ENDRA Life Sciences Stock

ENDRA Life Sciences Inc. (ENDRA) develops technology for increasing the capabilities of clinical diagnostic ultrasound to broaden patient access to the safe diagnosis and treatment of a number of significant medical conditions in circumstances where expensive X-ray computed tomography (CT) and magnetic resonance imaging (MRI) technology is unavailable or impractical.

The company is leveraging experience with pre-clinical enhanced ultrasound devices to develop technology for increasing the capabilities of clinical diagnostic ultrasound in order to broaden patient access to the safe diagnosis and treatment of a number of significant medical conditions in circumstances where expensive X-ray computed tomography ('CT') and magnetic resonance imaging ('MRI') technology, or other diagnostic technologies, such as surgical biopsy, are unavailable or impractical.

In 2010, the company began marketing and selling its Nexus 128 system, which combined light-based thermoacoustics and ultrasound to address the imaging needs of researchers studying disease models in pre-clinical applications. Building on this expertise in thermoacoustics, the company has developed a next-generation technology platform-Thermo Acoustic Enhanced Ultrasound, or TAEUS-which is intended to enhance the capability of clinical ultrasound technology and support the diagnosis and treatment of a number of significant medical conditions that require the use of expensive CT or MRI imaging or where imaging is not practical using existing technology. The company ceased production, service support and parts for the company's Nexus 128 system in 2019 in order to focus its resources exclusively on the development of the company's TAEUS technology.

The company's TAEUS technology uses radio frequency ('RF') pulses to stimulate tissues, using a small fraction (less than 1%) of the amount of energy that would be transmitted into the body during an MRI scan. The use of RF energy allows the company's TAEUS technology to penetrate deep into tissue, enabling the imaging of human anatomy at depths equivalent to those of conventional ultrasound. The RF pulses are absorbed by tissue and converted into ultrasound signals, which are detected by an external ultrasound receiver and a digital acquisition system that is part of the TAEUS system. The detected ultrasound is processed into images and other forms of data using the company's proprietary algorithms and displayed to complement conventional gray-scale ultrasound images.

ENDRA uses suppliers of components, such as Blatek Industries, Inc. and Elite RF, LLC, and contract manufacturers, such as Starfish Product Engineering, Inc., to assemble and test ENDRA's TAEUS liver system for commercial sale. Suppliers are vetted before engaging in work with ENDRA and reviewed annually, as part of ENDRA's quality management system, to assure their performance meets ENDRA's needs. ENDRA has implemented internal processes to monitor designs, inventory and supply of key components needed to manufacture its TAEUS liver system. ENDRA plans its production in accordance with anticipated market demand and availability and lead times of needed materials.

The company's first TAEUS platform application focuses on quantifying fat in the liver and stage progression of nonalcoholic fatty liver disease ('NAFLD'), which untreated, can progress to Nonalcoholic Steatohepatitis ('NASH'), fibrosis, cirrhosis and liver cancer. In April 2016, the company entered into a Collaborative Research Agreement with General Electric Company, acting through its GE Healthcare business unit and the GE Global Research Center (collectively, 'GE Healthcare'), under which GE Healthcare has agreed to assist the company in its efforts to commercialize this application. In November 2017, the company contracted with the Centre for Imaging Technology Commercialization ('CIMTEC') to initiate human studies, through Canada-based Robarts Research Institute, with the company's TAEUS device targeting NAFLD. In October 2018, the company received an Investigational Testing Authorization ('ITA') from Health Canada to commence the first human studies in healthy volunteers with its TAEUS clinical system targeting NAFLD, guiding the company's algorithm development, and comparing its technology to MRI. The feasibility study was conducted in collaboration with Robarts Research Institute in London, Ontario, Canada. The company reported the completion and top-level findings of this study in September 2019. The data collected from the study, including additional usability inputs, was included in the company's TAEUS liver device technical file submission for device CE mark, which the company received for its NAFLD TAEUS application in March 2020. ENDRA has eight current or completed clinical research partnerships with research hospitals in North America, Europe and Asia for the conduct of clinical studies comparing the company's TAEUS clinical system to MRI-Proton Density Fat Fraction ('MRI-PDFF') in the measurement of liver fat. In June 2020, the company completed a 510(k) Premarket Notification submission to the FDA for the NAFLD TAEUS application. Following meetings with the FDA in connection with its review of the company's application, the company determined that the 510(k) pathway was not the optimal option due to the novel nature of the company's NAFLD TAEUS application and, in February 2022, announced that the company would pursue the de novo pathway for FDA reclassification and clearance of its NAFLD TAEUS application.

Each of the company's TAEUS platform applications will require regulatory approvals before the company is able to sell or license the application. Based on certain factors, such as the installed base of ultrasound systems, availability of other imaging technologies, such as CT and MRI, economic strength and applicable regulatory requirements, the company intends to seek initial approval of its applications for sale in the European Union, followed by the United States and China.

Solutions

The company's TAEUS technology uses a pulsed energy source-specifically, radio-frequency ('RF') -to generate ultrasonic waves in tissue. These waves are then detected with ultrasound equipment and used to create high-contrast images and other forms of data using the company's proprietary algorithms. Unlike conventional ultrasound, which creates images based on the scattering properties of tissue, thermoacoustic imaging provides tissue absorption maps of the pulsed energy, similar to those generated by CT scans. Ultrasound is only utilized to transmit the absorption signal to the imaging system outside of the body.

TAEUS Technology Platform for Clinical Applications

To increase the utility of the company's thermoacoustic technology, in 2013 the company began to develop its TAEUS technology platform. Unlike the near-infrared light pulses used in the company's earlier photoacoustic systems, the company's TAEUS technology uses RF pulses to stimulate tissues, using a small fraction of the energy transmitted into the body during an MRI scan. Using RF energy enables the company's TAEUS technology to penetrate deep into tissue, enabling the imaging of human anatomy at depths equivalent to those of conventional ultrasound. The RF pulses are absorbed by tissue and converted into ultrasound signals, which are detected by an external ultrasound receiver and a digital acquisition system that is part of the TAEUS system. The company's RF-based thermoacoustics imaging is not adversely affected by blood-filled organs, enabling the company's TAEUS technology to be used in clinical liver applications, among others. The detected ultrasound can then be processed into ultrasound overlays or quantitative data that may be translated into clinically useful metrics using the company's proprietary algorithms and displayed to complement conventional gray-scale ultrasound images.

After required regulatory approvals, the company's TAEUS technology can be added as an accessory to existing ultrasound systems, helping to improve clinical decision-making on the front lines of patient care, without requiring substantially new clinical workflows or large capital investments. The company is also developing TAEUS for incorporation into new ultrasound systems manufactured by companies, such as GE Healthcare.

The company's TAEUS technology has the potential to add a number of new capabilities to conventional ultrasound and thereby enhance the utility of both existing and new ultrasound systems and extend the use of ultrasound technology to circumstances that either require the use of expensive CT or MRI imaging systems, where imaging is not practical using existing technology, or where other assessment tools, such as surgical biopsy are required. To demonstrate the capabilities of the company's TAEUS platform, the company has conducted various internal ex-vivo laboratory experiments and limited internal in-vivo large animal studies. In the company's ex-vivo and in-vivo testing, the company has demonstrated that the TAEUS platform has the following capabilities and potential clinical applications:

Tissue Composition: The company's TAEUS technology enables ultrasound to distinguish fat from lean tissue. This capability would enable the use of TAEUS-enhanced ultrasound for the early identification, staging and monitoring of NAFLD, a precursor to NASH, liver fibrosis, cirrhosis and liver cancer.

Temperature Monitoring: The company's TAEUS technology enables traditional ultrasound to visualize changes in tissue temperature, in real time. This capability would enable the use of TAEUS-enhanced ultrasound to guide thermoablative therapy, which uses heat or cold to affect tissue, such as in the treatment of cardiac atrial fibrillation, or removal of cancerous liver and kidney lesions, with greater accuracy, and perform cosmetology procedures, such as lipolysis of abdominal fat.

Vascular Imaging: The company's TAEUS technology has the potential to enable visualization of blood vessels from any angle, using only a saline solution contrasting agent, unlike Doppler ultrasound, which requires precise viewing angles. This capability would enable the use of TAEUS-enhanced ultrasound to assist in identifying arterial plaques or malformed vessels.

Tissue Perfusion: The company's TAEUS technology has the potential to image blood flow at the capillary level in a region, organ or tissue. This capability could be used to assist physicians in characterizing abnormalities in tissue perfusion symptomatic of damaged tissue, such as internal bleeding from trauma, or diseased tissue, such as certain cancers.

Because of the large number of traditional ultrasound systems in global use, the company is first developing its TAEUS technology for sale as an aftermarket accessory that works with existing ultrasound systems. Because the company's TAEUS technology is designed to enhance the utility of, not replace, conventional ultrasound, healthcare providers will be able to increase the utilization of, and generate new revenue from, their existing ultrasound systems once the company obtains required regulatory approval for specific applications.

ENDRA's first clinical product is designed to interface with a conventional ultrasound scanner, utilizing the scanner's B-mode imaging to guide the selected region for assessment of liver fat content. The following sub-systems will comprise ENDRA's first generation product.

Radio Frequency (RF) Source and Computer:

The RF source consists of a low power waveform generator and an amplifier. Together, these components provide the characteristic pulses required to excite thermoacoustic signals in tissue. The computer provides processing capability to both utilize the conventional ultrasound data for navigation to the measurement site of interest, and the calculations required to convert digitized thermoacoustic signals to measurements of fat in liver tissue. The entire sub-system will reside in a single enclosure, on wheels, and sit adjacent to the ultrasound imaging system.

Specialized Transducer:

A single channel 'receive only' ultrasound transducer is specifically designed and optimized for thermoacoustic imaging. The transducer sub-system will detect thermoacoustic signals excited by the RF source within the liver. The transducer assembly includes electronics for signal amplification, digitization, and signal processing. The specialized transducer will work in concert with the conventional ultrasound probe used for liver imaging.

RF Applicator:

The RF applicator transmits pulses of energy, provided by the RF source, into tissue. The applicator is positioned in proximity to the target region for measurement.

Future TAEUS platforms are expected to provide two dimensional imaging with a transducer composed of multiple receive elements. The RF source and applicator would be similar to those in the first generation product but the multi-element transducer would allow for multiple applications, including: reading tissue composition, temperature, vascular flow, tissue perfusion, and other potential applications. Ultimately, the company expects its technology will be incorporated into conventional ultrasound systems and the company's business model will transition from producing stand-alone systems to licensing the company's technology, IP and specialized components to ultrasound OEMs. Existing ultrasound equipment already includes power supplies, computation, high speed electronics, and ultrasound transducers, which may be leveraged by the company's thermoacoustic imaging applications. The RF source and applicator are the principal hardware components that will be added to OEM ultrasound systems for the OEM fully integrated form of the company's product.

The company is following a model that mirrors the approach used by companies in the past to introduce new ultrasound imaging capabilities to existing conventional ultrasound scanners. Color Doppler, elastography, 3-D imaging, and high channel count systems were all introduced by new companies (not already involved in conventional ultrasound imaging). Historically, ultrasound imaging has grown through the introduction of unique technology and capabilities that expanded the applications and use of clinical ultrasound in a form that often added separate hardware to existing ultrasound systems. Ultimately, as these new technologies gained acceptance in the marketplace they were incorporated into OEM-designed and built systems that were sold by the leading ultrasound imaging vendors.

TAEUS System for the Early Assessment and Monitoring of Nonalcoholic Fatty Liver Disease, or NAFLD

The company's first TAEUS platform application focuses on quantifying fat in the liver and stage progression of NAFLD which, untreated, can progress to NASH, fibrosis, cirrhosis and liver cancer.

The company's TAEUS technology will enable primary care physicians, radiologists and hepatologists to diagnose NAFLD earlier and monitor patients with NAFLD-spectrum liver diseases more accurately and cost-effectively than is possible with existing technology.

In April 2016, the company entered into a Collaborative Research Agreement with General Electric Company, acting through its GE Healthcare business unit and the GE Global Research Center (collectively, 'GE Healthcare'). Under the terms of the agreement, GE Healthcare has agreed to assist the company in its efforts to commercialize its TAEUS technology for use in a fatty liver application by, among other things, providing equipment and technical advice, and facilitating introductions to GE Healthcare clinical ultrasound customers. In return for this assistance, the company has agreed to afford GE Healthcare certain rights of first offer with respect to manufacturing and licensing rights for the target application. More specifically, the company has agreed that, prior to commercially releasing the company's NAFLD TAEUS application, the company will offer to negotiate an exclusive ultrasound manufacturer relationship with GE Healthcare for a period of at least one year of commercial sales. The commercial sales would involve, within the company's sole discretion, either the company's commercially selling GE Healthcare ultrasound systems as the exclusive ultrasound system with the company's TAEUS fatty liver application embedded, or GE Healthcare being the exclusive ultrasound manufacturer to sell ultrasound systems with the company's TAEUS fatty liver application embedded. The agreement with GE Healthcare does not prevent the company from selling its TAEUS fatty liver application technology to distributors or directly to non-manufacturer purchasers. Additionally, the agreement provides that (1) prior to offering to license any of the company's TAEUS fatty liver application intellectual property to a third party, the company will first offer to negotiate to license the company's TAEUS fatty liver application intellectual property to GE Healthcare and (2) prior to selling any equity interests to a healthcare device manufacturer, the company must first offer to negotiate in good faith to sell such equity interests to GE Healthcare. The agreement is subject to termination by either party upon not less than 60 days' notice. On December 16, 2022, the company and GE Healthcare entered into an amendment to the company's agreement, extending its term to December 16, 2024.

In 2018, the company received authorization to commence the first human studies in healthy volunteers with its TAEUS clinical system targeting NAFLD, guiding the company's algorithm development, and comparing the company's technology to MRI. The feasibility study was conducted in collaboration with the Robarts Research Institute in London, Canada. The company reported the completion of this 50-subject study and top-level findings in September 2019. The data collected from the study, including additional usability inputs, was included in the company's TAEUS liver device technical file submission for device CE mark. Additionally, in 2019 the company entered into clinical evaluation agreements with Rocky Vista University College of Osteopathic Medicine (RVUCOM) and the University of Pittsburgh Medical Center (UPMC) and in 2020 with the Medical College of Wisconsin (MCW), Universitätsmedizin der Johannes Gutenberg-Universität Mainz and Centre Hospitalier Universitaire d'Angers, France (CHU Angers). In 2021 the company established clinical evaluation agreements with Inselspital University Hospital in Bern, Switzerland, and King's College Hospital - London, in the United Kingdom. In 2022 the company established a clinical collaboration with Shanghai General Hospital (China). In 2022 the company established a research collaboration agreement with Ludwig Maximilian University of Munich, Germany.

The company received CE mark approval for its TAEUS FLIP (Fatty Liver Imaging Probe) system in March 2020, indicating that the TAEUS FLIP system complies with all applicable European Directives and Regulations in the European Union ('EU') and other CE mark geographies, including the 27 EU member states. In the support of the company's commercialization efforts in the EU, the company has 4 sales representatives in France, the United Kingdom, and Germany and expect to expand marketing efforts into other CE markets as the company grows. The company actively attend various trade shows and clinical conferences across the U.K. and EU to drive the company's marketing presence amongst medical professionals that constitute the company's target market. The company has also entered into agreements with clinical evaluation sites in Switzerland, Germany, UK and France to collect clinical evidence with the aim to underscore the clinical utility of the TAEUS device for assessing NAFLD.

The company is pursuing FDA premarket clearance of the company's TAEUS FLIP system to enable sales in the United States. The company submitted a 510(k) Premarket Notification application to the FDA in June 2020. The company's submission happened to coincide with the onset of the COVID-19 pandemic, which strained the FDA's resources, causing it to prioritize COVID-19 related work and resulting in a backlog of non-COVID-19 premarket files pending review. Following meetings with the FDA in connection with its review of the company's application, in February 2022, the company determined that the 510(k) pathway was not the optimal option for the company's TAEUS FLIP system due to its novel nature and announced that the company would pursue the de novo pathway for FDA reclassification and clearance of the company's NAFLD TAEUS application.

Other Potential Clinical Applications for the company's TAEUS Technology

Temperature Monitoring of Thermoablative Surgery

The company also intends to develop a TAEUS platform application to guide thermal ablation surgery, such as in the treatment of cardiac atrial fibrillation, chronic pain and lesions of the liver, thyroid, kidneys and other soft tissues. The company plans to target clinical users of thermoablative technology, including interventional radiologists, cardiologists, gynecologists and surgical oncologists.

Thermoablation involves the use of heat or cold to remove malfunctioning or diseased tissue in surgical oncology, cardiology, neurology, gynecology, urology and cosmetology applications. Thermoablative technologies include RF, microwave, laser and cryogenic ablation.

The ability to visualize changes in tissue temperature in real time could potentially enhance the effectiveness and safety of thermoablation therapies and that the company's TAEUS technology platform combined with traditional ultrasound has the potential to guide thermoablation surgery more cost-effectively and more accurately than existing methods.

Vascular Imaging

The company's TAEUS technology can be used to image blood vessels and distinguish them from the surrounding tissue. In addition to the company's NAFLD and thermoablation applications, the company intends to develop a cardiovascular application based on its TAEUS technology that, with the use of a standard saline contrast agent, can enable existing ultrasound systems to perform a number of cardiovascular diagnostic functions, such as identifying arterial plaque or blocked or malformed vessels, as well as safely guiding biopsies away from vital vasculature.

The company's TAEUS platform has the potential to offer the advantages of CT and MR contrast enhanced imaging at the point of care using only a safe electrolyte solution as the contrast agent.

Tissue Perfusion or 'Leakiness'

The company's TAEUS technology can be used to image tissue perfusion, or the absorption of fluids into an organ or tissue. The company intends to develop an application for its TAEUS platform that would enable ultrasound detection of microvasculature fluid flows symptomatic of tissue compromised by trauma or disease.

Using the company's TAEUS technology, physicians will be able to quickly and clearly see tissue compromised by disease, such as cancer or trauma, especially with the use of a standard saline contrast agent, when CT or MRI is not readily available.

Intellectual Property

As of December 31, 2022, the company maintained a patent portfolio consisting of thirty-three (33) patents issued in the United States and twenty-three (23) issued patents in foreign jurisdictions, five (5) patent applications pending in the United States and thirty-one (31) patent applications pending in foreign jurisdictions relating to the company's technology.

Each of the company's utility patents generally has a term of 20 years from its respective priority (earliest filing) date. Design patents have a term of 14 years from a respective filing date. Among the company's issued utility patents in the U.S., the first patent is set to expire in 2033 and the last patent is set to expire in 2041.

Sales and Marketing

In parallel to securing all necessary government marketing approvals, the company has hired a small sales and marketing team to engage and support channel partners and clinical customers in primary geographic markets - initially in France, the U.K., and Germany, expected to be followed in the U.S. after FDA approval. As the company previously did with its Nexus 128 system, the company also intends to partner with several geographically-focused independent medical device equipment distributors to market and sell the company's TAEUS applications in secondary markets. The company has entered into a distribution agreement with a third-party covering future sales in Vietnam. These distributors have existing customer relationships, a strong knowledge of diagnostic imaging technology and the capabilities to support the installation, customer training and post-sale service of capital equipment and software.

The company also intends to work with original equipment manufacturers, or OEMs, of capital medical equipment (e.g., ultrasound equipment and thermal ablation equipment) to sell the company's TAEUS technology alongside their own new systems and into their existing installed base systems. These OEMs will find the company's applications attractive as the applications could enable them to generate additional revenue from their installed systems - as they do with aftermarket accessory portfolios. The company's relationship with GE Healthcare will facilitate this strategy.

Some of the company's future TAEUS offerings are expected to be implemented via a hardware platform that can run multiple individual software applications that the company plans to offer TAEUS users for a one-time licensing fee, enabling users to perform more procedures with their existing ultrasound equipment and retaining more patients in their clinics rather than referring them out to a regional imaging medical center for a CT or MRI scan.

The company also intends to offer a license for its TAEUS technology to OEMs, such as ultrasound and thermoablative capital equipment makers, for incorporation in their new capital equipment systems.

Engineering, Design and Manufacturing

Development of TAEUS Device

The company contracted with StarFish Product Engineering, Inc. ('StarFish'), a medical device contract manufacturing company, to develop ENDRA's prototype TAEUS device into a clinical product that met CE regulatory requirements required for commercial launch. The company leveraged StarFish's expertise for the preparation and submission of the company's CE Technical File documentation, submitted in December 2019, which enabled the company to secure the CE Mark for the TAEUS liver application in March 2020. The company also leveraged StarFish's expertise for preparation of documentation for the 510(k) submission made to the FDA in June 2020. The relation with StarFish has expanded to include the contract manufacture of the TAEUS liver system. As the contract manufacturer, StarFish sources components internally or via third party suppliers.

Regulatory Approval Pathway and Human Study

For commercial reasons and to support the company's application for CE marking, the company contracted with CIMTEC, a medical imaging research group, to conduct human studies through Canada-based Robarts Research Institute to demonstrate the company's NAFLD TAEUS application's ability to distinguish fat from lean tissue. In September 2019, the company announced the completion and reported top-level findings of Robarts Research Institute's initial healthy subject study and data collection of 50 subjects, which was included in the company's TAEUS liver device technical file submission for device CE mark. The company received CE mark approval for the company's NAFLD TAEUS application in March 2020. The company has registered the product in each target EU market.

In June 2020, the company submitted to the FDA its application under the Federal Food, Drug and Cosmetic Act (the 'FD&C Act') to sell the company's NAFLD TAEUS application in the United States.

The company is in the process of preparing a submission for the classification of the company's NAFLD TAEUS application as a Class II device under a de novo review, which process is described below under 'FDA Approval or Clearance of Medical Devices'. This de novo submission will include as support clinical data gathered from human studies comparing liver fat measurements by the company's TAEUS device to measurements by MRI-PDFF.

Regulation

In the European Union, applications incorporating the company's TAEUS technology are regulated as Class IIa medical devices by the European Medicines Agency (the 'EMA') and the European Union Commission.

Before and after approval or clearance in the United States, the company's applications are subject to extensive regulation by the FDA under the FD&C Act and/or the Public Health Service Act, as well as by other regulatory bodies.

Furthermore, the company is subject to various reporting requirements, including those prescribed by the Affordable Care Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Research and Development

The company's research and development expenses were $6,554,194 for the year ended December 31, 2022.

History

ENDRA Life Sciences Inc. was incorporated in 2007 as a Delaware corporation.