Cizzle Biotechnology Holdings plc (LON:CIZ) Executive Chairman Dr Allan Syms caught up with DirectorsTalk to discuss the CIZ1B early lung cancer test achieving CLIA accreditation in the United States and what this means for commercial adoption, royalties, and global expansion.
Q1: The CIZ1B test has now achieved CLIA accreditation, and it can be ordered by licensed healthcare providers in the United States. What does this milestone mean practically for Cizzle Biotechnology and what are the next steps in driving adoption of the test?
A1: Well, let’s first say this is an absolute stellar day in the history of the company. We’ve been working very hard at bringing a test to defeat lung cancer, and it’s been a long and an arduous journey simply because it’s a complex thing to do. It sort of reminds me of President Kennedy’s great view about going to the moon and in many ways, yes, we do things because they’re hard, not because they’re easy.
In this particular case, finding a solution to early diagnosis of lung cancer is a hard thing to do but it’s very meaningful with 5,000 people losing their life every single day to lung cancer simply because we don’t have an early diagnostic test.
Today, we’re so pleased to announce that our test has now been approved for clinical use in the United States.
So, what that really means for us is that for the first time, people can now actually have them tested for the CIZ1B biomarker. For the first time in history, as of today, it is possible in the United States, at least, for a patient to be tested. Hopefully, the more people we test, then the greater is the chance that we’ll get early diagnosis and the greater chance that we’ll end up saving lives.
It’s a stellar day for the company, I think a great day in the whole diagnostic world, looking for early detection of lung cancer.
It really leads us from having done all this hard work into finally being able to test patients live and take the business forward in a completely new and very exciting commercial direction.
Q2: Now, shareholders have been waiting to see the company’s technology move from development into commercial use. How should investors think about the pathway from today’s announcement to meaningful royalty revenues for Cizzle?
A2: I think that’s the great segue question is that, yes, we have been largely a development phase business, having said that, of course, we have successfully achieved early royalties from advanced royalty deals in the United States. Our licensing agreement in the United States provided for $2.4 million of advanced royalties ahead of the test actually going live. The company has benefited from a cash flow from that royalty arrangement deal.
The reason why we got that at that time was simply because there’s a risk attached to the timing of when it would come to market and that risk was really borne by our licensing partners in the United States because they were prepared to pay upfront ahead of when the test was going to go live. That’s the price, if you like, they pay for getting an exclusive licence to our technology.
So that’s great but to recognise that revenue, ultimately, it means people have to be tested, people have to be paid. So as of today, it now opens that door so that royalties will come from the sale of commercial tests.
Now, we obviously, these are advanced royalties, so it won’t hit us immediately. We have to catch up with the amount of advanced payments we’ve had. Going forward the rest of this year and into next year, royalties will start flowing from commercial tests being performed in the United States.
So, we’ve now transitioned from being development into a full-blown revenue-generating biotechnology business. Great day for the company, great day for the shareholders.
Q3: Many early cancer detection companies, they’re focused on DNA and multi-cancer screening approaches. What differentiates the CIZ1B biomarker test and why do you believe that it can play an important role in lung cancer detection?
A3: This goes back to the heart of the actual science and the technology, and you will hear a lot about multi-cancer detection tests based on DNA. It’s a fundamental principle of difference between the two different types of technology.
In the multi-cancer DNA detection tests, they are seeking, in these so-called liquid biopsies, to find the presence of very small quantities of DNA in the blood. When you think some of these very early stage tumours are only maybe one or two millimetres in size, the amount of material that actually gets out of the tumour and into the blood is almost infinitesimally small. It’s such a small level that DNA technology today struggles to detect the presence of it.
So, what you’ll have seen in the press recently by some of the larger multi-cancer detection tests is they found it difficult to detect small quantities of DNA in the blood. Quite good at when the tumour is already large and well-developed but what the market needs, what patients need, what doctors need, is a test that actually can detect very small tumours.
That’s where Cizzle comes in with CIZ1B. The reason why that’s different to DNA is nature gave us a gift and the gift that nature gave us was that when CIZ1B, which is a protein, is spilled out from those very small tumour cells, it’s not washed away. Even though it’s small quantities, just like DNA to begin with, it binds to a blood protein called fibrinogen and that blood protein acts like a sponge. In fact, rather than being washed away and not being able to see the protein, as it is very often in the case of DNA, in our particular case, the sponge, i.e. the fibrinogen, the sponge actually concentrates the level.
So, actually we’ve got a natural basis of concentrating our CIZ1B biomarker so when we take a sample of blood, all we need to do is look for that sponge and we will find a lot of our CIZ1B biomarker.
Really, it’s down to nature and the good scientists from the University of York who discovered this that allows us to actually better detect very small tumours with very high sensitivity.
So, very different technologies and the big difference therefore is our test is working and has been approved today. I think that’s fantastic testament to all the work that’s been done at the University of York and Professor Coverley’s team there to make this and bring this to the market so that people can benefit from it.
Q4: Now, alongside the progress with the CIZ1B test, Cizzle has spoken about expanding commercial relationships internationally and then developing additional diagnostic opportunities. What should investors be watching for over the next 12 months as the company seeks to build on this momentum?
A4: Sometimes we struggle a little bit in trying to explain what type of business we are because we are a biotechnology business. We’re a clinical diagnostics business. Really at the heart of the business, we’re actually a licensing business and we license our technology and know-how to others who are biotechnology businesses.
We license our technology to those that supply clinical laboratories in their own right. We’re not a clinical laboratory. So, at the heart of our business model is the ability to work with groups who are prepared to pay us royalties on the deployment of our technology in their individual markets.
Today is a major announcement because one of the world’s largest markets, one of the greatest needs for doing early lung cancer detection is that a company there is now able to actually deliver that test and generate royalties for us. As a licensing business, we need to do the same in other markets.
Now, this is a UK invention. This came from Yorkshire. I’m sure there are many proud Yorkshire people today. That’s world-beating science coming from Yorkshire that is going to really change the whole way in which we do lung cancer diagnostics.
So for us, the UK is very important and so we do want to partner with the NHS, and we do want to partner with companies allied to the NHS. We want this to be a test that’s available in the UK.
Having said that, there are major markets around the world where lung cancer is very prevalent, often because it’s a high level of smoking, but not exclusively so. Asia-Pacific is very important. There are huge markets in China that we’ve already got a licensing deal, but we’ve been sitting on that somewhat whilst we’ve been focusing on the United States. A huge market in Japan and in India. So whole of Asia-Pac is a huge market in its own right.
We’ve then got our neighbours, our European neighbours throughout Europe. We should have this test available to them. What about the Middle East? What about Latin America? There are big global spans which need this test.
If two and a half million people are being diagnosed of cancer every year and many more are dying, then the world needs this test. We want to have a licensing strategy that takes us into each of those markets.
Obviously, that’s a challenge. Scaling this business up to that level of volume, that takes management, takes care, takes skill, and takes partnerships. It most importantly is about collaborating with other healthcare providers and marketing partners around the world.
So, shareholders should look out for news for when we’re bringing this product to another marketplace and we will report on that soon. Our goal is very clear now : We have a validated test that can be used and we want to bring this to as many people as we possibly can and really change the face of lung cancer diagnostics worldwide.
