Spectral Medical’s Dialco Medical Announces 20 Year Exclusive License Agreement for DIMI Hemodialysis System in the United States and Canada

TORONTO, April 08, 2021 (GLOBE NEWSWIRE) — Spectral Medical Inc. (“Spectral” or the “Company”) (TSX: EDT), today announced that its wholly-owned subsidiary, Dialco Medical Inc. (“Dialco”) has entered into an expanded, long-term licensing agreement with Infomed SA (“Infomed”) for the DIMI hemodialysis system, extending Dialco’s exclusive rights in the United States and Canada through 2041. The initial term of the agreement shall extend to December 31, 2026 (“Initial Term”), and the agreement will automatically extend for three additional five-year periods (“Renewal Terms”).

DIMI is indicated to treat patients primarily with chronic renal failure with or without fluid overload using hemodialysis (“HD”), hemodiafiltration (“HDF”), hemofiltration (“HF”) and/or ultrafiltration (“UF”). Dialco recently received 510(k) clearance by the United States Food & Drug Administration (“FDA”) for DIMI for use within a wide variety of settings including hospitals, clinics, and skilled nursing facilities.

“Finalizing the long-term licensing agreement with Infomed is an important milestone for Dialco as we continue to move forward with our regulatory and commercialization paths for DIMI,” said Dr. Gualtiero Guadagni, President of Dialco Medical Inc. “We are pleased with our recent DIMI FDA clearance for use in hospital and clinical settings, as well as receipt of our DIMI Health Canada license for use in Canadian hospitals, clinics and in home. We do have a few more regulatory milestones to achieve over the next year to unlock the full commercial capabilities of DIMI, which includes expanding DIMI’s claim to in home use in the U.S. and peritoneal dialysis (“PD”) use in the U.S. and Canada. From a commercialization perspective, we believe DIMI’s key features are best-in-class and remove all significant barriers to in home use adoption, and is positioned as the ideal device to deliver chronic dialysis treatments to patients in skilled nursing facilities.”

DIMI Value Proposition: Addressing Barriers to Adoption for Home HD

The DIMI renal replacement system is based on a fully integrated cassette technology, which simplifies set-up, operation, and management of a dialysis session when compared to other instruments currently available on the market. The DIMI system comes fully assembled and uses pre-packaged dialysis fluid bags providing greater portability and versatility. DIMI does not require any plumbing or electrical infrastructure changes or monthly maintenance that other products on the market demand. Dialco recently received its Medical Device Single Audit Program (“MDSAP”) certification, which is the highest quality and regulatory standard in the medical device industry.

Remaining Regulatory Pathway:

Dialco recently received authorization of its Investigational Device Exemption (“IDE”) protocol to conduct a 35-patient usability trial to demonstrate the safety and efficacy of DIMI for performing hemodialysis in the home environment. Management believes it has both designed its usability trial and identified the external resources required to ensure a successful trial outcome. These external resources include engaging a CRO to manage the trial and onboarding trial sites that can enroll suitable patients on an expeditious basis.

In addition to the usability trial, the other key regulatory activities and milestones are below:

FDA Approvals:

• PD FDA 510(k) submission expected in Q3 2021. This enables patients to use DIMI for automated PD treatments at home, especially for those who are transitioning from PD to home HD;
• Special FDA 510(k) application for remote monitoring software submission expected in Q3 2021. This unlocks the full remote monitoring software suite, allowing physicians to remotely check-in and adjust a patient’s treatment regime;
• Special FDA 510(k) application for home HD submission expected in Q3 2022. This is the final step approval to allow for in-home use of DIMI.

Health Canada Approvals:

• In March 2021, Dialco obtained its DIMI Health Canada license for use in Canadian hospitals, clinics and in home. There remains one final Health Canada license for DIMI to unlock the full dialysis modality of the device.
• Health Canada PD use submission expected in Q3 2021.

Table 1: DIMI vs. Competitors

Chris Seto, Chief Executive Officer of Spectral, commented, “Extending our license agreement with Infomed out to 2041 is an important milestone and will help create and maximize value for our shareholders. We believe DIMI is a disruptive technology that is at the forefront of addressing the most significant barriers to adoption for HHD, and DIMI’s best-in-class differentiating characteristics should be an advantage in penetrating what we see as an approximately $5 billion+ annual addressable market. Additionally, we are excited to embark on our DIMI usability trial. We believe this represents an incredible commercial opportunity to demonstrate positive real world experience and the versatility of DIMI amongst our clinical trial partners, who are also our potential customers. We remain committed to realizing the full commercial potential of DIMI and look forward to providing meaningful updates as developments unfold.”

About Spectral

Spectral is a Phase III company seeking U.S. FDA approval for its unique product for the treatment of patients with septic shock, Toraymyxin™ (“PMX”). PMX is a therapeutic hemoperfusion device that removes endotoxin, which can cause sepsis, from the bloodstream and is guided by the Company’s Endotoxin Activity Assay (EAA™), the only FDA cleared diagnostic for the risk of developing sepsis.

PMX is approved for therapeutic use in Japan and Europe, and has been used safely and effectively on more than 300,000 patients to date. In March 2009, Spectral obtained the exclusive development and commercial rights in the U.S. for PMX, and in November 2010, signed an exclusive distribution agreement for this product in Canada. Approximately 330,000 patients are diagnosed with severe sepsis and septic shock in North America each year.

Spectral, through its wholly owned subsidiary, Dialco Medical Inc., is also commercializing a new set of proprietary platforms addressing renal replacement therapy (“RRT”) across the dialysis spectrum. “SAMI” is targeting the acute RRT market, while “DIMI” is targeting the chronic RRT market.  Dialco is currently pursuing regulatory approval for U.S. in-home use of “DIMI”, which is based on the same RRT platform as “SAMI”, but will be intended for home hemodialysis use.  “DIMI” recently received its FDA 510k clearance for use in hospital and clinical settings, and obtained its Health Canada license for use within Canadian hospitals, clinics and in home.

Spectral is listed on the Toronto Stock Exchange under the symbol EDT. For more information, please visit www.spectraldx.com.