M. Marin: Thank you everyone for joining us. And George, I wanna say thank you in advance. With us today for a CEO chat is GA, the CEO of NetraMark, to talk about the company and the outlook. And George, let’s just kick it off and go directly into the chat. Can you please talk a little bit about NetraMark solutions, and how you believe those solutions and tools can help the pharmaceutical industry de-risk and optimize clinical trials and potentially save drug sponsors and CROs time and money.
George Achilleos: Perfect. Well, first of all, thank you for having me. I always appreciate having the opportunity to talk about NetraMark, and what its capabilities are within the pharmaceutical industry. It’s rare that you have an opportunity to actually feel like you’re part of a company that can have a really substantial impact on an industry. So I really appreciate the opportunity. As far as NetraMark, our solutions, just to be clear, we are an AI company, focused at the pharmaceutical industry. And the question really was, how do we help the industry de-risk and optimize clinical trials? And really, it’s not really that complicated. We all know that clinical trials fail at a very high clip rate. And what’s even more concerning, is if you look at late phase studies, essentially phase three studies, those are still failing at upwards of a 50% rate. So if you consider a 50% failure rate at phase three, that’s a horrible time and place for any pharmaceutical company to fail. And so, the question really began to percolate. Would there be a way to understand how to optimize and de-risk these trials? And when we say optimize and de-risk, really, if you think about a trial at a very high level, you’re talking about two key variables.
GA: You’re talking about a drug, which is a new novel drug that is hopefully going to work its way through the clinical trial process. And you’re talking about patients that are gonna get the drug administered to them. And when a drug does not pass through a clinical trial process, there’s some issue. The million-dollar question is, what’s the issue? And NetraMark’s unique approach is that, as opposed to analyzing all sorts of third party data sets and coming back and saying, oh, we’ve analyzed hundreds of thousands of trials in X, Y, Z therapeutic area, and this is what we found, and now you should apply it to your trial, what we’ve done is taken a very, very novel approach. And that approach is, why don’t we analyze the clinical trial data readouts that are coming from the pharmaceutical companies. And those are important to analyze because those are data sets that are very specific to the drug, one of the variables I talked about, and the patients that are getting the drug administered to them. And if you could access that treasure trove of data, and try to understand and be able to understand, if there are subpopulations that you could now know as a pharmaceutical company that are affecting drug response, placebo response, depending on therapeutic area and/or adverse events, if you could know what those subpopulations are, would that help you?
GA: And it comes to designing the protocol of the subsequent phase of a study. So, if you have, for example, you have a phase two data readout, we would analyze that data, and we would find those subpopulations that are affecting either drug response, placebo response, and adverse events. Those subpopulations would come with statistical p-values and effect sizes. And you would use the information essentially as inclusion exclusion criteria. And you would enrich the protocol that you’re designing for the subsequent phase, with the subpopulations and the inclusion exclusion criteria, that NetraMark would be able to identify. Imagine a tool that could help you identify super responders of drugs, people that are highly susceptible to placebo. And so, you would enrich the inclusion exclusion criteria moving forward. And that’s our thesis with respect to if you could do that, you would essentially begin to optimize and enhance the chances of having a potentially subsequent phase be successful. And ultimately, that’s what we’re always looking for. And the key here is that we’re analyzing the live clinical trial data, and all of the data. And in many trials, Marla, we’re talking about between 520,000 variables per patient being collected.
GA: And what most companies are able to analyze are a few of those variables. What we can do is analyze all of those variables. 1000 variables, 20,000 variables. And those permutations are in the trillions. We can analyze all those variables simultaneously to find the subpopulation of variables that are affecting those items that I mentioned. Hopefully that helps.
MM: That does help. Thank you. And just to drill down, one follow-up question to what you just said. I think you noted a 50% failure rate for those drugs that enter phase three. If we look at the entire cycle of the clinical trials beginning with phase one, what is the overall success rate that those drugs finally achieved? What percentage finally achieve a regulatory approval?
GA: Yeah, if you go back in time, to the conception of a drug through to regulatory approval and commercialization, you’re talking about, overall, all therapeutic areas, about a 12% success rate, so an 88% failure rate. This is a tough business, Marla.
MM: Okay, thank you. And you’ve mentioned in some of your filings and some of your discussions with the investment community, a critical path innovation meeting, a CPIM. Can you talk a little bit about what that is, give us an update on where you stand with that potential meeting with the FDA, and what you see as the expected benefits of having such a meeting?
GA: Perfect. Great question. I do get that all of the time. Obviously, since we work in the pharmaceutical industry, there’s always that question of, oh, this is an industry with a regulator that’s hovering over top. So, I do wanna be clear, yes, and I’ll get to the CPIM and where we are with respect to the CPIM process, but I do want to articulate just before I dive into that, to make sure that everyone understands that the FDA, when it comes to enrichment strategies, there’s actually guidance from the FDA, that is supportive of enrichment strategies that reduce variability, enhance prognosis, and optimize response predictions. So, currently what we do is aligned with the regulator guidance, with respect to enrichment strategies. I wanna be clear about that. The second thing, though, is the CPIM. What is it, and why are we doing it and what are the benefits? So, when you go, as a company such as ours, a tech company that goes, is moving forward into this industry of the pharmaceutical industry, you want to also make sure that in parallel, you’re interacting with the regulators. And why is that? Well, it’s always good to understand if you can get further guidance, stamp of approvals, recommendations, et cetera, for your technology.
GA: In order to do that, you have to interact often with the regulator. So, what we decided to do, was to go forward to the FDA in particular with our technology and go through an application process with a very detailed documentation about what our technologies are, what the unique context of use of the technology is, et cetera. And if you can get through the CPIM, Critical Path Innovation Meeting application process, you get accepted into a meeting. And the reason you wanna be in the meeting, is because that is an opportunity to have a closed-door meeting with the FDA, where they bring all parts, different parts of the FDA to bear in this meeting, so that you can formally talk about the technology that you have, and therefore gives the opportunity to the regulator to essentially ask a lot of questions of us, NetraMark, and then, be able to give us very clear guidance as to what we should do. Sometimes the guidance could be, the options are, it could be, you know what? NetraMark, you’re totally aligned with our current enrichment strategies, everything’s fine.
GA: Or they might say, there’s some further innovation and novelty to what you’ve built, I think you should go forward and apply to an ISTAND program or a varied amount of programs that could exist within the FDA. So as opposed to us just going forward and saying, we’re gonna apply for an ISTAND or we’re gonna do X and Y and Z, the better path we thought was to interact with the regulator, see if we would qualify to have a closed-door meeting with the regulator, so that we could actually work based on their guidance with respect to where within the regulator we should go. So, we applied for the Critical Path Innovation Meeting, earlier this year. I can tell you that we have been accepted after going through the formal process. We have been accepted to have a Critical Path Innovation Meeting with the FDA. And now it’s the FDA, and so things take time. We’re currently working on scheduling that meeting, because there’s all sorts of parties from the regulator that would come together, for hopefully in and around the September or early October timeframe is what we’ve been given. So, the good news, we’ve gone through the application process, we’ve been accepted for the Critical Path Innovation Meeting, and we’re now in the process of scheduling that meeting.
GA: And as I said, the expected benefits are clear feedback from the regulator with respect to how we fit, with respect to the current guidance that they have, which we know we fit within that. But furthermore, would there be a varied path that we could go through the regulator for a more specific, if you will, endorsement of the technology and it’s use within the pharmaceutical industry?
MM: Okay, thank you. And you’re thinking now, that that meeting you might get as early as September, but we know based on just hearing the news, reading the papers, that there are some delays at many government agencies, regulatory agencies. Is that, do you think the September timeline, if it got pushed back, it wouldn’t in any way reflect on the likelihood of your having this meeting at some point in 2025?
GA: No, we have been communicated. Specific communication from the FDA that says, you are approved now for a critical path innovation meeting, and their guidance to us would be, that you would have the meeting in actually late August, September, or early October.
MM: Okay, great. Thank you. Okay, so I’m switching gears now. You recently signed an agreement which looks like an important agreement, I believe it was in April, and we signed an agreement with Worldwide Clinical Trials, a clinical research organization. And if you could give us a little bit of color before you answer the question about this agreement as to what exactly a clinical research organization does, can you talk a little bit about this agreement? How quickly you expect the NetraMark solution toolkit to be integrated within worldwide clinical’s offerings, and how you see that unfolding. Thank you.
GA: Perfect. Great question. Yes, very important agreement for us. So, when you’re figuring out a channel strategy into the pharmaceutical industry, really there’s two approaches. Direct to the pharmaceutical companies or using a channel partner. We are going direct to the pharmaceutical industry, but we also chose to try to select a great contract research organization or a CRO that we could partner with, because 65-70% of trials are actually outsourced to a CRO to actually run the trial. So, we signed a global agreement with Worldwide Clinical Trials. They operate in over 60 countries around the world. It is public that they were bought by Kohlberg, a private equity firm, for a little over $2 billion about a year and a half ago. So, this is a pretty large CRO with a global footprint. Our agreement is, as I said, three years. And the specifics of the agreement are, that we will be embedded in all their phase two neuroscience and oncology clinical trials and select phase three clinical trials, for the first part of the agreement. And then, the objective in the future would be for broader availability where we would be essentially integrated across all therapeutic areas and trial phases.
GA: So, we finalized that agreement. We announced it in April. They’re a large organization. We have to go through an onboarding process. We expect that to be done late July, early August. So, at that point in time, is when we feel like we would start becoming embedded into their bids moving forward. So really right around the corner, we’re almost done the onboarding process, so not very far into the future.
MM: Great. Thank you. And is it too early to give us any kind of feedback as to what you expect to see over the next, let’s say, one to two quarters out of this agreement?
GA: It is a little bit too early, but I can tell you we did provide guidance that says, because, Marla, you got to marry this with the fact that we’ve probably got 140 companies in our own sales pipeline. So, if you take our own sales pipeline and worldwide, our expectation, and this was from about June of 2025, for the 12 months moving forward, was about 8-10 million Canadian. So, let’s call that 6-8 million U.S or something in that range of contracts to go into contracted backlog. So that’s our projected contract backlog number that we expect over the following, let’s call it ten months from now. And that should be starting, the influx of those contracts should be starting quite quickly.
MM: Got it, thank you. And that leads into my next question, which is the addressable market. Can you give us a little bit of color on how you see your addressable market? And you talked before about some of your go to market plans, going directly with the drug sponsor as well as going with CROs, but talk a little bit about your target market, if you will.
GA: Yeah, so that’s a great question. The market is huge obviously. If you look at the market for global clinical trial support services, which is often the budget that we draw from, it’s about expected to grow to about a $47 billion market over the coming five, six years. So, it’s a massively growing market. And if you look at AI and healthcare, that’s even a substantially larger market growing to about 148 billion. So, these are massive market opportunities. There’re concurrent cumulative trials going on as of 2024, closing in on 400,000 concurrent clinical trials. So, like I said, you can’t just pick CRO now. Their worldwide is huge with the global footprint of over 60 countries, which is very important, which gives us great coverage. But, if they run 80, 100 clinical trials per year that they contract, there’s also this massive other market of sponsors that we wanna be also going direct to. And the other key thing for all the listeners to know, is that we are actually, we do focus on neuroscience, CNS and central nervous system related diseases and oncology, as a go to market strategy. But the machine is therapeutic, area agnostic.
GA: It’s just really looking at variables, so it doesn’t really care. But we are focused on those two verticals in particular of CNS-related diseases which could be depression and Alzheimer’s, et cetera and oncology, is those are two massive and important markets, where we can have a very meaningful impact.
MM: Thank you. And that pretty much does it in terms of my prepared questions. But before we end this chat, is there anything else that we didn’t discuss that you feel is important for our listeners to know?
GA: I think one of the other things that’s important is A, the technology stack is built. So, this isn’t a fantasy of an AI solution that we’re gonna be building over time. So that’s an important thing to consider. The second thing, which is really exciting to me, and hopefully we will see the comings of this in the next four to eight weeks actually, is built off the back of the NetraAI technology, which is our core technology. We have two more offerings that we will be launching into the market. One is a patient adjudication software, that allows a sponsor to look at patients as they’re being recruited, and compare them to what NetraAI found, let’s say, out of their phase two data. So, as they’re recruiting in phase three, we would look at the incoming patients, and it would give them a downstream view of these patients and how they relate to the personas and the variables that NetraAI discovered. So a really interesting tool that give sponsors a little more power when it comes to understanding the patients that are being recruited into their trials, and as well, looking at how they’re being recruited into their trials on a site by site basis, so that they can help make decisions on some of those items, like which sites are working or not during the trial.
GA: The other part that’s important as well, is that we’re launching what we call a paradoxical site management tool, which is, as you’re running a trial, imagine you have many sites that you’ve recruited patients into. What if there were some sites that could be essentially monitored, so that a pharmaceutical company could understand, wait a minute, these three sites are deviating off the mean of the other sites. Therefore, should we go and take a look at what’s going on at those sites? That’s why we call them paradoxical sites, so that they can have a better purview into performance from a site management perspective. All based on the same tech stack and essentially almost triples our offering base. So, we’re pretty excited about those two things as well, Marla, which we think will be very accretive to the contract backlog over time. Those are some of the key things that I wanted to highlight.
MM: Thank you so much. I think we’re out of time at this point and I want to thank you for that very comprehensive overview of the company, and I look forward to speaking with you again at the next CEO chat. Thanks again.
GA: Again, thanks so much for having me.
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