- MBI/Precision plan to market GeneFx® Lung test at an approximate cost of $3000/test
- There are 74,000 NSCLC (non-small-cell lung cancer stage I & II) patients in the US alone on an annual basis that have the need for this test
- 74,000 X $3000/test = $222,000,000/year
- MBI receives a royalty of approx. 8.5% = $17,760,000/year
- These are best-case numbers so if Precision fulfills 50% sell-through that is approx. $9,000,000/year in profit for MBI as proceeds from the royalty go straight to the bottom line
- MBI has virtually no burn rate
- MBI/Precision intend to partner with medical insurance agencies on reimbursement programs
- 5X earnings per share based on 50% fullfillment equates to over 50 cents/share valuation for MBI
- This rough valuation is based on US penetration only
- Global numbers will only add to the valuation



Precision Therapeutics and Med BioGene Partner to Commercialize GeneFx® Lung By Mid 2013

"This agreement to commercialize GeneFx® Lung underscores Precision's ongoing commitment to improve the outcomes of cancer patients by providing personalized medicine solutions that aim to increase quality of life and cancer survival rates," said Sean McDonald, Precision's President and Chief Executive Officer. "GeneFx® Lung will be a synergistic and important addition to ChemoFx®, our flagship test. GeneFx® Lung identifies early stage patients who have a poor prognosis and may benefit from chemotherapy and ChemoFx® quantifies an individual patient's probable tumor response to various chemotherapeutic and biologic agents."

"Given Precision's long-established leadership in the personalized medicine market generally, and lung cancer specifically, we believe that they are ideally positioned to advance GeneFx® Lung," said Erinn Broshko, Chief Executive Officer of MBI. "We have undertaken a thorough strategic review process and, in selecting Precision as our commercial partner, believe that this collaboration will provide increasing and significant value to MBI shareholders as Precision executes on its commercial strategy. Importantly, we are moving closer to providing NSCLC patients and doctors with an important tool to address a critical unmet need."



Global Lung Cancer Surgery Market (Devices & Treatment Outlook) – Trends & Challenges (2010 – 2015) http://www.marketsandmarkets.com/Market-Reports/lung-cancer-market-222.html

Lung cancer is the most common type of cancer across the globe. According to WHO, lung cancer is expected to be more prominent in the underdeveloped world due to an increase in the use of tobacco products; tobacco is the primary cause of around 80% of all lung cancers. Global incidence of lung cancer was 1,608,055 in 2008 with the developing countries accounting for a major share (55%); 1,694,277 new cases were recorded in 2010 with 1,934,467, 2,213,561, and 2,530,820 as the predicted new cases for the years 2015, 2020, and 2025 respectively.

The lung cancer surgery market is expected to grow at a CAGR of 4.9% during the study period (2010-2015). Thoracotomy is the most widely used surgical procedure for lung cancer treatment accounting for about 74% of all surgical interventions. The global market for lung cancer surgeries was valued at $36 billion in 2010 and is expected to grow to $45 billion by 2015. Rising incidence of non-small cell lung cancer globally is the major growth driver for the lung cancer surgery market. Europe accounted for the highest number (40%) of lung cancer surgeries performed in 2010.



Lung cancer is the leading cause of cancer death http://www.medbiogene.com/EN/lung_cancer/

Lung cancer is the leading cause of cancer death in the western world and accounts for more deaths than breast cancer, prostate cancer and colon cancer combined. Lung cancer is the number two most common cancer afflicting over 213,000 individuals per year in the United States alone. Approximately 85% of all lung cancers are of the non-small-cell variety (NSCLC). GeneFx® Lung is targeted towards early-stage NSCLC (stage I and II), a disease which afflicts over 74,000 persons annually in the United States alone (Jemal, Cancer Statistics, 2008).

Approximately $9.6 billion is spent annually in the United States on lung cancer diagnosis and treatment (NCI Cancer Trends Progress Report – 2007 Update). The value of life lost in the United States from all cancer deaths in the year 2000 was $960.6 billion; lung cancer alone represented more than 25% of this value (Yabroff, K.R., 2008).

Clinical staging alone is inadequate; better prognostic tools are urgently needed

Early-stage NSCLC patients are treated primarily by surgical removal of their tumours. Recent clinical trials have established that adjuvant chemotherapy, administered after tumour removal, significantly improves the survival of stage II patients, but does not significantly improve the survival of stage I patients.

As a result, the American Society of Clinical Oncology and National Comprehensive Cancer Network recommend adjuvant chemotherapy for stage II patients but not for stage I patients. However, 30% to 55% of stage I and II patients still die as a result of the disease, implying that patients diagnosed with the same stage of disease can have markedly different treatment responses and overall outcomes. Currently, tumor stage (determined by the size and location of the tumour and lymph node involvement) remains the strongest predictor of survival but fails to account for this difference in patient outcomes. A more accurate means of prognostication is needed to improve the selection of patients for adjuvant chemotherapy. GeneFx® Lung is expected to help address this critical unmet need.

Readers should note that these valuations are based on my findings through market research and are also based on potential market reach. No guarantee is placed on MBI fullfilling these projections.