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Epigenomics' First-Half Revenues Inch Up; Firm Will Cut Staff in Restructuring Effort

By a GenomeWeb staff reporter

NEW YORK (GenomeWeb News) – German molecular diagnostics firm Epigenomics today reported that its first-half revenues increased 1 percent year over year, and the firm is implementing a restructuring that will include cutting its staff by nearly half.

The Berlin-based firm reported first-half revenues of €990,000 ($1.4 million), compared to €970,000 for the first half of 2010. Its net loss increased 10 percent to €5.90 from €5.40.

Epigenomics sells the Epi proColon test for the early detection of colorectal cancer. It is based on the company's Septin 9 DNA methylation biomarker and was launched in October 2009.

The firm is focusing its efforts on developing a second-generation version of the test and said today that it remains on track to submit a Premarket Approval application with the US Food and Drug Administration in the fourth quarter of this year. It also said that it intends to increase its focus on the US market as it gears up for commercialization of the test, and as a result it is undertaking a restructuring.

Among the steps being taken as part of the restructuring is the relocation of its US headquarters to the East Coast from its current base in Seattle, though it plans to retain "key Seattle staff in a satellite office." The company recently hired Noel Doheny, former CEO of Gaithersburg, Md.-based OpGen, to head the US operations.

In addition, direct commercialization in the European self-payer segment will be de-emphasized and a key account approach for both Epi proColon and the firm's other test, Epi proLung, will be directed toward institutions such as healthcare providers, health insurers, and large institutional customers.

Epigenomics also will discontinue early-stage product and technology research and scale down R&D efforts as it concentrates on second-generation product development. It intends to maintain biomarker discovery and development capabilities for collaborations with pharmaceutical firms.

Finally, Epiegnomics said that it will cut its workforce from 84 employees to 45 employees by the end of this year. However, it said that it plans to expand its US operations in 2012 as it prepares to launch Epi proColon 2.0. The firm expects to realize €3.5-€4 million in annual savings due to the restructuring, though it will recognize a one-time restructuring cost of around €3 million.

Epigenomics finished the first half of the year with €20.7 million in cash and cash equivalents.