AngioDynamics’ Cell-Level Cancer Killer ‘Exciting,’ Doctors Say

Doctors testing an AngioDynamics Inc. device that uses pulses of electricity to kill cancer say early findings point to the potential for destroying tumors cell-by-cell while sparing healthy tissue.

The technology pierces the protective membrane of the cancer cell without harming nearby blood vessels and nerves, unlike most conventional surgery, according to regulatory filings. Results of the first Phase 1 study on humans will be presented March 11 in San Diego, the doctors said.

AngioDynamics, based in Queensbury, New York, has spent $40 million acquiring patents and preparing to market the device, called NanoKnife, Chief Financial Officer Joe Gersuk said in an interview. The company is banking on NanoKnife to catapult its annual profit, which reached a record $10.9 million last year on sales of catheters and other products.

“It’s the most exciting thing that I’ve seen come along and I’ve been doing this for 20 years,” said Stephen Kee, associate professor of radiology at the University of California, Los Angeles Medical Center. “We can treat patients with advanced disease without thinking we are going to make them worse.”

Kee and Ken Thomson, director of radiology at Melbourne, Australia’s Alfred Hospital, who have used the device in cancer treatment, say NanoKnife needs several more rounds of testing over a few years. Even if successful, the cost of the NanoKnife, which sells for $400,000 a unit and requires $2,000 needles for each procedure, may deter some hospitals, the two physicians said. Both said they weren’t compensated by AngioDynamics.

Procedure Comparisons

Leonard Lichtenfeld, deputy chief medical officer for the American Cancer Society, said more research is needed to assess the NanoKnife and compare it with other minimally invasive procedures such as cryoablation, which kills tumors by freezing them, and radiofrequency or laser ablation, which use heat.

“I would want to see head-to-head comparisons in a well- controlled science trial before drawing conclusions that one treatment is necessarily better than others,” Lichtenfeld said in an interview. Many treatments appear promising in the first stages of testing, and drawbacks emerge later, he said.

The NanoKnife uses needlelike electrodes to administer pulses in a technique known as irreversible electroporation. The procedure caused little pain to the 18 people whose lung, liver and kidney cancer was treated in the Phase 1 study in Australia, Thomson said.

1.4 Million Cancer Cases

Thomson and Kee, who performed some of the procedures in the study, said the device might be able to treat millions of patients. More than 1.4 million new cases of cancer occurred in 2008, according to the American Cancer Society.

NanoKnife has been cleared by the U.S. Food and Drug Administration for use in the surgical ablation, or removal, of soft tissue. AngioDynamics is seeking approval to market the device specifically as a cancer treatment. FDA approval would make it easier for insurance companies to pay for the procedure, doctors and analysts said. Kee estimated NanoKnife treatment could cost as much as $20,000 per patient.

AngioDynamics is lending the devices to about 20 U.S. hospitals, including UCLA and Memorial Sloan-Kettering Cancer Center in New York, to allow doctors to try the technology.

The facilities are paying AngioDynamics $2,000 per disposable needle, Gersuk said. The needles alone cost more than the $1,126 that the U.S. Medicaid program pays for radiofrequency ablation of a liver tumor, Lichtenfeld said.

Outpatient Treatment

NanoKnife procedures differ from other treatments because they can be done on an outpatient basis and are less intrusive than surgery, according to Thomson and other doctors.

“It’s remarkable,” Thomson said in an interview from Melbourne. By mid-year, he plans to begin a Phase 2 study, sponsored by his hospital, that will treat as many as 150 people, Thomson said.

The NanoKnife technique was invented by a team led by Boris Rubinsky, a professor of bioengineering at the University of California, Berkeley, and licensed by the University of California to Oncobionic for commercial development. AngioDynamics acquired Oncobionic in April.

Chris Warren, an analyst at New York-based Caris & Co., said he thinks it will be years before the device reaps rewards for the company.

‘Interesting’

“It’s going to require a great deal of sales and marketing,” Warren said. “I don’t include much in my model in the next two years, but note that, ‘Hey, this is interesting.’” He rates the stock “above average.”

Brooks West, an analyst at Minneapolis-based Craig-Hallum Capital Group Ltd., said the time is “closer than people think” for the device to be used as a cancer treatment.

“It could be one of the next big things in medicine,” said West, one of five analysts with a “buy” rating on AngioDynamics. Three others say to hold the stock and one recommends selling.

AngioDynamics lost 31 cents, or 2.4 percent, to $12.63 yesterday in Nasdaq Stock Market composite trading. The shares have fallen 7.7 percent this year.