By Anita Dushyanth, PhD

INTRODUCTION

Since 2012, Hamilton Thorne (HTL.V) has been operating in two healthcare sectors: fertility care and cellular and developmental biology research with products such as precision laser devices and advanced image analysis systems.

In general, the laser systems used in fertility and cellular biology studies are large and expensive. Hamilton Thorne’s laser systems are miniaturized so that the unit fits into existing microscopes, provides high image resolution, offers improved working distance as well as controllable micromanipulation procedures. This design provides practical benefit to the medical community. Hamilton Thorne’s laser systems accounts for approximately 50% of revenues, image analysis accounts for 40% and consumables and services account for the remaining 10%. While the firm does not break out revenues for all of its products, about 70% of the company’s business involves human clinical procedures while animal breeding and biology research represent 15% each.

We believe that the firm possesses multiple compelling characteristics that make it an attractive investment including:

Further, the company collaborates with well-known research establishments/clinics all over the world where physicians, lab personnel and embryologists are given the opportunity to use the products distributed by Hamilton Thorne. Feedback from these leading institutions helps the company enhance their products and in adapting their treatments to current research findings and advancements. Management has mentioned in the past that clinical research establishments and other companies have shown interest in their products, which we believe represents a significant growth opportunity over the long-term.

Hamilton Thorne is well positioned to sell IVF laser technology along with its automated sperm analyzer because it is sold to the same customer base with a corresponding price range with an equivalent level of technical complexity. Its recently acquired Oosight technology complements well with Hamilton Thorne’s other products. Management has extensive experience with regulatory authorities to handle the compliance for medical devices and industrial scale manufacturing at their ISO 13485 and FDA registered GMP manufacturing facility.

MARKETED PRODUCTS

LASER SYSTEMS

Hamilton Thorne’s miniature laser systems help in performing robotic microsurgery on cells. In ART procedures, manipulation of stem cells/embryos using lasers has advanced in the past decade. Lasers are routinely used in assisted hatching and their use in embryo biopsy procedures is becoming more prevalent. In order to provide consistency, reproducibility and reliability, lasers are incorporated into microscopes to facilitate the application of rapid laser pulse firing, thereby allowing precise manipulation of embryos and cells. The power and pulse lengths of these infrared lasers are optimized to avoid damage to the DNA and the embryo as well as minimize mechanical strain. These user-friendly lasers help in reducing procedure times, which in turn reduces the duration the embryo/cells are exposed to non-ambient conditions. In addition to the utility in ART procedures, this laser technology is also used in life sciences research applications such as laser ablation for cell regeneration studies as well as cloning for genetic research and regenerative medicine.

The FDA classifies lasers for IVF as Class II medical devices. As per Occupational Safety & Health Administration (OSHA) safety standards, lasers used in IVF procedures are classified as a Class 1 laser product. The company’s objective lenses with laser sources can be screwed into the turret of most standard inverted or upright microscopes.

Clinical Lasers; The LYKOS and ZILOS-tk Class 1 lasers feature a 1460 nm, 300 mW laser and a pulse length as low as 1 microsecond. The LYKOS laser provides high image quality, improved working distance, multi-pulse software that allows rapid and repeated firing mode for fast and easy biopsy, and is compatible with all major microscope models with no laser alignment required. The laser beam is not transmitted through the eyepiece thus making it safe for the eyes. The brightness of the Red-i LED indicator spot found in the LYKOS is adjustable and visible through the microscope’s eyepiece. It can be installed on any inverted microscope. This model offers the flexibility of hands-free laser firing.

Research Lasers: The firm offers the legacy system, XYClone and the newer XYRCOS laser systems for research applications. Both these systems are a high power, Class 1, 1460 nm infrared lasers with a specially designed 40x or 20x objective lens that functions in both visible and near infrared wavelengths. The lasers attach to the microscope just like any typical objective lens and allow the use of the microscope’s standard features, such as fluorescence and Hoffman imaging. These systems are used for non-contact ablation of targeted membranes or structures.

The XYRCOS laser module comes with a RED-i target locator that is integrated into the objective lens. The patented Stiletto laser combines a proprietary laser, controller software and an automated stage for rapidly scoring of adherent stem cells. Unlike mechanical separation methods, the Stiletto allows isolation of multiple stem cell colonies for ablation in a streamlined fashion. Such non-contact laser-based elimination preserves the genetic integrity of the stem cell colony while removing unwanted cells. Such a system gives an opportunity for researchers to standardize a protocol easily so that the procedure is automated and the results are uniform across all users.

Clinical Laser Applications

• Diversified products, good product recognition, high quality

• Steady revenue stream

• Diversified global distribution of products

• Well-positioned for growth in U.S and global markets

• Attractive growth profile

• Blastomere Biopsy (embryo biopsy) is a technique that is performed during an IVF procedure to obtain embryonic DNA for preimplantation genetic diagnosis (PGD). On the third day of an embryo’s development, a single cell (blastomere) is removed and the developing embryo is then returned to the incubator for continued development.

• Trophectoderm Biopsy is an alternative method of embryo biopsy that is gaining rapid adoption, where the trophectoderm cells (extra-embryonic tissue) are removed. This method does not affect the inner cell mass, has less impact on the embryo and more cells can be obtained for analysis for improved detection. The LYKOS laser aids the trophectoderm biopsy procedure by breaching the outer layer of the embryo and dissecting these cells using the laser so that the cells may be quickly removed for biopsy, which limits the amount of time the embryo, spends outside the incubator.
  
  

• Laser-assisted Hatching (LAH): Assisted hatching is used to help the embryo hatch from its protective outer shell, and promote implantation in the uterine wall after embryo transfer. LAH with the LYKOS or ZILOS-tk uses a highly focused infrared laser beam to remove the outer shell in precise increments. LAH requires less handling of the embryo and is quicker than mechanical or chemical methods. Therefore, the embryo spends less time outside the incubator.