One To Watch: NeoDynamics plans on getting a cut of MNC-dominated breast biopsy market

NeoDynamics is looking to raise 50 million Swedish Krona to take its minimally invasive breast biopsy technology - designed for more precision tissue sampling and thereby help improve diagnosis - through to European commercial launch. The Swedish company will come up against established multinationals corporations such as C.R. Bard, its acquirer BD and Hologic, but it has ambitious plans to start taking share in the global market three years from now.

What’s happening

NeoDynamics’ initial public offering is underway, with the Swedish company looking to raise 50.5 million Swedish Krona ($5.6 million) to fund the final leg of its journey to CE mark its NeoNavia breast biopsy system and the subsequent launch of the product in Europe.

NeoDynamics is issuing up to 6.16 million shares and 3.08 million warrants in total, and these are offered as units, with each unit comprising two shares (8.20 Swedish Krona per share) and one warrant that entitles the holder to subscribe to one new share at 8.20 Swedish Krona at a later scheduled date.

The subscription period to these issued units run until November 14, and if all goes well with the securities sale, NeoDynamics plans to list on Sweden’s Spotlight stock market (formerly known as Aktietorget) on December 7, under the ticker symbol NEOD.

The Lidingö-based company says it has already secured about 73 percent of initial issue amount in subscription commitments.  

Sedermera Fondkommission is the financial advisor to NeoDynamics and Nordnet Bank AB is acting as the underwriter.

What’s the potential

With improvements in diagnostic imaging technologies and increased accessibility of breast cancer screening programmes around the world, the number of breast cancer cases is rising in tandem. NeoDynamics estimates that around 2.1 million women are diagnosed with breast cancer every year, worldwide, and this figure is increasing by 5 percent per year. This, in turn, will drive the demand for breast biopsy procedures.

The market opportunity is attractive for NeoDynamics but it faces big rivals who already have an established portfolio of breast biopsy instruments and accessories. These dominant players include C.R. Bard (now part of Becton Dickinson, which also sells biopsy devices gained from Carefusion). Bard offers five different brands of core needle biopsy instruments and three different brands of vacuum-assisted biopsy instruments. Then there is Hologic, which has the Brevera breast biopsy system and Affirm prone breast biopsy system, both boasting advanced imaging capabilities. Another player in this market is Devicor Medical Products (part of Leica Biosystems), which has the Mammotome breast biopsy system; this is for vacuum-assisted biopsy that can be done in different imaging modalities.

NeoDynamics’ NeoNavia system is differentiated from these rival products by the mechanism in which the biopsy needle is inserted into the lesion.

NeoNavia uses a proprietary micropulse technology that positions the biopsy needle millimeter by millimeter into the suspect tumor, explained NeoDynamics CEO Anna Eriksrud. This pneumatic insertion mechanism differs from core needle biopsy offered by systems such as C.R. Bard’s Magnum, Marquee or Max-Core, where the needle is typically fired into the suspect tumour, penetrating the target tissue at a set depth of around 2cm. This does not allow the breast radiologist or surgeon to control the action after having pushed the fire button, according to Eriksrud. "[NeoNavia’s] micropulse precision of slowly placing the needle where you want gives better control every step of the way," she told FirstWord MedTech.

In the case of vacuum-assisted biopsy, the needles currently used to perform this are manually forced into position. While this might allow more control over the needle positioning, the limitations are that certain lesions, (especially very posterior lesions) are not accessible for biopsy.

These biopsy methods also mean that the sampling needle tip can easily displace the lesion, resulting in non-representative samples being collected instead. NeoDynamics has developed a proprietary sampling needle Flexipulse, which does not have a sharp extended tip and is designed for particularly delicate procedures. The Flexipulse has an open sample chamber to adapt the length of the sample collected to the size of the tumor.

"Today’s equipment [either for core biopsy or vacuum-assisted biopsy] used by radiologists are not developed for today’s challenges," Eriksrud commented. "Smaller and smaller suspect lesions are being identified in mammography, the ultrasound machines are getting continuously upgraded, but the lack of precision biopsy devices still makes the job difficult. Also tumours located near the chest wall, close to implants and other delicate areas such as axillary lymph nodes are even more difficult with today’s outdated instruments."

The clinical back-up

While NeoDynamics was founded in 2015, the R&D behind the NeoNavia system goes back to 2012 in Sweden’s Karolinska Institute. The company had already taken an early version of the product through CE marking and this first-generation device has been used over 300 procedures in around 15 university hospitals in Germany, the UK, Sweden and few other countries.

NeoDynamics was able to gain important feedback from the clinicians who used this first-generation device in their daily clinical routine and this helped to define the parameters for the second-generation, commercial version of NeoNavia.

From these early adopters, the company also got clinical validation of its underlying technology. At the 2017 annual meeting of the British Society of Breast Radiology in Dublin, radiologists from the Royal Marsden in the UK did a poster presentation describing their experience with the NeoNavia device. Their findings showed that the device was able to "safely increase the precision of ultrasound-guided core biopsy of technically difficult lesion" and also suitable for biopsy of small breast lesions and lesions close to the chest wall. "The device yielded 100 percent diagnostic histology results from all lesions, and in three out of the six cases, the histology was upgraded from normal/benign to malignant, significantly altering management," the researchers noted in their poster.

When asked about any health economics argument to using the NeoNavia device, Eriksrud said the time it takes to take a biopsy using NeoNavia would be similar to existing rival devices, if there was a head-to-head comparison. "On the other hand, if radiologists can have a [good quality] representative sample taken the first time, there will be less insertions of the needle into the breast (today there are 3-4 needle insertions at each biopsy procedure) and there might be fewer re-biopsies needed, where patients are called back to the hospital," she added. This then presents a potential cost-saving benefit.

What next

The company is about to embark on its PULSE, an eight-center study of the new NeoNavia system with the Flexipulse probe, which will enrol 140 patients. The primary endpoint concerns diagnostic accuracy and will look at the rate of successful biopsies using the system. Secondary endpoints will focus on the advantages of using micropulses for needle insertion and lesion targeting.

NeoDynamics said in its IPO prospectus that it plans to submit its CE mark application for the new NeoNavia system in Q3 2019, and launch the CE marked product at the end of that year.

Should the IPO goes as planned and the issued units are fully subscribed, the funds should take the company to the point of that product launch.

And if the warrants that are issued in the IPO are fully exercised at the end of 2019, bringing in a fresh injection of new capital of around 25 million Swedish Krona ($2.8 million), this would enable NeoDynamics to execute its commercial expansion plans into the US and China, and also into other biopsy markets such as for prostate and liver cancers.

"Our aim is to be profitable in 2021, have a global market share of breast biopsy instruments of a least 2 per cent in 2022 and continue to grow rapidly in breast cancer biopsy and within other cancer biopsy areas as well," Eriksrud told FirstWord MedTech.


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