IQ-AI Issues Letter to Shareholders

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, 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 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, 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, 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, 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: [phone]

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.

 

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