IIQ
• Our IIQ Big Bet
• What we want to see IIQ achieve
• Why we are Invested in IIQ
• The key risks to our Investment Thesis
• Our Investment Plan