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CardioDx Focused on CAD Test Adoption, Not IPO

By Tony Fong

NEW YORK (GenomeWeb News) – Having recently closed a financing round that brought in more than $40 million, CardioDx is not interested yet in going public, according to its CEO.

CardioDx disclosed its Series E financing round two weeks ago, bringing the total it has raised since its founding in 2004 to more than $100 million. But while financing rounds of such amounts can be a precursor to a company's initial public offering, CardioDx CEO David Levison recently dispelled any thoughts that his firm is going that route, saying that instead, the Palo Alto-Calif.-based firm will focus on increasing adoption of its current test on the market for obstructive coronary arterial disease while continuing work on other tests in its pipeline.

"We believe that CardioDx can be a very large, very profitable company, and that is our objective," he told GenomeWeb Daily News. "So we're really focused on growing the business and moving toward profitability rather than an exit strategy."

He added that the firm's investors — which include JP Morgan Venture Capital; Kleiner, Perkins, Caufield & Byers; Mohr Davidow Ventures; Intel Capital; and GE Capital — have not pressured CardioDx to pursue an IPO, but remain more interested in driving the company into the black.

Similarly, while it has attracted attention as a possible acquisition target, Levison said that the "right home" for CardioDx will be ultimately determined by its success in transforming itself into a self-sustaining business with a full menu of tests for heart disease.

"All that other stuff will shake itself out, but [it] shouldn't be our objective," he said.

The company's objective in the immediate term is continued commercialization of its Corus CAD test, launched in June 2009 as a laboratory-developed test. The company has 11 sales representatives throughout the US selling the test to physicians. The commercialization build-up will involve getting more physicians to use the test and getting physicians to incorporate the test into their practices more routinely.

Another equally important component, Levison said, is continued introduction of the test to the payor community and increasing reimbursements for Corus CAD, which lists for $1,195.

In support of that, the company has begun to add to its managed care sales team, "so that we can go out and start to have those discussions with the payors and sign them up for contracts rather than negotiating on a case by case basis," he said.

The gene expression test, which was developed in house, consists of 23 genes and a set of algorithms to determine which patients may actually have CAD and need to be referred to a cardiologist and which ones don't or have mild cases of CAD and can be managed otherwise.

The value of the blood-based test, Levison said, is not as a diagnostic for determining who has CAD, but rather as an indicator of who doesn't. Corus CAD scores a patient from zero to 40, with a higher score corresponding to a greater probability that the patient has CAD.

A score of 15, for example, correlates to a 20 percent chance that a patient has CAD.

The test, Levison said, not only saves money to the healthcare system by decreasing unnecessary referrals to cardiologists but also reduces the number of wasteful referrals to catheterization laboratories.

"We can help [primary care physicians] determine which patients may be symptomatic for a very low risk of having significant disease and can be medically managed, versus who has to go on to cath labs, and that's really where the savings come from," Levison said.

CardioDx's efforts since Corus CAD was launched have been directed toward getting physicians to use the test, and Levison said he has been "very pleased" with the market penetration. To date, about 500 doctors have used the test and more than 12,000 Corus CAD tests have been run in the firm's CLIA laboratory in Palo Alto.

With between 15,000 and 18,000 cardiologists and more than 100,000 primary care physicians across the US, though, CardioDx is tapping into only a fraction of the market opportunity, he said. In rural areas where access to cardiologists may be limited, Corus CAD may have particular use, Levison noted.

BRIC Building & Version 2.0

As CardioDx embarks on increasing US penetration of the Corus CAD test, it also is in the early stages of preparing to launch the test internationally and is in discussions with potential partners, Levison said.

In particular, he noted, nations with newly advanced developing economies such as Brazil, Russia, India, and China — the so-called BRIC nations — could be an attractive market for CardioDx's tests.

"In the BRIC countries, we are looking at how we take this [there] because it really does provide tremendous advantages in developing countries," he said. "People have said that our tests could be used to … leapfrog over the infrastructure of imaging equipment that will probably not be installed in those emerging markets.

"We're probably not going to see the big capital equipment expenditures in those markets, so they're going to need to evaluate chest-pain patients, and we are a great solution because we require no capital equipment," he said.

CardioDx is in the process of updating the Corus CAD test, Levison added, and version 2.0 will aim to not only diagnose those who don't have CAD, but also broadly look at the causes of CAD within a patient, such as protein-based factors, as well as genetic reasons. He said the next-generation of Corus CAD is anticipated to launch in 12 to 15 months.

Afterward, the company will turn its attention to a version of the test for diabetics. A separate test for that population was needed, CardioDx discovered, during the course of a clinical study, called PREDICT, when company researchers found that gene expression levels of diabetic patients with coronary disease were different than that of non-diabetic patients with coronary disease.

From its PREDICT study, CardioDx amassed more than 1,000 blood samples from diabetic patients with coronary disease, and from that, it will develop its test for that population, Levison said.

The Corus CAD test has not been cleared by the US Food and Drug Administration, although it was designed under the assumption by CardioDx that it would, at some point, need to get approval by the agency. All signs suggest that FDA is moving toward stricter regulation of LDTs, such as the Corus CAD test, and when it decides how it wants to do so, CardioDx will determine what steps it will take, if any, for regulatory approval, Levison said.

CardioDx also is exploring the development of prognostic tests, which would tell patients and their physicians the extent of the patient's CAD. If a patient scored a 15 on the current Corus CAD test, and one year later scored a 25, "does that progression mean that bad things are likely on the way?" Levison asked.

"We don't know, we haven't done that study yet, but we're starting to look at some ways to tease out the predictive value of the test and the technology," he said.

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