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Tuesday, September 13, 2016

Exactus' FibriLyzer Device Solves A Big Problem For Surgical Patients

A rapid, point-of-care diagnostic for the detection of hyperfibrinolysis is a blockbuster medical device. I am a shareholder in Exactus Inc. (EXDI), and I believe the company's FibriLyzer™ product is such a potential device. Below is an introduction to blood hemostasis, the importance of monitoring fibrinolysis during surgery or in patients with trauma, and why Exactus' Fibrilyzer™ could be a significant leap forward for healthcare providers in operating room (OR), emergency room (ER), and potentially even out in the field.

Blood Hemostasis - To Bleed Or Not To Bleed

Hemostasis (haemostasis) is the process which causes bleeding to stop. It involves coagulation, and the formation of clots to prevent hemorrhage. There are three major stages of hemostasis: vasoconstriction, the formation of a platelet plug, and then the formation of a fibrin clot. Platelet activation factors, the coagulation cascade, and antithrombotic control mechanisms all keep the delicate balance of hemostasis intact. Once a clot has formed, fibrinolysis and clot degradation factors are activated to allow for the growth of healthy endothelial tissue.

As noted above, the intricate balance between coagulation (clot formation) and fibrinolysis (clot dissolution) is what keeps us from either bleeding to death or clotting to death. Clots must be localized to the site of the tissue damage or else uncontrolled thrombosis can lead to a blockage of the blood vessel (embolism). Similarly, the clotting mechanism needs to have a rapid off switch so that clots can be quickly cleared once the bleeding has stopped. Excessive bleeding during surgery or after major trauma can lead to hemorrhages and exsanguination. Conversely, excessive clotting can also have dire consequences, including stroke, myocardial infarction, embolism. Both have dire consequences.

Fibrinolysis - Why Do We Care?

Fibrinolysis is a normal body process that prevents blood clots that occur naturally from growing and becoming problematic. Primary fibrinolysis refers to the normal breakdown of clots, whereas secondary fibrinolysis is the breakdown of blood clots due to a medical disorder, medicine, or other cause (1). Uncontrolled fibrinolysis may cause severe bleeding.

In fibrinolysis, a fibrin clot, the product of coagulation, is broken down. Plasmin the primary enzyme responsible for fibrinolysis - i.e. the lysing of a fibrin around a clot. As plasmin cuts apart the fibrin mesh, circulating fragments are cleaved by other proteases and cleared by the kidneys and liver. Importantly, plasmin is produced in an inactive form, plasminogen, in the liver. Although plasminogen cannot cleave fibrin, it still has an affinity for it and is incorporated into the clot when it is formed.

The process of converting plasminogen to the active plasmin is activated by tissue plasminogen activator (tPA) and urokinase. Endothelial cells of the blood vessel slowly release tPA when damaged. The circulating tPA then activates the entrapped plasminogen, and the fibrin mesh of the clot is broken down. Urokinase and tPA are themselves inhibited by plasminogen activator inhibitor-1 and plasminogen activator inhibitor-2 (PAI-1 and PAI-2). PAI-1 and PAI-2 are produced by the endothelium during the healing process. Similarly, alpha 2-antiplasmin and alpha 2-macroglobulin inactivate plasmin. Plasmin activity is also reduced by thrombin-activatable fibrinolysis inhibitor (TAFI), which modifies fibrin to make it more resistant to the tPA-mediated plasminogen.

- Implications in trauma & disease management

Trauma, defined as an unintentional injury, is the third leading cause of death in the U.S. and number one cause of death for those under the age of 44 (2). Trauma accounts for 30% of lives lost in the U.S., or approximately 200,000 individuals per year (3). Injuries result in over 40 million visits to the ER each year, with 16 million requiring admission to the hospital, 2.1 million into the ICU (4). And, despite a profound regulation through hemostasis, least one-quarter of civilian trauma patients (5) and one-third of all military trauma patients (6) will present with a laboratory-defined coagulopathy. This trauma-induced coagulopathy (TIC) is associated with increased transfusion requirements, the risk of complications, and increased mortality (7).

Surgeons and emergency medical professionals will typically attempt to control post-traumatic bleeding with compression, embolization, or suture repair/ligation. However, idiopathic coagulopathy or uncontrolled bleeding is a failure of hemostasis and extremely difficult to stop with mechanical interventions. Importantly, the relationship between the laboratory-based abnormalities on which current research efforts are focused and clinically evident coagulopathic bleeding is unclear. Although progress is being made on understanding the mechanisms of TIC, it continues to be a significant diagnostic and therapeutic challenge (8).

For example, a study published in Trauma in July 2010 found that coagulopathy, or uncontrolled primary fibrinolysis (hyperfibrinolysis), increases the odds of mortality in trauma patients by an astonishing 64% compared to those with transient fibrinolysis (29%) or no fibrinolysis (18%) (9). This is because hemostatic conditions can change significantly in only minutes, thus making it extremely challenging for treating physicians to know exactly which thrombin or anti-thrombin factors to administer to save a patient's life (10).

- Is the patient bleeding to death or clotting to death? 

A landmark study called CRASH-2 looked at the use of tranexamic acid (TXA) to reduce blood loss in surgical patients with traumatic bleeding, with no apparent increase in vascular occlusive events. The trial enrolled over 20,000 patients and found that the use of TXA, a synthetic antifibrinolytic lysine agent, reduced the risk of all-cause mortality in high-risk patients, 14.5% vs. 16.0% (p=0.0035), as well as bleeding mortality, 4.9% vs. 5.7% (p=0.0077) (11). Unfortunately, physicians don't always know when to use TXA because the clinical definition of fibrinolysis is not standardized, measurement of fibrinolytic activity is incredibly inefficient, and unnecessary use of TXA can be associated with increased risk of venous thromboembolism (12).

A rapid and accurate measure of fibrinolytic activity eludes medical professionals in the OR and ER. Increased knowledge of a patient's potential to clot might vastly reduce the potential for bleeding complications during surgery. Bleeding risks, clotting or hemorrhaging, is a major risk during surgery, along with complications from anesthesia and infection (13). Additionally, increased fibrinolytic activity is a direct signal for diagnosing acute thrombotic events such as myocardial infarction, strokes, deep venous thrombosis, and pulmonary embolisms (14, 15).

Measuring Fibrinolytic Activity - No Easy Task

The Euglobulin Lysis Time (ELT) is the only approved and current "gold standard" for measuring fibrinolysis. ELT is performed by mixing citrated platelet-poor plasma with acid in a glass test tube. This acidification causes the precipitation of certain clotting factors in a complex called the euglobulin fraction. The euglobulin fraction contains the important fibrinolytic factors fibrinogen, PAI-1, tPA, plasminogen, and to a lesser extent alpha 2-antiplasmin. After precipitation, the euglobulin fraction is resuspended in a borate solution. Clotting is then activated by the addition of calcium chloride at 37° C (16). The entire process takes between 2-4 hours (17), and thus is highly impractical for OR or ER situations.

Physicians, recognizing the need for real-time fibrinolytic information as well as the inadequacy of ELT, have turned to alternative viscoelastometric methods, although not approved, to gather information on fibrinolysis. Thromboelastography (TEG®) and rotation thromboelastometry (ROTEM®) are point-of-care devices that detect systemic changes in in vivo coagulation and coagulopathy. Thrombelastography measures shear elastic modulus during clot formation and subsequent fibrinolysis.

TEG and ROTEM are fairly accurate at detecting hyperfibrinolysis, but ineffective for lower-grade levels of fibrinolysis. And, although the tests are far more efficient than ELT, they still require a fair degree of technical expertise and training (18). The equipment is rather expensive, and the use of reagents along with yearly service and maintenance costs (19) makes the devices impractical for smaller hospitals not looking to spend tens or even hundreds of thousands of dollars. TEG and ROTEM also require a significant amount of blood and 15 to 20 minutes to complete (20). Although this is a monumental leap forward from ELT, a patient's levels of fibrinolytic activity in trauma situations can be unpredictable (21) and change as rapidly as minutes. Again, this makes them impractical for many OR or ER situations.

It is for this reason that physicians need a rapid, point-of-care diagnostic that can monitor fibrinolytic activity in real-time. The ability to provide true real-time feedback to physicians for optimal, case-specific administration of critical treatments to counteract hyperfibrinolysis during surgery or trauma management would be an important diagnostic tool, not only to improve outcomes and potentially save lives, but in simpler "low-hanging fruit" measures including using less blood during transfusions or less thrombotic or anti-thrombotic drugs during surgery.

FibriLyzer - The First Rapid, Point-of-Care Diagnostic for Fibrinolysis

Exactus Inc. is developing a handheld, point-of-care, rapid diagnostic for the detection of fibrinolysis called FibriLyzer™. FibriLyzer is the first point-of-care device delivering accurate measurements of fibrinolytic activity using a single drop of blood in only 30 seconds. The device requires minimal training and is highly efficient to perform, even during critical OR or ER procedures. As noted above, this type of real-time information will help surgeons prevent damage to surrounding tissue (or death) due to a clot or bleeding risk, monitor for elevated risk of thrombotic events including myocardial infarction, stroke, deep-vein thrombosis, and pulmonary embolism, and monitor fibrinolytic activity during the administration of blood products or thrombotic and antithrombotic medications including TXA, tPA, or Factor XIIa.

The FibriLyzer works to determine fibrinolytic activity by the rate at which a proprietary synthetic fibrin matrix is dissolved by enzymes in the blood. Similar to a blood glucose monitor, a biosensor strip is inserted into the reader. A drop of blood is placed in an opening on the device and transported via capillary pressure, which begins the test. As the synthetic matrix dissolves, a proprietary electro-active polymer (Elactomer) is released that increases the electrical current across the biosensor. The fibrinolytic activity is determined by the current reading at 30 seconds.

Exactus performed a proof-of-concept trial with a beta version of the FibriLyzer in Eastern Europe. A total of 92 patients were enrolled, including 62 patients from the cardiology ward and 30 healthy volunteers. As early as 10 seconds, cardiovascular patients displayed elevated readings which exceed the test range of healthy volunteers. Many relevant cases had received anticoagulants, and extended time had elapsed since the acute events. A post hoc detailed review of the cases yielding the highest readings showed thrombotic symptoms. Triplicate testing demonstrated a very high concordance indicating excellent reproducibility of the technology.

Exactus Inc. is currently preparing for a pre-submission meeting with the U.S. FDA to take place in the fourth quarter 2016. The company is also working to complete cGMP manufacturing for the device and has contracted with one of the world's largest manufacturers of blood glucose meters to create a commercial supply of the FibriLyzer device. The business model is similar to blood glucose meters where the device will be sold at modest margins, and each high margin consumable test strips is offered at a very economical price. Given the expected low cost per test, a patient's fibrinolytic activity can be tested multiple times during surgery at very low cost to the hospital, potentially resulting in savings through a reduction in the use of blood products or thrombotic medications.

The FibriLyzer is a Class-II medical device, meaning it can gain U.S. FDA approval through the 510(k) pathway. 510(k)-enabling studies are expected to take place in early 2017 leading to the submission of the application during the second half of 2017. U.S. FDA and EU EMA clearance is anticipated during the first half of 2018. Exactus is working on follow-on products, including a FibriLyzer rtPA product that will pair the device with an infusion pump that will deliver thrombolytic medications based on real-time fibrinolytic activity.

Conclusion - Why I'm Long Exactus, Inc.

There are several reasons why I am long shares of Exactus. Firstly, I see a tremendous opportunity for FibriLyzer, both regarding the size of the markets the company is going after and in the significant clinical void for this type of real-time, point-of-care data. An estimated 40+ million American's visit the ER each year, with 16+ million being admitted to the hospital. Roughly one-third of these individuals presents to the ER with trauma-induced coagulopathy. Existing diagnostic methods to monitor fibrinolytic activity, including ELT, TEG, and ROTEM, are highly inefficient and limited by the fact that they can be performed only at specialty centers by trained personnel, offer variable reproducibility, and require fresh samples of blood (22).

Secondly, Exactus has a significant opportunity outside of the ER, specifically in the ICU or OR with patients undergoing cardiovascular surgery, organ transplantation, orthopedic surgery, and obstetrics. These are enormous markets with patient populations measuring in the millions. Monitoring for risk of MI, stroke, PE, or DVT during cardiac surgery alone targets tens of millions of patients. Even at a very affordable price per strip, Exactus still has a billion-dollar opportunity with FibriLyzer.

Thirdly, this seems like the exact type of product a larger medical device manufacturer with a focused hospital and surgical sales force would be very interested in. Companies like Abbott, Roche, J&J, and Medtronic already play in this market and love the concept of a high margin, razor / razor blade consumable handheld device. The path to market is rather straightforward for a Class-II medical device like this, and if Exactus can start generating revenues with FibriLyzer in 2018, I do not think it will be too long before the company gets scooped up into a big med device conglomerate.

Finally, this is the quintessential "BioNap" type stock - micro-cap, unheard-of by the broader market, no sell-side coverage, but with excellent technology and the potential for enormous returns. I've met management and am confident in the path forward. I certainly see this as a tremendous upside opportunity and the timeframe looks very reasonable at likely less than two years to the first revenue. Cash is always a concern with these micro-cap ideas, but the company does have the first $1 million of the 510(k)-enabling study already funded, so the low cash balance is unlikely to impede the story over the near-term.


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I am long shares of EXDI

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