Optiscan Improving Cancer Outcomes with Digital Pathology&...

Optiscan Improving Cancer Outcomes with Digital Pathology& Precision Surgery

A brief dissertation.

Introduction

It is timely for a review of Optiscan and provide some orientation and perspective on the Company at present. This will be particularly useful for potential new shareholders. It is correct that the current share price is ridiculously low at sub 10 cents. This is an aberration and represents a unique buying opportunity. It is also an ideal time to buy, to take advantage of the 50% capital gains tax discount on sale if you hold the share for a minimum of 12 months - applicable to Australian tax residents. The share price will achieve $1 and a lot more, subject to the possibility of a company buy-out before then. The top twenty shareholders now own approximately 70% of the shares and they are not trading those shares. Recently some significant shareholders have increased their holdings. Most current trading is by day traders. Many Optiscan staff also own shares.

In summary, the share price will go through at least 8 price phases:

(1) The announcement of the submission of the FDA approval application for InVivage

(2) Increased income stream from Carl Zeiss Meditech and other sales, rentals and revenue

(3) The announcement of FDA approval

(4) The subsequent sales of InVivage

(5) The production of a prototype device for use in breast cancer surgery

(6) An upgraded GI device - Second Generation Flexible Scope for colonoscopy, gastroscopy, and endoscopy

(7) CE and TGA approvals for InVivage

(8) Further expansion of the product range including surgical and pathology

As you are aware the submission of the FDA approval application is imminent. And FDA approval will most likely occur in 2024. Recently the company received a $672,320 research and development tax rebate from the ATO for the 2022/23 financial year. In addition, to a recent $3 million Cooperative Research Centres Projects grant infusion [to be paid over 4 years] to allow Optiscan to continue work on its Edge-AI-enabled gastrointestinal endomicroscope which is a $9.2 million project collaboration with Australian industry and science partners the CSIRO, Hydrix and Design & Industry.

There is no doubt that the technology is sound and it works, evidenced by a successful capital raise in July 2023 of $16.7 million.

What is Cancer?

Cancer is a disease of the body’s cells. Cancer occurs when the cells in the body grow uncontrollably. Cancer is caused by mutations [changes] to the cell’s DNA.

Optiscan Products

ViewnVivo provides 3D single-cell live imaging for pre-clinical and research purposes. ViewnVivo applications include: cancer research; cell tracking, monitoring of infection and treatment; pathology; microvascular studies; tissue regeneration including stem cell research; photodynamic therapy; pharmacology including monitoring effects of drug delivery and tissue response; tissue injury and disease modelling; molecular imaging. And is compatible with multiple dyes and contrast agents.

InVivage is an intra-oral [within the mouth] digital microscope that provides images [including 3D] at a sub-cellular level [within a cell] for use in humans. Cells are the basic building blocks of life that can live on their own and make up all the living organisms and tissues of the body. Tissue is a group of cells that have a similar structure and function together. On average, depending on a few variables, a human has 28 to 36 trillion cells. An InVivage image can distinguish at a cellular level three types of tissue: (1) normal; (2) precancerous; (3) cancerous. The device in real time can be used for prevention, detection, and treatment of cancer. Significantly, the images become a part of a patient’s medical photo history that can be instantly transported around the world and subjected to AI analysis. The technology is critical in live cancer surgery for the identification of the margin between cancerous and non-cancerous cells. A de-novo application for FDA approval is imminent [within a month ortwo]. FDA approval will occur and most probably be this year. InVivage will have a software user interface, AI, and telepathology compatibility. In addition to the current development of sterile disposable sheaths and drapes. Subsequent by-products will include a surgical device for intraoperative live in vivo imaging for immediate surgical decision making with an initial target market in open breast surgery.

Future Offshoots from InVivage

Soon after FDA approval, the InVivage family will grow to include standalone devices for:

(1) Surgical (includes breast cancer) to enable the surgeon to distinguish the margin zone between cancer and non-cancerous tissue. Work on this is currently progressing, including InVivage’s rigid scope being adapted for laparoscopic surgical methods.

(2) Cervical - C1-C7 vertebrae which are separated from one another by intervertebral discs

(3) Pathology on fresh or fixed tissue – e.g. for breast cancer, neurosurgery. And use of dyes for added differentiation. Development started in December 2023.

(4) Gastrointestinal endomicroscopy - Optiscan has the precedent FDA approved Pentax device ISC-1000 – leading the pathway for a Second-Generation Flexible Scope for colonoscopy, gastroscopy, and endoscopy. The Current Procedural Terminology (CPT) codes offer medical practitioners a uniform language for coding medical services and procedures to streamline reporting, increase accuracy and efficiency in North America. The device currently has existing CPT codes 43206 Esophagoscopy flexible, transoral; with optical endomicroscopy 43252 Esophagogastroduodenoscopy, flexible, transoral; with optical endomicroscope 88375 Optical endomicroscopic image(s), interpretation and report, real time or referred, each endoscopic session 0397T Endoscopic retrograde cholangiopancreatography (ercp), with optical endomicroscopy (list separately in addition to code for primary procedure).

(5) Veterinary – lower regulatory burden – from small animal veterinary clinic to specialised large animal facilities

Advantages of Optiscan’s technology

The advantages of Optiscan’s technology include:

(1) No physical biopsy required

(2) Is not destructive to the tissue

(3) Immediate

(4) Live tissue analysis

(5) Unlimited number of samples

(6) Digital images anytime anywhere - remote-access in vivo images

(7) Photo history

(8) AI technology

(9) Histopathology

Carl Zeiss Meditec Convivo collaboration with Optiscan

Optiscan Confocal Imaging Technology is presently the primary imaging component of the ZEISS CONVIVO, providing live microscopic imaging technology in the field of Neurosurgery. The confocal laser scanning microscopy is used in combination with the contrast agent fluorescein sodium to visualize cellular and architectural characteristics of tissue with high resolution. Optiscan’s half-year report for 31 December 2023 indicated that Zeiss Meditec orders to date were $720,000. Optiscan’s Quality Management System successfully passed an ISO 13485:2016 Annual Surveillance Audit, in addition to an external audit as part of its agreement with Carl Zeiss Meditec.

The Current Status of Human Cancer Prevention andTreatment

(1) Increasing cancer rates worldwide

(2) current cancer surgery is inaccurate

(3) reoccurring cancer

(4) biopsy samples do not cover the entire tissue area

(5) biopsy results take time

(6) human error in the interpretation of samples

(7) inefficient cancer treatment that is costly

(8) limited access to interpretations of biopsy samples

Patents

A patent protects any device, substance, method or process that's new, inventive and useful. A patent lasts up to 20 years (standard patent) and 25 years for a pharmaceutical patent. An invention to be patentable must be:

New — it must be novel

Useful — it can be made or used in an industry

Inventive — it's different enough to what already exists

A suitable subject matter, known as 'manner of manufacture'.

Below is a list of Optiscan’s patents, in order of newest to oldest:

Sterile sheath for confocal endomicroscopy scanner probe - patent number: 11559189

Optical scanner and scanned lens optical probe patent number: 10194788

Imaging method and apparatus patent number: 9510730

Scanner for an endoscope patent number: 9456734

Optical scanner and scanned lens optical probe publication number: 20160143517

Imaging method and apparatus publication number: 20150073270

Scanner for an endoscope publication number: 20130274597

Fibre bundle confocal endomicroscope patent number: 8057083

Compact confocal endoscope and endomicroscope method and apparatus patent number: 8047985

Optical element publication number: 20110178409

Imaging method and system publication number: 20110178395

Optical fiber scanning apparatus patent number: 7920312

Objective lens unit for endoscope patent number: 7695431

Tuning-fork-type scanning apparatus with a counterweight patent number: 7532375

Optical fiber scanning apparatus publication number: 20090015894

Optical connector patent number: 7401984

Fibre bundle confocal endomicroscope publication number: 20080137363

Condensing optical system, confocal optical system, and scanning confocal endoscope

Patent number: 7338439

Laser scanning confocal microscope with fibre bundle return patent number: 7330305

Fiber bundle for contact endomicroscopy publication number: 20080013900

Endoscope publication number: 20080004495

Method and apparatus for providing depth control or z-actuation patent number: 7294102

Tuning-fork-type scanning apparatus with a counterweight publication number: 20070242330

Endoscope patent number: 7267647

Light scanning device patent number: 7248390

Scanning method and apparatus patent number: 7123790

Electrically operated tuning fork patent number: 7010978

Scanning microscope with miniature head patent number: 6967772

Condensing optical system, confocal optical system, and scanning confocal endoscope publication number: 20050052753

Optical connector publication number: 20050025499

Method and apparatus for providing depth control or z-actuation publication number: 20040220453

Endoscope publication number: 20040158129

Z sharpening for fibre confocal microscopes patent number: 6567585

Optical fibre confocal imager with variable near-confocal control patent number: 5926592

Confocal microscope and endoscope patent number: 5659642

(I think this is all of them – let me know if I have missed any.)

Paula Fox Melanoma and Cancer Centre – Opens April 2024

Located at 545 St Kilda Road Melbourne Australia. The project issupported by government, the Fox Family, Minderoo Foundation [Andrew Forrest],and Monash University. The 5-storey cancer centre will have capacity to care for approximately 300 patients a day and will also have research laboratories. The centre will expand the capacity of existing Clinical Trial activity at Alfred Health and the laboratories will increase collaboration between research staff and clinicians from The Alfred and Monash University. I would expect that the centre would be most interested in acquiring Optiscan’s devices.

The Royal Melbourne Hospital

The Royal Melbourne Hospital, in Victoria, is one of Australia's leading public hospitals. It is a major teaching hospital for tertiary health care and engages in clinical research. The Royal Melbourne Hospital has 16 operating theatres and 3-day procedure rooms. Over 32,300 surgical operations a year are conducted. Clearly, we all understand the importance of in vivo [in the living body] digital biopsies for cancer detection and treatment. Significantly, there is another supernumerary use of InVivage in all surgical procedures not related to cancer. That is a proactive use of InVivage for cancer detection. The Royal Melbourne Hospital is another potential Optiscan customer.

Charlie Teo [Australian neurosurgeon] controversy is notthe real issue – Effective cancer removal is

Charlie Teo is not the real issue – Effective cancer removal is the issue – One which only digital technology can solve. Australian neurosurgeons are not performing digital biopsies during their operations. A surgeon cannot efficiently remove a malignant brain tumour without a live digital biopsy. Optiscan’s technology is the solution. A live digital biopsy allows the surgeon to identify the cancer margin zone.

No Night Shift Pathology services for Physical BiopsyAnalysis– Urgent Need for Digital Biopsies - Part of a healthy lung removed –Coroner Inquest informed

A South Australian coroner’s court in February 2023 was told that an Adelaide cardiothoracic surgeon removed part of a man’s lung based upon a biopsy sample that had been allegedly incorrectly analysed because the sample became cross-contaminated. A digital biopsy would have avoided this error. In fact, an Adelaide Pathology laboratory has closed its night shifts to prevent the occurrence of tired pathologists from misdiagnosing biopsy samples. In addition, the Inquest into the death of Dennis Jackson in Adelaide heard evidence that a pathologist was prone to making mistakes late at night. There are three issues: (1) Contamination of biopsy samples; (2) Pathologists misdiagnosing biopsy samples because they are tired; and (3) Negligent pathologists and poor laboratory work practises, including the cross contamination of samples. Details of the case follow: Date:10/02/2023 Court: Coroners Court 302 King William Street, Adelaide JudicialOfficer: Mr. I. L. White, Deputy State Coroner Case Title: Dennis CharlesJackson Hearing Type: Inquest

Optiscan is 100000% more significant than Cochlear

Cochlear is an Australian company which was formed in 1981. It designs and manufactures hearing implants and holds approximately 75 percent of the worldwide implant market. In 2011, Forbes named Cochlear as one of the world’s most innovated companies. Today Cochlear has a market capitalisation of $22.10 billion with a share price of $337.52.

Optiscan was formed around 1997. In October 1999 to March 2000 the share price peaked at $3.20 with a day closing high of $2.90. The share price is now 7.6 cents. Optiscan’s technological advances in the past 20 years are remarkable. Undeniably, Optiscan is now the global leader in the development of endomicroscopic imaging technologies. The technology enables real-time, in vivo imaging at the cellular level in human and animal tissue. With great respect to Cochlear, its company’s technology relates to the human ear (hearing) which is insignificant when compared to the impact of cancer on the human population. In no way degrading the significance of hearing disabilities. However, human cancers effect every person in the world. We all have friends or relatives who have cancer, if we do not have cancer ourself. In fact, if a human survives long enough, he or she will be affected by cancer. Optiscan’s technology’s impact on mankind is thousands of multiples more significant than Cochlear.

List of cancers relevant to Optiscan’s technology

Relevant to in vivo (in the living body) and ex-vivo (outside the living body).

First the most common cancers are:

Bladder Cancer

Breast Cancer

Colon and Rectal Cancer

Endometrial Cancer

Kidney Cancer

Leukaemia

Liver Cancer

Lung Cancer

Melanoma

Non-Hodgkin Lymphoma

Pancreatic Cancer

Prostate Cancer

Thyroid Cancer

Other Cancers

Acute Lymphoblastic Leukaemia (ALL)

Acute Myeloid Leukaemia (AML)

Adrenocortical Carcinoma

AIDS-Related Cancers

Kaposi Sarcoma (Soft Tissue Sarcoma)

AIDS-Related Lymphoma (Lymphoma)

Primary CNS Lymphoma (Lymphoma)

Anal Cancer

Astrocytomas, Childhood (Brain Cancer)

Atypical Teratoid/Rhabdoid Tumour, Childhood, Central Nervous System (Brain Cancer)

Basal Cell Carcinoma of the Skin (Skin Cancer)

Bile Duct Cancer

Bladder Cancer

Bone Cancer (includes Ewing Sarcoma and Osteosarcoma and Malignant Fibrous Histiocytoma)

Brain Tumours

Breast Cancer

Bronchial Tumours (Lung Cancer)

Burkitt Lymphoma – (Non-Hodgkin Lymphoma)

Carcinoid Tumour (Gastrointestinal)

Carcinoma of Unknown Primary

Cardiac (Heart) Tumours, Childhood

Central Nervous System

Atypical Teratoid/Rhabdoid Tumour, Childhood (Brain Cancer)

Medulloblastoma and Other CNS Embryonal Tumours, Childhood (Brain Cancer)

Germ Cell Tumour, Childhood (Brain Cancer)

Primary CNS Lymphoma

Cervical Cancer

Cholangiocarcinoma – (Bile Duct Cancer)

Chordoma, Childhood (Bone Cancer)

Chronic Lymphocytic Leukaemia (CLL)

Chronic Myelogenous Leukaemia (CML)

Chronic Myeloproliferative Neoplasms

Colorectal Cancer

Craniopharyngioma, Childhood (Brain Cancer)

Cutaneous T-Cell Lymphoma - Lymphoma (Mycosis Fungoides and Sezary Syndrome)

Ductal Carcinoma in Situ (DCIS) – (Breast Cancer)

Embryonal Tumours, Medulloblastoma and Other Central Nervous System, Childhood (Brain Cancer)

Endometrial Cancer (Uterine Cancer)

Ependymoma, Childhood (Brain Cancer)

Oesophageal Cancer

Esthesioneuroblastoma (Head and Neck Cancer)

Ewing Sarcoma (Bone Cancer)

Extracranial Germ Cell Tumour, Childhood

Extragonadal Germ Cell Tumour

Eye Cancer

Intraocular Melanoma

Retinoblastoma

Fallopian Tube Cancer

Gallbladder Cancer

Gastric (Stomach) Cancer

Gastrointestinal Carcinoid Tumour

Gastrointestinal Stromal Tumours (GIST) (Soft Tissue Sarcoma)

Germ Cell Tumours

Childhood Central Nervous System Germ Cell Tumours (Brain Cancer)

Childhood Extracranial Germ Cell Tumours

Extragonadal Germ Cell Tumours

Ovarian Germ Cell Tumours

Testicular Cancer

Gestational Trophoblastic Disease

Hairy Cell Leukaemia

Head and Neck Cancer (we have seen a recent study of this!)

Heart Tumours, Childhood

Hepatocellular (Liver) Cancer

Histiocytosis, Langerhans Cell

Hodgkin Lymphoma

Hypopharyngeal Cancer (Head and Neck Cancer)

Intraocular Melanoma

Islet Cell Tumours, Pancreatic Neuroendocrine Tumours

Kaposi Sarcoma (Soft Tissue Sarcoma)

Kidney (Renal Cell) Cancer

Langerhans Cell Histiocytosis

Laryngeal Cancer (Head and Neck Cancer)

Leukaemia

Lip and Oral Cavity Cancer (Head and Neck Cancer)

Liver Cancer

Lung Cancer (Non-Small Cell, Small Cell, Pleuropulmonary Blastoma, and Tracheobronchial Tumour)

Lymphoma

Male Breast Cancer

Melanoma

Melanoma, Intraocular (Eye)

Merkel Cell Carcinoma (Skin Cancer)

Mesothelioma, Malignant

Metastatic Cancer

Metastatic Squamous Neck Cancer with Occult Primary (Head and Neck Cancer)

Midline Tract Carcinoma with NUT Gene Changes

Mouth Cancer (Head and Neck Cancer)

Multiple Endocrine Neoplasia Syndromes

Multiple Myeloma/Plasma Cell Neoplasms

Mycosis Fungoides (Lymphoma)

Myelodysplastic Syndromes, Myelodysplastic/Myeloproliferative Neoplasms

Myelogenous Leukaemia, Chronic (CML)

Myeloid Leukaemia, Acute (AML)

Myeloproliferative Neoplasms, Chronic

Nasal Cavity and Paranasal Sinus Cancer (Head and Neck Cancer)

Nasopharyngeal Cancer (Head and Neck Cancer)

Neuroblastoma

Non-Hodgkin Lymphoma

Non-Small Cell Lung Cancer

Oral Cancer, Lip and Oral Cavity Cancer and Oropharyngeal Cancer (Head and Neck Cancer)

Osteosarcoma and Undifferentiated Pleomorphic Sarcoma of Bone Treatment

Ovarian Cancer

Pancreatic Cancer

Pancreatic Neuroendocrine Tumours (Islet Cell Tumours)

Papillomatosis (Childhood Laryngeal)

Paraganglioma

Paranasal Sinus and Nasal Cavity Cancer (Head and Neck Cancer)

Parathyroid Cancer

Penile Cancer

Pharyngeal Cancer (Head and Neck Cancer)

Pheochromocytoma

Pituitary Tumour

Plasma Cell Neoplasm/Multiple Myeloma

Pleuropulmonary Blastoma (Lung Cancer)

Pregnancy and Breast Cancer

Primary Central Nervous System (CNS) Lymphoma

Primary Peritoneal Cancer

Prostate Cancer

Rare Cancers of Childhood

Rectal Cancer

Recurrent Cancer

Renal Cell (Kidney) Cancer

Retinoblastoma

Rhabdomyosarcoma, Childhood (Soft Tissue Sarcoma)

Salivary Gland Cancer (Head and Neck Cancer)

Sarcoma

Childhood Rhabdomyosarcoma (Soft Tissue Sarcoma)

Childhood Vascular Tumours (Soft Tissue Sarcoma)

Ewing Sarcoma (Bone Cancer)

Kaposi Sarcoma (Soft Tissue Sarcoma)

Osteosarcoma (Bone Cancer)

Soft Tissue Sarcoma

Uterine Sarcoma

Sézary Syndrome (Lymphoma)

Skin Cancer

Small Cell Lung Cancer

Small Intestine Cancer

Soft Tissue Sarcoma

Squamous Cell Carcinoma of the Skin - Skin Cancer

Squamous Neck Cancer with Occult Primary, Metastatic (Head and Neck Cancer)

Stomach (Gastric) Cancer

T-Cell Lymphoma, Cutaneous - Lymphoma (Mycosis Fungoides and Sezary Syndrome)

Testicular Cancer

Throat Cancer (Head and Neck Cancer)

Nasopharyngeal Cancer

Oropharyngeal Cancer

Hypopharyngeal Cancer

Thymoma and Thymic Carcinoma

Thyroid Cancer

Tracheobronchial Tumours (Lung Cancer)

Transitional Cell Cancer of the Renal Pelvis and Ureter (Kidney (Renal Cell) Cancer)

Unknown Primary, Carcinoma of

Ureter and Renal Pelvis, Transitional Cell Cancer (Kidney (Renal Cell) Cancer

Urethral Cancer

Uterine Cancer, Endometrial

Uterine Sarcoma

Vaginal Cancer

Vascular Tumours (Soft Tissue Sarcoma)

Vulvar Cancer

Wilms Tumour and Other Childhood Kidney Tumours

Conclusion

Optiscan’s technology is a consequence of 25+ years of research and development.

Between $500 million to $1 Billion has been spent by Optiscan to achieve what we have today.

The company currently has an experienced and competent board, who are across the medical technology and the commercial issues which they are addressing head on

InVivage FDA approval will occur and coincides with the start of the significant evolution in artificial intelligence

Optiscan’s technology applies to all cancers

Carl Zeiss’ neurosurgery platform continues to expand and exists solely because of Optiscan’s technology. Carl Zeiss Meditech continues to collaborate with Optiscan

The market for Optiscan’s technology over the next five years is over $10+ Billion.

The value of the Optiscan’s intellectual property is enormous.

Clearly, Optiscan’s True Value Exceeds $1 Billion.