RCS - IQ-AI Limited - IQ-AI Issues Letter to Shareholders

IQ-AIAnnouncement

15/10/2024 07:00

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RNS Number : 1188I  IQ-AI Limited  15 October 2024

IQ-AI LIMITED ISSUES LETTER TO SHAREHOLDERS

 

IQ-AI Limited ("IQAI") (LSE: IQAI) a developer and manufacturer of medical
image processing platforms and therapies for cancer, has today released a
letter to shareholders on behalf of Michael Schmainda, CEO of IQ-AI's wholly
owned subsidiary Imaging Biometrics (the "Company").

The full text of Mr Schmainda's letter follows:

"Dear Shareholders,

Thus far, 2024 has been marked with new levels of revenue, milestones in
product development, and business advancement. Operationally, we maintain a
lean and efficient team while balancing a diverse array of products and
projects, each of which we believe possess significant business potential.

Instead of providing a traditional update in letter format, we have decided to
address some of the specific questions we have received, and anticipate
receiving, regarding these key initiatives in a Q&A format. No doubt we
will not address everyone's specific question here, but please be assured we
are committed to providing updates on all material matters as soon as they are
made available.

Q:  Where are we with the phase 1 clinical trial?

A:  The end of our sponsored phase 1 trial is imminent. Two more patients are
needed to complete the expansion phase at the final dose level. Once enrolled,
they need to remain in treatment for four weeks for the data to be included in
the summary analysis. Enrolling these last few patients has taken longer than
anticipated and, while many patients have been screened, they have not met the
eligibility requirements. Our experience has shown; however, this can change
in an instant and we could receive an influx of eligible patients at any time.

Internally, our focus has shifted towards phase 2 planning and preparation.
This includes scheduling an "End of Phase 1" meeting with the FDA. These
meetings, formally referred to as "Type B" meetings, require documentation to
be prepared and submitted to the FDA well in advance of the meeting. Since
scheduling these meetings can take several months, we are working on the
documentation now with the aim of securing a meeting later this quarter.

Once the phase 1 trial is fully enrolled, the Medical College of Wisconsin
(MCW) is planning to become an active site for our Expanded Access Program
(EAP). This will allow patients who cannot participate in the Phase 1 trial to
access GaM through the EAP.

Q:  The Expanded Access Program (EAP) opened several months ago. How has it
been progressing?

The ramp up of the EAP has taken longer than we anticipated. This is due to
the individual sites' local Internal Review Board (IRB) approval processes.
Obtaining approvals and navigating various administrative policies was
frustrating for both us and the patients who want to participate. At the time
of this writing, we have three activated sites (NY, NC, and CA) and two
patients receiving oral GaM. Several sites are at various stages of the
activation process and are moving closer to activation.

Q:  What is IQAI's plans for a phase 2 trial?

As part of the phase 1 sponsorship agreement, IQAI owns the rights to the
phase 1 results and data, including the right to pursue FDA approval and
commercialization. As such, we are keenly interested in maintaining our
involvement in the development of IB-003 via a phase 2 trial. The agent has
met phase 1 objectives. It has demonstrated an excellent safety profile,
proven to be well tolerated in humans with no dose limiting toxicities, and
has demonstrated preliminary signals of efficacy. These results are
encouraging.

Phase 2 trials are designed with an appropriate number of subjects to
statistically prove efficacy. The planned phase 2 trial will be multi-site
with a target enrollment of 60 subjects. More details need to be finalized
including the amount of funding required, but various sources of funding are
being explored now including grants, foundational support, and revenue
generated from sales of products.

Q:  What are the benefits of obtaining Rare Pediatric Disease Designation
(RPDD) with the FDA when the Voucher Program has a termination date of Sept
30, 2026?

All the regulatory milestones achieved over the past 18 months were
strategically pursued using authorized FDA pathways. No funding was required
to apply for these designations, and each offers unique benefits and
incentives for pursuing commercialization. With respect to RPDD, two recent
pieces of legislation have been introduced that, if passed, will extend the
termination date for the voucher program. See below:

On 4th October 2024 U.S. President Biden signed a bill postponing the
termination date of the rare pediatric disease Priority Review Voucher (PRV)
program from September 30, 2024, to December 20, 2024. The bill, the
"Continuing Appropriations and Extensions Act, 2025" is a temporary measure to
continue the rare pediatric disease PRV program. There are currently other
ongoing legislative efforts to renew the program to 2028 and later. We have
summarized these proposals below.

U.S. President Joe Biden has signed into law H.R. 9747
(https://www.congress.gov/bill/118th-congress/house-bill/9747) , the
"Continuing Appropriations and Extensions Act, 2025," postponing the
expiration date of the rare pediatric disease PRV program. The date by which a
drug must be designated as a drug for a rare pediatric disease was changed
from September 30, 2024, to December 20, 2024. The date by which such
designated drug must be approved in order to receive a PRV remains September
30, 2026. This change is reflected on FDA's webpage
(https://www.fda.gov/industry/medical-products-rare-diseases-and-conditions/rare-pediatric-disease-designation-and-priority-review-voucher-programs)
 for the rare pediatric disease program, although the agency has noted that
it may not be able to meet all review timelines if there is a surge in
requests prior to the deadline. There are two primary legislative proposals
that may renew the program either to 2028 or to 2029.

 

H.R.3433
(https://www.congress.gov/bill/118th-congress/house-bill/3433/all-actions) ,
the "Give Kids a Chance Act of 2024," was passed by the House of
Representatives and is under consideration in the Senate's Committee on
Health, Education, Labor, and Pensions (HELP). It would reauthorize the rare
pediatric disease PRV program such that FDA may award PRVs through September
30, 2029, give FDA new authority to enforce requirements that drug sponsors
conduct pediatric studies, and incentivize drug makers to conduct pediatric
clinical trials when studying combinations of multiple cancer drugs. The bill
also adds a requirement for the Government Accountability Office (GAO) to
conduct a report on the impact of PRVs, including examining whether the
vouchers are successful in promoting development of new rare disease drugs and
in expediting patient access.

 

The "Give Kids a Chance Act" also includes provisions from the "Retaining
Access and Restoring Exclusivity" (RARE) Act
(https://www.congress.gov/bill/118th-congress/house-bill/7383) , as it would
specify that the seven-year market exclusivity period for drugs for rare
diseases or conditions (i.e., orphan drug exclusivity) prohibits the approval
of the same drug for the same approved use or indication with respect to the
disease or condition, codifying in statute FDA's long-standing interpretation
of the Orphan Drug Act that was called into question in a 2021 case, Catalyst
Pharms, Inc. v. Becerra.

 

Meanwhile, H.R. 7384
(https://www.congress.gov/bill/118th-congress/house-bill/7384/text) , the
"Creating Hope Reauthorization Act" would amend the date by which the drug
must be designated as a rare pediatric disease drug to September 30, 2028 and
the date by which the application must be approved to September 30, 2030. This
bill was introduced in the House and referred to the Energy and Commerce
Committee's Subcommittee on Health.

If the rare pediatric disease PRV program is not reauthorized, eligibility to
receive a voucher will be limited to products that receive rare pediatric
disease designation by December 20, 2024, and are approved by September 30,
2026.

 

Q:  Why did IQAI create a promotional video of IB Nimble?

Promotional videos are an efficient and recyclable way to showcase the
tremendous work and accomplishments of our development team. The video
includes some features that we believe will further position IB Nimble as a
needed and valuable mobile device for managing complex diseases securely and
timely. Dr. Bovi, who had the original vision for IB Nimble, praised the video
and is sharing it with his colleagues as an invitation for a deeper
conversation and an initial meeting with that site.

Q:  Is the Company pursuing regulatory clearance for IB Zero G?

We remain excited about the prospects of the patented technology within IB
Zero G and the disruptive shift it represents to current clinical paradigms.
We have continued the refinement of the artificial intelligence ("AI") model
as well as our collaborative relationship with a major children's hospital.

 

Currently, we are focusing on product development initiatives that will
deliver sales in the near term with our current portfolio of FDA cleared
products. Once those are completed, we will allocate resources and revisit an
FDA submission. This will likely result in a modified indication for smaller
populations such as children, pregnant women, patients with compromised renal
function, and other patients who would appreciate a "gad-free" alternative
when receiving repeated MR exams. This is challenging, however, because there
is no predicate device on the market to which substantial equivalence can be
demonstrated.

 

Q: It was recently reported that sites are interested in fractional tumor
burden ("FTB") maps, but few sites have adopted the technology. Why?

 

At the recent American Society of Functional Neuroradiology (ASFNR) meeting, a
survey question was polled, and the results were very encouraging to us. The
respondents to the question, "Has your site adopted FTB maps for DSC
analysis?", indicated 92% are interested and, of those, ~70% have not yet
adopted our FTB mapping approach - despite a growing body of scientific
backing and clinical validation that prove the many benefits.

 

We believe we are overcoming the last major hurdle to clinical adoption:
automation. We know hospitals are under tremendous cost and productivity
pressures. We also know burnout and turnover rates are real issues facing
radiology departments in general. Our fully automated FTB processing pipeline
eliminates the remaining manual, time-consuming step. It will be released with
the next version of IB Clinic as soon as the documentation is complete.

 

Q:  What is the current status of the Company's resubmission of the CPT code
application?

 

Last year, we applied for the assignment of a specific CPT code for our core
processing application using IB Neuro. As we reported, the feedback from the
editorial panel offered valuable insights and recommendations for a
resubmission. We also communicated that many sites are using an existing CPT
code now to obtain medical reimbursement for this specific procedure. This is
not universally accepted, however, as it appears some sites do not pursue this
approach. Regardless, we continue to share this information with all our
clients and are discussing a resubmission strategy.

 

Q:  What can we expect in 2025?

 

Early in 2025 we will obtain summary results of the phase 1 trial. Those
results, and the Real-World Data ("RWD") that will be accumulated via the EAP,
will give great insights into our commercialization pathways. As we
communicated, RWD is significant because it represents the general population
and, therefore, may be more informative than tightly controlled clinical trial
data.

 

We thank you for your continued support and look forward to sharing more
updates.

 

Sincerely yours,

Michael Schmainda,

CEO Imaging Biometrics, LLC

Director IQ-AI Ltd"

The Directors of the Company accept responsibility for the contents of this
announcement.

 

-ENDS-

 

For further information, please contact:

 

IQ-AI Limited

Trevor Brown/Brett Skelly/Vinod Kaushal

Tel: 020 7469 0930

 

 

About Imaging Biometrics, LLC

IQ-AI Limited, (LON: IQAI) (OTCQB: IQAIF), the parent company of
Wisconsin-based Imaging Biometrics, LLC (IB), is focused on delivering
quantitative imaging platforms and therapeutics that transform how clinicians
diagnose and treat patients more efficiently and effectively. For more
information about IB, visit the company's website at www.imagingbiometrics.com
(http://www.imagingbiometrics.com) .

 

 

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