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Saturday, Mar 2, 2024

Tumor Test in a Breath

Pulmostics Inc. would like to dominate the U.S. market for cancer detection, but first it will try its products in Mexico. The Newbury Park medical device company has partnered with Mexican company Labinnova S.A. in a deal that would install about 35 of Pulmostics’ breath analysis devices over the next year. The machines capture breath, and through analysis outputs a person’s risk towards certain diseases. The devices to be distributed in Mexico will indicate a person’s risk for breast cancer. Chief Executive William Wittmeyer said distributing products in Mexico will allow the company to expand much faster than the company would be able to in the U.S., where breast cancer diagnostics are well established. “Do I disrupt the $3.7 billion mammogram center business here?” he asked. “Or do I go to a market that doesn’t have an existing infrastructure?” The two-year-old startup is a spinoff of Electronic Sensor Technologies in Thousand Oaks, which manufactures gas chromatography instruments, machines that can separate and analyze various compounds. “It’s like a high-end tuning fork,” said Wittmeyer. For Pulmostics, Wittmeyer partnered with Menssana Research Inc. in New Jersey, which has been developing breath analysis devices for the last 30 years. “It turns out in some diseases like breast and lung cancer, there are patterns of compounds that are highly correlated,” said Wittmeyer. “We don’t diagnose, but we can indicate that your breath is suspicious.” According to Wittmeyer, while the strength of the device is its minimal invasiveness, it won’t be able to pinpoint or locate exact tumor locations like a mammogram machine can. However, the benefit comes from the device providing actionable information through a simple and convenient method. Foreign venture The Mexican venture came about as a collaboration between the three companies. Menssana will develop the algorithms to analyze the breath, Labinnova will handle distribution and Pulmostics will manufacture the instruments. Pulmostics will receive revenue through the cartridge business model, meaning it will be the supplier of breath-capturing cartridges that need to be replaced after each test. Once the user breathes into the machine, the device will take about a minute to provide results, according to Wittmeyer. Pricing for each test will be established by the distribution partners. Pulmostics will first target countries where there is a relatively small number of mammogram centers compared to the population. For example, in India, despite a population of more than 500 million women, there are only about 250 mammogram centers, said Wittmeyer. Pulmostics’ devices can be used prior to a visit at a mammogram center, serving as an additional screening process. Furthermore, without a well-established mammogram market to disrupt, expansion and integration will be easier for a startup like Pulmostics. “We have a great opportunity to go in and say, ‘Here’s how we can use imaging centers efficiently,’” he said. While most breath analysis device companies target hospitals and laboratories, Pulmostics will jump right into the commercial space, foregoing the arduous and pricey process of obtaining approval from the U.S. Food and Drug Administration for now. The Mexican venture, for example, plans to sell the devices in pharmacies rather than doctors’ offices. “We can’t be held hostage by the FDA,” Wittmeyer said. U.S. market However, even if the company experiences a significant success in Mexico, it will be an uphill battle for the company to find similar success in the U.S. In part, that’s because when it comes to medical devices, the FDA doesn’t look at success in one country as a notable factor. Yarmela Pavlovic, regulatory attorney and partner at Hogan Lovells in San Francisco, said the FDA approval varies from device to device. But the agency looks at three main characteristics: novelty, intended use and technology. “If you are making a new product that is the same as hundreds of others that have come before, the pathway for an approval is well established,” he said. “But if your product is very new and novel, it will take longer for the FDA, because they also have to be educated in the technology.” Pulmostics will be counting on competitors when it comes to that. “Good news is about 15 different companies are all focusing on breath analysis,” said Wittmeyer. “It’s impossible for a small company to educate the world, but if we can get others to do so, it will force us to run faster.” If the company does see significant success and can arrange enough capital, re-entering the U.S. market may be a viable strategy. Foreign medical products experiencing success in the U.S. isn’t completely unheard of. For example, import companies such as MarcasUSA in El Segundo have imported over-the-counter medical brands from Mexico to the U.S. for years. Richard Philips, chief marketing officer at MarcasUSA, said well-established companies in Mexico are always looking for ways to grow. “The significant Hispanic market in the U.S. can be an important part of a growth strategy for retailers in the country,” said Philips. “We usually look at number one and two brands (in Mexico) because they have a significant market share.” Philips added while it’s possible for companies to enter the U.S. market, just succeeding in Mexico can be significant. “What really hasn’t been in the news is that the Mexican middle class has really been growing,” said Philips. “That can create great opportunity for businesses in Mexico because there now is a significant disposable income that wasn’t there before.”

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