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A Special Follow Up Interview with David Esposito of Armune BioScience
August 22, 2017

Armune BioScience has developed the peer-reviewed and validated prostate-cancer-risk-assessment technology Apifiny®—a cancer specific, non-PSA blood test that may aid clinicians in the assessment of risk for the presence of prostate cancer.

We are delighted present a follow up interview with David Esposito, President and Chief Executive Officer at Armune BioScience, Kalamazoo, Michigan. Our original interview with David was conducted last year and is available here: at the following link:

STEPHEN STRUDWICK: Thank you for talking with us again! Could you please provide an update on the clinical development of Apifiny?

DAVID ESPOSITO: Apifiny is a risk assessment tool for prostate cancer with eight biomarkers to measure the immune system’s response to the cancer. We just recently launched Apifiny PRO with ten biomarkers, and then Apifiny Active Surveillance with 12 biomarkers. Apifiny PRO helps to differentiate the risk of indolent versus aggressive prostate cancer, and Apifiny Active Surveillance is used to aid clinicians in the differentiation of non-aggressive versus aggressive prostate cancer in men with a positive biopsy for prostate cancer who are not receiving treatment.

We launched the data to support these two new products at the American Urologic Association (AUA) meeting in Boston in May. They should be available for ordering in the next 30 days and we launched our initial data at the AUA to get clinicians familiar with the information. So, it’s been an exciting time for our company.

Apifiny, with eight biomarkers, will now move towards being more focused on the primary care market because primary care clinicians are looking for a risk assessment tool to help move beyond PSA-based testing. The urologist’s clinical questions are focused much more on assessing the risk of aggressive disease which is where Apifiny PRO fits to address the need in urology.

So that’s how we see the product line shaping up. We’ve completed over 11,000 Apifiny tests since launch. Reviewing our data from 2016, we are being reimbursed about $450 from insurance and patients combined. We have been working towards raising a B round of financing, but frankly, we’ve been in the middle of some discussions with a number of large diagnostic companies to either to license our library or acquire the business. We hope to make some decisions over the next few months.

That is an update on the business. We haven’t had quite the funding to fully scale commercial efforts, but we think this next round of financing will help us get there.

STEPHEN STRUDWICK: Yes, you mentioned back in 2016 that you were looking to land Series B financing as soon as possible to scale the research. I mean, is that still possible or is there going to be possible takeover?

DAVID ESPOSITO: It really depends on how these deals come together. I mean, some of the people we’re talking to very much could just land on an acquisition. The other opportunities could be to license some of our markers in prostate cancer and that may give us the ability to go back to the venture capital markets to raise money to get into lung and breast cancer, which we have markers for, or to further develop some of our companion diagnostic portfolio. So, we will just have to see.

What we’re looking at in licensing terms is pretty much focused on prostate at this point, so that, depending on upfront fees and what the distribution looks like over time, we could become pretty busy on the R&D front with regards to breast and lung. So, we’ll see.

We’re also looking at a couple of geography licenses. Two firms in China are thinking about shoring up their portfolios so we will see how our international expansion comes together with these opportunities.

STEPHEN STRUDWICK: Yes, I did notice on your website that you have new tabs now for Apifiny PRO and Apifiny Active Surveillance. You briefly mentioned the differences, the number of biomarkers that these tests detect. Could you provide us with more insight into these two initiatives?

DAVID ESPOSITO: Yes. As I mentioned, Apifiny is really answering the clinical question of what’s your risk of disease. So, we think that’s best suited for primary care, who are looking at using a triage tool to help assess risk beyond PSA-based testing.

And so, Apifiny measures eight markers optimized towards a high negative predictive value with eight markers identifying the risk of disease. Apifiny PRO has been optimized for a high negative predictive value that answers the urologists’ clinical question, basically, “what is this patients risk of aggressive disease?” This is where the big difference is with regards to these tests.

And then, Apifiny Active Surveillance is a totally new market with regards to identifying the risk of aggressive disease in somebody who already has documented prostate cancer and is not receiving treatment because the cancer was initially deemed to be non-aggressive.

STEPHEN STRUDWICK: Okay, so with Apifiny PRO and Apifiny Active Surveillance, are you adding to the 8 biomarkers for Apifiny?

DAVID ESPOSITO: Well, it’s a swap of some, so for example, today’s Apifiny has eight biomarkers, this new version of Apifiny PRO has ten, but we’re replacing two of the original, and so, it’s really only six of the original eight Apifiny biomarkers that are in that new ten-biomarker panel.

STEPHEN STRUDWICK: Okay. All right, cool. So, you’re actually now looking from a marketing perspective, you now have products for primary care and for specialists.

DAVID ESPOSITO: Correct. Yes, we’ve always tried to position ourselves to have a customized solution across the prostate cancer pathway, and I think this gets us there.

We see a lot of one test, one-product companies out there, and we just think the prudent way forward is to try to answer a clinical question at each of these decision points. In addition to clinicians, we can approach integrated delivery networks or accountable care organizations with a solution that may impact each of the decision points they see.

STEPHEN STRUDWICK: Oh, cool, okay, that’s great. I did notice on your website that you had a poster accepted at AUA that got an award. I was wondering if you could provide some insight into the data on that and some of the feedback that you got from the attendees?

DAVID ESPOSITO: Yes. So basically, that was our biomarker discovery work for Apifiny PRO. Stephen Freedland, MD, an international key opinion leader in prostate cancer, helped us with the assessment of the additional markers that would come into play for Apifiny PRO.

Steve and his research team helped our team look at 27 markers, and ultimately, prioritized 21 that seemed to be predictive of progressive disease, both in patients who had not previously had a diagnosis and then those who did. This was the important discovery work that helped us optimize towards the present-day Apifiny PRO and Active Surveillance.

The poster and presentation of this work at the AUA received the Best Biomarker award for the session.

STEPHEN STRUDWICK: Wow, okay. So Apifiny PRO can be used in patients who have not yet been diagnosed with prostate cancer, is that what you’re saying? It can be used in that group as well?

DAVID ESPOSITO: Yes. So Apifiny, today’s Apifiny with 8 biomarkers, is optimally placed in primary care as a second line diagnostic tool after the initial assessment of risk, and that initial assessment of risk is typically done with PSA. But then, Apifiny PRO, in the hands of a urologist, is positioned to help assess the risk of aggressive disease in a man who is considering an initial or follow-on biopsy. So, these patients indeed do not have a diagnosis at this point.

Apifiny Active Surveillance would be used for the man who had a positive biopsy for cancer, which has been deemed nonaggressive or indolent most likely by a pathology reading of Gleason 6 or below, or may have completed a genetic test like Myriad Genetics’ Prolaris test, or Genomic Health’s OncotypeDx test, and the risk assessment of the patient’s prostate cancer would be nonaggressive, so they’re not receiving treatment. They still have prostate cancer and the current standard of care, which varies across several guidelines, is typically a PSA test every three months and a biopsy every 12 or 24 months.

And so, we think Apifiny Active Surveillance would assess a man’s risk for aggressive disease who was once deemed indolent, and could help either accelerate the need for a biopsy or postpone that subsequent biopsy.

STEPHEN STRUDWICK: Okay, cool. So, what are your continuing challenges when it comes to adoption of these tests? I mean, now obviously you’re covering the diagnostic landscape and the progressive landscape when it comes to prostate cancer. Are you still finding the similar types of challenges to what you had before with people with adoption of these types of tests?

DAVID ESPOSITO: Yes, I mean, logistics is a key issue, physicians and their staffs must draw blood, and ship the blood to us just like a standard lab-developed test. So, if they’re not familiar with a process beyond their local lab, it can create barriers to ordering our tests.

We are working with more lab partners who typically carry our products on their requisition form, so it makes it easier for a doctor to order it and ship it to us, it’s efficient. But that barrier plus there’s a lot of competition out there; there are eight different choices that clinicians have around the initial and follow-on biopsy patient. And we’re arguably not as well-funded for sure as some of our competitors, so there’s that traditional sales and marketing challenge.

STEPHEN STRUDWICK: So, you do have some more established competitors within this market when it comes to surveillance of the specific markers?

DAVID ESPOSITO: Yes we do. There is no one with our specific technology of our biomarkers, but for each of our three products, there is plenty of competition in the market. Companies like Beckman Coulter, OPKO Health, and MDxHealth. There are some well-funded competitors in the market.

STEPHEN STRUDWICK: Oh, wow. So how do you plan to differentiate yourself from these bigger players?

DAVID ESPOSITO: Sure. So, with our portfolio, we describe Apifiny as the only cancer-specific, non-PSA blood test available in the world to assess the risk of prostate cancer. We are unique with that position. There is no other blood test that doesn’t rely on PSA; every other blood test relies on PSA, which we think has some shortcomings because PSA is not cancer-specific.

And then, the other competitors are urine-based tests, which create their own level of complexity. Most of them have PSA in their algorithms to generate a risk score. In addition, urologists must vigorously massage a man’s prostate prior to capturing the patient’s urine to ensure adequate capture of the genetic information. This process presents a logistical challenge to the test. It certainly will be difficult for them to penetrate primary care with that hindrance to their testing methods, and the cost of many of these gene expression assays are much more than our autoantibody technology. In addition to urine and blood competitors, there are tissue-based tests which obviously require a biopsy.

So, we believe we have a very well-differentiated position against those competitors. Even though we are outnumbered by manpower and funding, we still see the ability to successfully differentiate ourselves in the market.

STEPHEN STRUDWICK: So, what type of feedback are you getting from KOLs, people in the community about these tests? Are they very positive about it?

DAVID ESPOSITO: Yes, they’re really excited about the new technology. I mean, they understand the biology around leveraging the immune system’s response to cancer. They are a little bit tired with the various forms of PSA testing that’s out there, so they’ve been very excited about our technology. Most of them, given our early start, would like to see more data and see some more studies, so we’re certainly working on developing that. So yes, the feedback has been positive and clinicians are looking forward to additional data on our technology.

STEPHEN STRUDWICK: Oh, absolutely. And that brings me to the question, are you presenting any further data at any upcoming meetings?

DAVID ESPOSITO: We have study protocols in place with the Veterans Hospital in Durham, North Carolina and the Mayo Clinic. We also have a few other clinic-based large urology group studies in the making, so yes, we do have a few different studies in place to gather some additional data.

STEPHEN STRUDWICK: So, you’re going to have some more community-based data coming out in the future.

DAVID ESPOSITO: Yes, both community-based clinics and also academic centers.

STEPHEN STRUDWICK: So, the community-based clinics will probably be focusing more on Apifiny, and the academics will be more on the PRO and the Active Surveillance, or is it a combination?

DAVID ESPOSITO: When I described community, I mean community-based urology groups and they would want to see PRO and Active Surveillance also in addition to the academic urology clinicians. Apifiny will become more focused on meeting the needs of primary care clinicians and we’re looking for large integrated networks to potentially do a study with us around Apifiny in primary care.

STEPHEN STRUDWICK: Oh, nice. You mentioned other diagnostics you have in the pipeline. How has the financing been for that, for, say, the breast and the lung cancer? You kind of mentioned it a little earlier.

DAVID ESPOSITO: Yes. So, we have a full library of 2000 plus markers in breast cancer. We just haven’t yet begun to work through that library to identify what would be the prioritized set of markers. We’ve just begun to do that work. We’ve published on 22 markers in lung cancer, and so, we are preparing a lung diagnostic panel that we hope to launch at the beginning of next year.

STEPHEN STRUDWICK: You’ve published already? Where have you published?

DAVID ESPOSITO: Yes, our lung data was published in Cancer Research in 2007, and we’ve just optimized the panel based on that initial research that was published.

STEPHEN STRUDWICK: Okay. Excellent, thanks. Well, thanks so much, David. I mean, this has been a great update on your company. Is there anything else that you could tell us about what’s going on at Armune? Are you planning on going to any upcoming meetings?

DAVID ESPOSITO: We just returned from the American Association for Clinical Chemistry (AACC) meeting, which was held in the first week of August, and then there are a couple of large upcoming internal medicine meetings in the Fall. We are being selective about future meetings we attend so we can manage our finances. The AUA was a big meeting for us in Boston this past May, and so we’re just kind of adjusting from that.

STEPHEN STRUDWICK: Yes, absolutely. Thanks so much, David!