Truly transformational changes are quite uncommon in medicine (such as the mass introduction of anesthesia, antibiotics or X-ray machines, to name a few). They happen once every ten years or so, at best. Most of the changes in this industry are evolutionary improvements. However, Toronto-based ChroMedX Corp (CSE:CHX) (OTC: MNLIF) (FSE:EIY2) is now poised on the verge of a real medical technology breakthrough.
The main product of this company is the HemoPalm handheld blood analyzer. This device is much more than just a tightly packed set of precise sensors. it’s a real technological gem, actually. The Canadian startup was founded in 2013 and went public a year later. Now ChroMedX is in final preparations for the HemoPalm launch to the market. If everything goes well (and this reporter doesn’t see a single reason, why wouldn’t it), ChroMedX will manage to seize a major niche in med tech, essentially cornering the market of mass-produced hand-held disposable cartridge based triple action (we’ll get to that part a little later) blood analyzers. It can’t get more progressive and lucrative at the same time than that. We’ll explain.
The technique is called Point of Care Testing or POCT and this concept is already making huge rounds, so to speak, in healthcare. The crux of it is that POCT procedures are performed outside the central medical laboratory, albeit in relatively close proximity to a facility where a patient is receiving care, be it a hospital room or emergency service vehicle.
Supposedly, the medical equipment for POCT is being developed by many major players in this market but there are some subtleties in the definitions. At the most basic level, this class of devices should be able to work as close as possible to the patient and be integrated into the medical examination process itself. Not “the nurse will check it and I’ll look it over in an hour”, and certainly not the “just send it to me when it’s ready and I’ll get the results back to you ASAP”. This is what makes POCT POCT.
The biggest challenge for doctors was and still is reducing the amount of time between symptoms, observation-examination, diagnosis, and treatment. And that’s where the point of care testing comes into sharp contrast with the traditional pattern and methodology of designated hospital laboratory with long delays and constant disruptions in workflow.
There are two major pitfalls on the way to mass-introduction of this technology around the globe. Firstly, the question of compactness. Many devices that supposedly work at a point of care are actually desk-size, too bulky to be at hand when needed (emergency response and disaster relief are among the cases where the POCT is much needed).
Secondly, the quality of testing. Virtually any medical test can be performed by a “hand-held” substitute but we’re talking about a significant approximation of the results. This approach may be enough in some cases, but in others, it will lead to an unacceptably low quality of the analysis, and we don’t need to be telling you what sort of diagnosis this kind of testing leads to…
The TechTarget quotes reviews by clinicians of a variety of devices for point of care tests. They all note the new opportunities that technology provides, but also report on its shortcomings. John Petersen, director of Victory Lakes Clinical Laboratories and professor of pathology at the University of Texas Medical Branch, inclined to believe that portable devices can not replace “large” laboratory equipment. As he examines the POCT glucose meters, he says: “I don’t think [they are] accurate enough to do [tight glucose control]. They get you in the ballpark, but if you need a really precise number, at this point they can’t do it”.
The uniqueness of the ChroMedX’s approach is that there are no compromises on neither point. The HemoPalm can perform full CO-oximetry, it can test for blood gasses and electrolytes, but is not much larger than the typical handheld credit card reader. It can be literally carried in the pocket of a lab coat.
As for the HemoPlam’s market potential, Ash Kaushal, president and CEO of ChroMedX reiterated to us that “…generating accurate results within minutes is paramount when diagnosing and treating a patient’s life in danger. This is reflected in the global market for Blood Gases & Electrolytes which was estimated to be 1.5 Billion $US in 2015 and is projected to reach over 1.8 Billion by 2020.”
Obviously, the market is already hot for the point of care testing hand-held devices. The Alere Inc. (NYSE: ALR), a global leader in rapid diagnostics, recently announced that the European Commission has granted clearance for Abbott Laboratories (NYSE: ABT) to acquire Alere Inc. but ChroMedX is in no way playing catch-up. “The major Point-of-Care handheld device in the market, says Mr. Kaushal, is the iStat that was acquired by Abbott in 2003 for close to $400MM US but it does not provide CO-oximetry or bilirubin measuring capability. Customers are required to purchase a second device for CO-oximetry analysis – something they will never have to do with the HemoPalm.”
Mr. Kaushal also stresses the distinctive design of the device which consists of the handheld part and a one-time use disposable cartridge is already perfected and patented by ChroMedX. Each test is performed inside the cartridge, so it’s quite similar to the classic “razor and blades” business model. This method presents two advantages. First, the company is developing cartridges with a different set of sensors for a wider range of tests. Secondly, this is potentially a very profitable enterprise, one of those cases where saving lives is a really good business.
Asked about the cost of the HemoPalm and cartridges, Mr. Kaushal said that the device will be much more attainable than those offered by ChroMedX’ competitors, and the price level of the cartridges would be “around $20 a piece”. It’s at the final stage of the hardware design and the company had recently announced the completion of the cartridge receptor component for the HemoPalm. Mr. Kaushal also announced the engagement of rapid prototyping firm, Agile Manufacturing, to complete the final assembly and packaging of the HemoPalm analyzer prototype.
Asked about the time of the HemoPalm’s arrival on the market, Mr. Kushal said: “We expect that by late 2017 we will be done with [the certification by US, Canada, and European medical authorities] and our device will be ready for the world”.