DOBI Medical International, Inc. (DBMI.OB)
Interview with:
Phillip C. Thomas, President and CEO
Business News, Financial News, Stocks, Money & Investment Ideas, CEO Interview
and Information on their
ComfortScan™ system, a noninvasive, nonionizing device designed to provide unique diagnostic information to assist physicians in better identifying and diagnosing breast cancer.

 

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DOBI Medical International begins marketing ComfortScan™ system internationally as an adjunct to mammography -- Enters final stages of U.S. FDA submission, review and approval

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Healthcare
Medical Equipment & Supplies
(DBMI.OB)

DOBI Medical International, Inc.

1200 MacArthur Blvd.
Mahwah, NJ 07430

Phone: 201-760-6464

Phillip C. Thomas
President and Chief Executive Officer

Interview conducted by:
Lynn Fosse, Senior Editor
CEOCFOinterviews.com
May 19, 2005

BIO:
Phillip C. Thomas, President and Chief Executive Officer


Phillip C. Thomas co-founded and serves as Chief Executive Officer and board member of DOBI Medical International, Inc. Mr. Thomas had been the Chief Executive Officer and a director of DOBI Medical Systems since December 1999. Previously, Mr. Thomas served as the CEO of Dynamics Imaging, Inc., a corporation from which DOBI Medical acquired its technology and other non-financial assets.  Over the past 25 years, Mr. Thomas has held a number of public and private high-technology senior executive positions.  Mr. Thomas received his B.A. degree from Brigham Young University and has completed executive development courses at Harvard Business School and Stanford Business School.


Company Profile:
DOBI (Dynamic Optical Breast Imaging) Medical International was founded to develop and commercialize innovative imaging technologies to improve the diagnosis of cancer and other diseases.  Currently, the company is developing the ComfortScan™ system, a noninvasive, nonionizing device designed to provide unique diagnostic information to assist physicians in better identifying and diagnosing breast cancer.   In addition, the company has developed the ComfortView™ reading software designed to help physicians analyze angiogenesis and assess breast disease. Both the ComfortScan system and ComfortView software are currently the subject of a U.S. clinical trial in progress.

CEOCFOinterviews: Mr. Thomas, what was your vision when you started DOBI?
Mr. Thomas: “Our original vision came out of the fact that every hour in the United States, five or six women die of breast cancer, twenty-four hours a day, seven days a week. That in combination with the fact that mammography, which is the most common form of breast cancer diagnosis, is about a 40-year-old technology. I felt we could do better than that and I set out to do that.”

CEOCFOinterviews: What has happened over time?
Mr. Thomas: “For the last seven years, we have refined our approach for identifying the key signs that are associated with the presence of [breast] cancer. This is in the area of the blood supply that has been shown to feed malignant tumors, which is known as angiogenesis. In theory, angiogenesis is required for a tumor to grow beyond the size of, say an eraser on the end of a pencil. A tumor this size will most likely not kill you, especially if it is a breast tumor. But when it develops a new blood supply and its own capability for sustained growth through angiogenesis, it becomes more dangerous. In the later stages, tumors such as this can become life threatening and start to metastasize to other parts of the body.”

CEOCFOinterviews: What is the ComfortScan™ system and how does it detect it?Mr. Thomas: “We know that angiogenesis is new blood vessel development and those blood vessels have certain characteristics. They are ill formed; they are very interwoven and chaotic in their structure as well as leaky.  Therefore, we take advantage of this physiological phenomenon along with the scientific knowledge that we have relative to the metabolic rate of malignant tumors. Malignant tumors have four times the metabolic rate compared to normal tissue in our bodies. So now, you have a malignant tumor that is consuming oxygen very quickly; blood vessels that are leaky and very chaotic in their structure surround it. With our ComfortScan™ system, we place the breast on a soft panel with red light and pass the light through the breast, which interacts with the blood vessels that are angiogenic in nature. We also put a slight amount of pressure on the breast, which allows us to momentarily reduce the flow of new blood into the angiogenic area around the tumor and slow the exit of blood from that same area. Therefore, at the time that the test is done, we are measuring the amount of light passing through the breast, we are also watching as the tumor is consuming oxygen in the angiogenic area.   This is called the de-oxygenation cycle. As we place external pressure on the breast while passing light through, the angiogenic area starts to appear in our images. The ComfortScan system takes 2.52 images per second over a 545-second time cycle. It begins scanning as the light passes through the breast, then we apply the pressure, and then we relieve the pressure. We see changes in light absorption over time that correspond to subtle changes in breast vasculature in response to the applied pressure. A colorized image of the breast is displayed in which different colors represent areas of increased or decreased light absorption. Temporal changes in light absorption associated with the de-oxygenation cycle have a different appearance than normal tissue. The dynamic images can reveal the presence of angiogenesis.  When you identify angiogenesis, you often have malignancy.” We see a bell curve that would be indicative of the presence of angiogenesis, and the oxy/de-oxy cycle that is common with malignant tumors. The resulting image shows the outline of the breast with light passing through normal areas of the breast with minimal absorption, but like in carrying the angiogenic areas of the breast, absorption is a darkened area of the breast because those blood vessels are blocking the light from coming through, and the absence of light is darkness. Now we have a dynamic image, which means we have a series of images and it is revealing of the presence of angiogenesis. When you detect angiogenesis, you often have malignancy.”

CEOCFOinterviews: Why is that more effective than mammography?
Mr. Thomas: “Mammography is very effective for women forty and above, for identifying the anatomy changes taking place in the breast when a tumor is growing inside the breast. We are the physiology part of the equation. With mammography, you can see anatomical change.  The ComfortScan system provides new data that is physiological, so now you have anatomy and combined with complementary physiology combined in a quick, inexpensive test for the first time.”

CEOCFOinterviews: Are you marketing it as an adjunct because it is easier to gain acceptance that way?
Mr. Thomas: “We have had many discussions with the FDA and their recommendation is that we market it as an adjunct in order to begin the establishment of the new modality. Their recommendation is to take an incremental approach where we would be an asset to aid in improving the diagnosis by having mammography identify possible lesions while our capability would indicate whether there was a concurrently suspicious area of angiogenesis present. Over time as physicians become more reliant on this new information, we will be exploring expanded uses for the device as additions to the FDA approvals that we are currently working toward. Expanded uses are foreseen with high-risk women who have dense breasts because of age or size of the breast or perhaps because they have been on hormone replacement therapy. Mammography has a more difficult time identifying lesions or anatomy from other natural parts of the breasts, which are sort of camouflaging the presence of the lesion because of the density in the breast.”

CEOCFOinterviews: Where is your product in use now?
Mr. Thomas: “In the fourth quarter last year, we began limited shipments to a few international locations. We do not have FDA approval at this time, but we are well underway in a trial supporting our FDA Pre-market Approval submission. We are working on the final step of the approval process, but until we have that, we cannot market the system in the United States. We have the CE mark, which means we can market the ComfortScan system in Europe. In addition, we are an ISO 9000 company and we have the ability to sell the product overseas in certain specific locations.”

CEOCFOinterviews: How is ComfortScan™ be received?
Mr. Thomas: “The excitement is building overseas. There have been a number of small studies that have recently been completed and results will be published on those studies in the near future. People in the medical community are starting to understand the real world of angiogenesis. They understand also that ultrasound and mammography cannot take advantage of the angiogenic process in terms of identifying malignancies. What DOBI Medical has is a new technology that more and more people are becoming excited about because it is the classic, faster solution that compliments an existing modality. Therefore, you do not have to throw away the equipment that you have an investment in, but you have a new tool that aids in providing new data that has not been very readily available.”

CEOCFOinterviews: What is the financial picture of DOBI?
Mr. Thomas: “The announcement that we made recently was the successful completion of a $10.5 million private placement with a number of institutions that we have been talking to and briefing about the company for several weeks. We are in our last step in our FDA submission process, so we have earmarked a significant amount of dollars for 2005, for completing the clinical trial that is required as the last step in our FDA premarket approval effort. At the same time, additional funds from this particular raise will go to continue to improve our patent portfolio as well as continue to build our international presence from a sales and marketing perspective. We have made the investment in a small manufacturing facility, and the resources that are needed to build devices for sales, are now in-place, as well as building devices for our FDA clinical study. Therefore, 2005 will be a year of clinical studies, both here in the United States and abroad. That will help to build additional shareholder value. The cash from this financial round will carry us well into the first half of 2006.”

CEOCFOinterviews: You mentioned attacking cancer in general; where do you go down the road?
Mr. Thomas: “According to the Angiogenesis Foundation in Cambridge, Massachusetts, over seventy different diseases are related to angiogenic activity. What the world is starting to understand more completely is the dynamic nature of our internal vascular system. We see a lot of vascular change as women go through pregnancy, and when we are wounded, angiogenesis is a factor in wound healing. There are many different diseases and conditions where angiogenesis is a factor. We see our intended use expanding as our product design evolves into three key areas. In the context of breast cancer, we currently see it used as an adjunct to mammography. Secondly, we potentially see it used as a broad-based imaging tool which physicians could use to monitor women at high risk for the disease, as we get through further FDA efforts to obtain that particular approval. Lastly, we see a very big opportunity in the area of therapy monitoring. What I mean by this is the pharmaceutical industry is spending literally hundreds of millions of dollars on new drugs designed to attack the blood supply feeding a tumor as a means of eradicating cancerous tumors of all types, not just in the breast. We initially would see ourselves as a unique and possibly unparalleled method of tracking the effectiveness of some of these therapies, but our focus today is in the area of breast cancer.”

CEOCFOinterviews: What are the challenges going forward?
Mr. Thomas: “We know that whenever anything new comes into the medical marketplace, it faces a certain degree of skepticism. That is probably a healthy skepticism in most cases. We have an obligation and responsibility to obtain strong valid clinical data from reputable sources and to be able to present that data in reputable conferences and seminars where that information is up for challenge and examination. We are prepared to do that; we are working with some very good institutions in the U.S. and abroad to generate strong, medically relevant clinical data that will help others the medical community feel comfortable about the new technology. There is a bit of a missionary effort and educational effort involved. We feel comfortable that we are doing the right things to go forward and provide credible clinical data and clinical results that will help people understand the advantages and potential of this new technology.”

CEOCFOinterviews: In closing, why should potential investors be interested and what should they know that perhaps they do not realize when they first look at the company?
Mr. Thomas: I think that investors should realize that we have an extraordinary team of entrepreneurial people with focus and integrity.  We are committed to advancing ComfortScan and working with the FDA to do so.  The FDA is a healthy endeavor in terms of trying to make sure this is a legitimate technology with medical merit.  They put you through a lot, but it is actually for our own benefit as we get through this because it strengthens our position in the marketplace, and it provides a core of clinical data to familiarize physicians with use of the ComfortScan system’s use. Investors, I would think, would want to pay attention to how well things are going in the FDA submission approval process and be mindful that even after we get an FDA approval, which never can be guaranteed, that the market is going to take some time to be trained and educated about this modality. As we advance through these milestones, we should see real interest in this new modality because it has the potential to fundamentally change and positively impact breast and other cancer diagnosis.”


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“People in the medical community are starting to understand the real world of angiogenesis. They understand also that ultrasound and mammography cannot take advantage of the angiogenic process in terms of identifying malignancies. What DOBI Medical has is a new technology that more and more people are becoming excited about because it is the classic, faster solution that compliments an existing modality. Therefore, you do not have to throw away the equipment that you have an investment in, but you have a new tool that aids in providing new data that has not been very readily available.” - Phillip C. Thomas

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