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BG Medicine Revenues Jump to $622K in Q2; Firm Withdraws CardioScore 510(k)

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BG Medicine said this week that revenues for the second quarter increased 181 percent year over year, rising to $622,000 from $221,000 a year ago and beating the average Wall Street estimate of $520,000.

Product revenues spiked to $566,000 from $46,000 a year ago, "reflecting increasing demand for the BGM Galectin-3 test," the company said, while service revenues dropped to $56,000 from $175,000.

In comments on a conference call following the release of the results, BG executive vice president and chief financial officer Michael Rogers suggested the firm's product revenues for the second half of 2012 could rise to at least $2.5 million.

The statement came during a discussion of the company's ongoing loan agreement with General Electric under which it will be able to draw an additional $5 million on or before Feb. 10, 2013, provided it achieves $2.5 million in product revenues in the six months ending Dec. 31.

"Without giving specific revenue guidance, we feel like we're going to hit that ... and be able to draw the additional $5 million," Rogers said.

Last month, BG announced that it had filed a 510(k) submission with the US Food & Drug Administration for an automated version of its BGM Galectin-3 heart failure test to be run on Abbott Laboratories' Architect platform (PM 7/27/2012).

If it receives clearance, the new assay would be the first galectin-3 test on an automated platform and would represent a significant milestone for BG Medicine, which has maintained that moving the assay to an automated format is key to driving commercialization of the test.

The company also announced in May that it has obtained a CE mark and filed a 510(k) submission for an expanded use of the galectin-3 test (PM 5/17/2012). Currently the test is approved for monitoring patients with chronic heart failure. The new application would expand use to the general adult population for identification of people with an increased risk of heart failure.

According to President and CEO Eric Bouvier, this expanded indication would have a potential market of roughly 200 million people in the US and Europe, compared to around 20 million for its current indication.

The company also announced that it has withdrawn its 510(k) submission for its CardioScore test, which identifies individuals at high risk for near-term cardiovascular events such as a heart attack or stroke. Bouvier said that it withdrew the submission upon realizing it would not be able to respond in full to a request from FDA to confirm certain data from BG Medicine's BioImage validation study for the test.

"The data were originally obtained through medical insurance claims, a method previously validated in numerous peer-reviewed studies," Bouvier said in a statement. "Due to the time involved in the adjudication process, we determined that we would not be able to submit a complete response by the Aug. 15, 2012, deadline.

"We intend to submit a new 510(k) as soon as we are satisfied that the information requested by the FDA is addressed in the new submission," he continued. "We remain very confident about the performance of the CardioScore test, and the submission of a thorough and responsive 510(k) is one of our highest priorities."

On the call, vice president of scientific affairs Aram Adourian said that the required adjudication process was being managed and coordinated independently by New York's Mount Sinai School of Medicine. Bouvier noted that the process would not require measurement of additional clinical samples and that the company would not be able to offer a timeline for the process until after an upcoming meeting with the FDA.

BG reported a net loss for the quarter of $6.4 million, or $.32 per share, up from a net loss of $4.8 million, or $.25 per share, a year ago. On average, analysts had estimated a loss of $.35 per share.

It lowered its R&D spending 13 percent to $2.1 million from $2.4 million, but increased SG&A spending 72 percent to $4.3 million from $2.5 million, due to commercialization efforts associated with the BGM Galectin-3 test, as well as personnel-related costs and expenses from being a public company, the company said.

It finished the quarter with $23.3 million in cash, cash equivalents, and restricted cash.

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