This article has been updated from a previous version, which incorrectly stated that the company plans to shift its R&D resources toward prostate cancer classification and tissue healing in 2007.
NEW YORK (GenomeWeb News) — Epigenomics, trying to recover from a year in which it lost a significant revenue-generating partner, has streamlined its product-development plans for its DNA-methylation-based screening products, and seeks to strike up “multiple non-exclusive partnerships,” the company said today.
The company made its remarks in a statement reporting its 2006 financial results, which showed that revenues plummeted 63 percent as R&D spending ticked up 7 percent and net losses rose 75 percent.
Epigenomics’ new CEO, Geert Nygaard, said in the statement that he is “convinced that Epigenomics’ DNA-methylation technology is ideally positioned to fill the large unmet need in early cancer diagnosis. … ”
He said the company, which called 2006 a "challenging" year," is “focusing all our strength, expertise and resources” on developing its colorectal cancer diagnostic and on finding new partnerships to commercialize its screening pipeline.
The German diagnostics company hopes to launch a colorectal cancer test “via a reference lab” some time in 2008.
As for the financials, total receipts for the year ended Dec. 31, 2006, dropped to €3.5 million ($4.7 million), from €9.6 million in 2005.
The company said contributing to decline in receipts was a one-time “multi-million-euro milestone payment” connected to the termination of its four-year biomarker alliance with Roche Diagnostics in December, and fewer new business collaborations.
Roche abandoned the alliance with Epigenomics because it said the colorectal cancer screening data Epigenomics had presented at the time “did not meet Roche criteria for development as in vitro tests.”
The companies had agreed in 2003 to employ Epigenomics’ DNA-methylation technology to develop cancer drugs and diagnostics and prognostic tools for colon, breast and prostate cancer. Roche backed out of the colon and breast cancer development alliances at the beginning of 2006.
The company said that in spite of losing the Roche partnership, it plans to build on some successes it had during the year, including out-licensing patent families under deals with Qiagen and Affymetrix.
The company said it has now been granted 61 patents.
Revenue for 2007 will depend on R&D spending and partnerships, but it is expected to be “similar to 2006,” the company said.
R&D spending increased to €8.7 million from €8.1 million year over year.
Epigenomics said it shifted 2006 R&D resources toward its prostate cancer classification program and the development of a proprietary tissue-testing diagnostic program in 2006.
In 2007, the company said it intends to focus its resources on development of its colorectal cancer screening test.
The company said net loss increased to €15.4 million from €8.8 million a year ago.
Epigenomics said it had around €17.3 million in cash, cash equivalents, and marketable securities as of Dec. 31.