Perimeter Medical, with FDA approval of their Optical Coherence Tomography Imaging System for breast cancer, begins commercialization
Medical science continues to advance and amaze. In this case surgeons can now better see the “perimeter” (edge) of an area where cancer has been removed, all in real-time, thanks to advanced tomography and soon to be enhanced with artificial intelligence (AI). The company behind this innovation has recently gained USA FDA approval and is now commercializing their technology with an initial focus on breast cancer.
The company is Perimeter Medical Imaging AI, Inc. (TSXV: PINK) (“Perimeter”).
Two million women in the world were diagnosed with breast cancer in 2019, 317,000 of those in the USA. Breast cancer is the 2nd most common cancer in American women. The average risk of a woman in the U.S. developing breast cancer sometime in her life is about 13%, or a 1 in 8 chance. About 43,600 women in the U.S. are expected to die in 2021 from breast cancer. Clearly, that is 43,600 too many, not to even mention the global cases.
Two million reasons why we need better medical devices to diagnose and treat breast cancer
Perimeter is an early stage medical device company based in Canada and USA with a focus on commercializing their Optical Coherence Tomography (OCT) Imaging System.
Perimeter recently announced that they have received USA FDA approval (FDA 510(k) Clearance) for their OCT Imaging System. The system is designed to examine tissue microstructures during surgical procedures by providing cross-sectional, real-time margin visualization. It achieves ultra-high-resolution, sub-surface image volumes of the margin (1-2 mm below the surface) of an excised tissue specimen. In addition, Perimeter is developing advanced artificial intelligence/machine learning image assessment tools intended to increase the efficiency of review. The project is called the ATLAS AI Project.
Currently, the revolutionary technology is targeting breast cancer, but the use case can be applicable to almost every cancer. ‘Real-time’ margin visualization assists surgeons and radiologists/pathologists with their decision making which can potentially help patient outcomes and reduces cancer costs. It is far better to get all the cancer at the margin than to have to return later with a bigger problem.
Perimeter CEO Jeremy Sobotta, stated: “This is an exciting and important milestone for Perimeter that enables us to bring our ‘commercial ready’ OCT Imaging System to the U.S. market……Our Perimeter OCT Imaging System is the foundational building block that allows us to continue developing ‘next-gen’ improvements, such as the artificial intelligence tools currently in development under our ATLAS AI project.”
- On March 30, 2021, Perimeter announced that Dr. Beth DuPree, a surgeon at Northern Arizona Healthcare Verde Valley Medical Center, initiated a clinical study, which will enroll up to 100 patients, that will evaluate the use of Perimeter S-Series OCT during breast conserving surgery, with the aim of demonstrating that surgeons can effectively use Perimeter S-Series OCT to aid their decisions if additional tissue needs to be excised.
- On April 14, Perimeter announced an important milestone in ATLAS AI project with standalone AI algorithm achieving key performance metrics.
- On April 15, 2021, Perimeter announced that the FDA granted a Breakthrough Device Designation for Perimeter OCT combined with ImgAssist AI – to be called Perimeter B-Series OCT. This designation allows for accelerated interactions with the FDA during product development and prioritized review of future regulatory submissions. In addition, a new Medicare policy program (Medicare Coverage of Innovative Technology, or MCIT) provides national Medicare coverage for up to four years for FDA-designated Breakthrough Devices upon market authorization, enabling more rapid utilization of new and innovative technologies for the Medicare population.
Perimeter’s commercialization strategy and potential revenues
Perimeter’s business model means they intend to make money from selling the Optical Coherence Tomography (OCT) Imaging System and then a recurring revenue from its use. The chart below is only illustrative, but it gives an idea of the potential revenues that can be made if commercialization ramps up successfully.
The shorter term amount shown below, which could potentially one day relate to Perimeter, is a potential revenue of $303 million pa. Longer term across all cancer segments globally there is a US$3.7 billion addressable market.
Analysts’ are forecasting Perimeter’s revenue to rise from C$1 million in 2021, to C$3 million in 2022, and to C$11 million in 2023. This shows the potential for revenue to scale rapidly, if successful.
Perimeter business model has the potential to reach 500 hospital early adopters thereby achieving a potential revenue of $303M pa (first table below is in US$,000)
Note: The above table figures are presented by Perimeter for illustrative purposes only and are not Perimeter projections.
Given that breast cancer is estimated to account for 30% of all female cancer diagnoses this year the need for advanced medical technologies such as Perimeter’s OCT Imaging System is enormous. Globally there are two million new cases of breast cancer diagnosed a year of which many typically would require surgery.
Perimeter’s initial addressable market potential is $303 million just in US, Canada and selected international markets, just based on breast cancer. If expanded to all cancers globally it rises to US$3.7 billion.
Perimeter Medical Imaging AI Inc. is still at the beginning of their journey but the need and potential growth ahead are enormous. Perimeter currently trades on a market cap of C$157 million.
Disclosure: The author is long Perimeter Medical Imaging AI Inc. (TSXV:PINK).