ANGLE moves towards Parsortix FDA approval

Cancer diagnostics developer ANGLE (LON: AGL) is getting nearer to FDA approval for its Parsortix liquid biopsy test. Angle would be the first company to receive FDA Class II clearance for a device harvesting intact circulating tumour cells CTC), making the technology highly valuable.

The specific approval would cover breast cancer. Clearance would allow Parsortix to be used in drug trials as well as the continued monitoring of patients who have been successfully treated.

Parsortix can capture circulating tumour cells, which can then be analysed.

FDA approval

It always seems to take longer than expected to gain FDA approval, but ANGLE has made steady progress. The data gathered and included in the filing covers the processing of more than 15,000 blood samples.

ANGLE has filed a De Novo submission with the FDA for Parsortix and clearance could be obtained by the end of the first quarter of 2021.

The estimate is based on the timings that the FDA publishes. Approval would mean that ANGLE could provide Parsortix biopsies for drug trials, as well as clinical use in breast cancer, which is a market worth $2.4bn a year.

Potential partners may also want to develop the Parsortix technology for other cancers.

Gaining a CE mark in Europe would enable sales in Europe. That would significantly increase the potential market, as will approvals for other types of cancer.

Further uses

There are ongoing trials using Parsortix for other cancers. The 35th peer reviewed paper was recently published. The Laboratory of Translational Oncology, School of Medicine, University of Crete evaluated a variety of CTC systems, including Parsortix, to assess response to immunotherapy drugs for treating lung cancer. Parsortix proved most effective in detecting disease progression.

There is an ongoing trail for the use of Parsortix in ovarian cancer, where patient enrolment recently restarted. This enrolment should be complete by the end of the year.

Cash

Revenues are modest because they are from sales for research use, but there is plenty of cash in the bank following the last year’s £18m fundraising.

Net cash was £18.8m at the end of 2019. finnCap reckons that there is enough cash to last until the middle of 2021.

If things go to plan, the FDA approval should be achieved by then and it will spark a jump in the share price. That would make the next fundraising less dilutive.

The share price rose 3p to 56p on the latest news, which is below the June 2019 placing price of 61.5p. That values ANGLE at £96.8m.

There are markets for individual cancers that could each be worth billions of pounds. Even approval for breast cancer provides a large potential market.

There is no guarantee that FDA approval will be achieved in the next six months, but ANGLE has made enough progress to make it safe to assume that it will eventually happen. The share price does assume some success but it does not discount the full benefits of FDA approval.