Diagnostics & Imaging Week Contributing Writer And D&IWs
Precision Therapeutics (Pittsburgh), looking to expand its testing business focused on personalizing cancer treatment, disclosed plans last week to go public. The company registered to sell up to $80.5 million in stock in an initial public offering.
Precision has been selling its ChemoFx chemoresponse test since 1997, but curtailed sales effort in 2003 due, it said, to reimbursement issues.
It said that following additional testing and product refining, Medicare in April 2006 began reimbursing for the use of ChemoFx in gynecologic cancers, and in August 2006 the company re-established a direct sales force.
The test uses a patient’s live tumor cells to assess the likelihood of responding to various cancer drugs or drug combinations. ChemoFx measures both the responsiveness, or sensitivity, of tumor cells to particular drugs, and their resistance, the company says.
Sales and marketing efforts at Precision now are targeting the gynecologic cancer market. The company in 2006 published a study that it said showed that ovarian cancer patients treated only with a drug or combination to which their tumor cells were classified as responsive by ChemoFx experienced a median tumor progression-free interval around three times the median progression-free interval for patients treated only with drugs classified as non-responsive.
The company plans to expand ChemoFx marketing efforts to additional indications such as breast, lung and colorectal cancers. The company noted that the FDA has approved 55 cancer drugs for commercial use, with about 400 additional cancer drugs now in clinical development.
The company says that the intrinsic cell response to a chemotherapeutic agent is the main determinant of tumor response, so it designed ChemoFx to analyze that tumor cell behavior. A resulting ChemoFx report based on the tissue, taken from the patient via biopsy or surgery, classifies the patient’s tumor as “responsive,” “intermediate” or “non-responsive” to each drug or combination requested by a physician.
The ordering physician can provide a list of up to 12 drugs or drug combinations to be tested against the patient sample. The ChemoFx process entails enriching and expanding the malignant tumor cells, challenging the cells with the selected chemotherapies, directly measuring the surviving cells and interpreting the results.
The company’s revenues for the first six months of this year were $962,000 (vs. $169,000 in the first six months of 2006), while its net loss for the first half of this year was $5.6 million. Precision had $10.5 million in cash as of June 30, a total that does not include $9.5 million brought in this month through a sale of convertible notes.
ChemoFx is provided at $450 per drug or drug combination tested, and the company’s average invoiced price is about $3,300 per test billed. Net revenue, however, is less than the average invoiced price because many payors do not provide coverage or reimbursement for ChemoFx, Precision said.
The company said it has obtained prospective Medicare coverage for the use of ChemoFx in gynecologic cancers, and been fully or partially reimbursed by more than 425 different private payors, including managed care organizations, on a case-by-case basis for numerous cancer types. For the first six months of this year, it has billed for 559 tests.
Precision in February 2006 raised $22 million in a venture round, bringing it total financing at that point to about $50 million.
Proceeds from the offering would be used to expand sales and marketing functions, including educating physicians and payors as to potential treatment benefits and economic value of the test. Funds also would be used for clinical studies to support validation of ChemoFx beyond gynecologic cancers, and on enhancements to ChemoFx to incorporate additional chemotherapies and to allow for testing of tumor responses to biologic therapies.
Among the largest Precision shareholders are Adams Capital Management, with a 39.1% stake, followed by Quaker BioVentures (21.5%), TVM Life Science Ventures (9.1%), and Birchmere Ventures (8.8 %).
In other financing activity:
• Immunicon (Huntingdon Valley, Pennsylvania) last week reported filing a universal shelf registration statement with the Securities and Exchange Commission, intended to permit the sale by Immunicon of up to $75 million of its common stock, preferred stock, debt securities, warrants, depositary shares, stock purchase contracts and stock purchase units.
The company said it has no current plans to offer the securities covered by the registration statement, with the terms of any offering to be established at the time of the offering.
Immunicon is developing cell- and molecular-based diagnostic and life science research products with a focus on cancer management. It says it has developed platform technologies for selection and analysis of rare cells in blood, such as circulating tumor cells and circulating endothelial cells that are important in many diseases and biological processes.
• Seno Medical Instruments (San Antonio) reported receiving a $2 million award from the Texas Emerging Technology Fund (TETF) that will support development of its technology for cancer imaging and detection and move it closer to the global market place. Seno, founded in 2005, is focused on the earliest detection of cancer through the use of its patented opto-acoustic technology.
Seno said that the patented functional imaging technology will be commercialized to produce real-time color images, which differentiates benign and malignant tumors, for all solid tumors, such as in breast cancer. Seno’s said it intends to provide the most advanced, high-quality products for cancer screening, diagnosis and treatment that are more humane than existing technologies.
The TETF is a $200 million program created by the Texas Legislature in 2005. A 17- member advisory committee of high-tech leaders, entrepreneurs and research experts reviews potential TETF projects and recommends funding for projects to the Governor, Lieutenant Governor and Speaker of the House.
To date, the TETF says it has allocated $94.1 million in grant funds to Texas companies and universities across the state.