Investors who aren’t catching wind of the power of exosomes are missing a rapidly growing science as it relates to diagnostics, drug delivery, and novel disease treatments. Exosomes, nano-size extracellular vesicles secreted by nearly all somatic cells and found in body fluids, were grossly misunderstood historically, but that is all changing. A growing body of research is detailing the relevance of exosomes in cellular health and the important function that they serve in cellular communication by ferrying proteins and genetic materials between cells.
James McCullough, chief executive at privately held Exosome Diagnostics, appropriately has dubbed exosomes as “the body’s Federal Express system.” Perhaps more succinctly, Dr. Douglas Taylor of Exosome Sciences, a subsidiary of Aethlon Medical (OTCBB:AEMD), has said that exosomes are akin to the “Twitter of cells” because of the messages they deliver from cell to cell.
Watch an interview with Dr. Douglas Taylor explaining the role of exosomes and the benefits of exosome diagnostics:
Exosome Diagnostics is developing biofluid-based molecular diagnostic tests for use in personalized medicine, with their lead product being a test that captures exosomes in urine for analysis of ribonucleic acid to detect mutations as an indication of prostate cancer.
A select few public companies have emerged as pioneers in the exosome space, including Life Technologies (NASDAQ:LIFE), Aethlon Medical, and Eli Lilly & Co. (NYSE:LLY). By itself, Eli Lilly is not really a player in the space, but it forged a partnership with Exosome Diagnostics in September to gain access to the company’s diagnostic tests to identify gene mutations and exosome expression levels in the blood that might help them better predict drug response and disease recurrence.
Another way to try and benefit from Exosome Diagnostics’ test kit advancements is to take a look at QIAGEN N.V. (NASDAQ:QGEN) as the two companies partnered in July to develop and commercialize products for capturing and processing RNA and DNA from biofluid exosomes and other microvesicles. The companies hope to have co-branded kits commercialized in the first half of 2014.
The way that companies are quickly teaming-up to expedite development of technologies related to exosomes exemplifies the unique potential of these tiny, nucleic acid and protein-carrying sacs to revolutionize diagnostic procedures with greater efficiency and less invasiveness than biopsies that are conducted today. It also speaks to the best way to play stocks in the exosome industry: be in early and look for partnerships and cutting-edge developments.
Life Technologies is a leader in utilizing exosomes in diagnostics and a great resource for learning more about exosomes in general. The company has developed technologies for breaking down the process of capturing and isolating exosomes from body fluids and then subsequently isolating and analyzing the proteins or ribonucleic acid that they are carrying. The company sells a broad range of reagents and kits for total exosome isolation, whether from cell culture media, serum, plasma, urine or other body fluids. They also sell kits for isolating specific subpopulations, intact exosome analysis and cargo isolation and analysis.
Life Technologies is in the midst of being acquired by Thermo Fisher Scientific (NYSE:TMO) as part of a $13.6 billion-dollar deal (plus assumption of $2.2 billion in debt) announced in April. Thermo is facing a few regulatory hurdles with buying Life because the combined company will control about half of the cell culture market, which could mean some divestures to gain regulatory approval. However, if the deal is completed, Life will bring a high-profit revenue stream to Thermo through its e-commerce channels that generate a significant portion of Life’s revenue.
Exosomes, whether increased in numbers due to a disease or not, do not define a condition, so it is necessary to see what is inside or to be able to test the surface of the exosome to detect a disease. To simplify and understand, think of plastic eggs (exosomes) floating down a river (body fluid). More eggs may indicate that there is a problem, but no matter what, it is necessary to net the eggs for examination and to open them up to interpret what is inside.
It’s this one-two punch of detecting and capturing exosomes that has created a very unique dynamic between Aethlon and its subsidiary Exosome Sciences. Built upon its ADAPT System, Aethlon has developed the Hemopurifier, a first-in-class medical device that has been documented to safely capture pathogens and exosomes in the circulatory system that underlie a variety of conditions and diseases, including colorectal cancer, lymphoma, melanoma, ovarian and breast cancer. Exosome Sciences is developing diagnostic tools with industry-leading sensitivity to detect and quantify the presence of exosomes in body fluids.
The company’s scientific team is led by Dr. Douglas Taylor, one of the world’s foremost experts in exosomes and the man credited with the discovery of tumor-secreted exosomes. Dr. Taylor was pioneering research in exosomes in the 1970’s, long before the U.S. National Institute of Health acknowledged studies of scientists such as Dr. Taylor validating that exosomes are far more than simply cellular debris.
Exosome Sciences lead product is ELLSA, an acronym for an Enzyme Linked Lectin Specific Assay, which has been confirmed to identify the presence of exosomes in not only the aforementioned cancer lines, but also human immunodeficiency virus and tuberculosis. The company is working to build-out the platform for additional assays using exosomes as a real-time biomarker for viral infections, pregnancy complications, birth defects and cardiovascular and neurodegenerative diseases.
Paralleling other agreements in the industry, Aethlon intends to sell or license its technology to an established research diagnostics organization. Given the advanced stages of the flagship product and the extensive industry reach that is now afforded to Aethlon with Dr. Taylor joining the team in September, investors should remain attentive to developments on that front.
It has only been in the last few years that the scientific community has started rallying around the use of exosomes. With added attention comes additional possibilities and these companies cumulatively sit at the forefront of exosome research and initiatives within the scope of public entities. Popular Science recently looked ahead at 2014 and named work with exosomes to make cancer diagnoses less invasive as one of the 20 breakthroughs that will shape the world next year.
If industry professionals are seeing the potential of exosomes and major biotechs and diagnostic tool makers are seeing it as well, it’s just a matter of time before Wall Street embraces it, providing a boon in value as they look to get a piece of companies with leadership positions in the space.
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