Osmetech last week closed a private stock placement worth approximately $20 million, the bulk of which will be funneled into its molecular diagnostics business, including sales and product development, according to a company official.
Bruce Huebner, president of Osmetech's molecular diagnostics unit, said this week that the British life sciences company concluded the placement on July 11, selling 71 million of new ordinary shares to institutional investors in the UK for £12.5 million ($20 million). Osmetech's stock trades on the London Stock Exchange.
Osmetech will now have more working capital to fund its molecular diagnostics business as it looks to commercialize its array-based eSensor detection system and invests in product development, according to Huebner.
"The funding really was to expand operations in our molecular area and to continue the development of the new products that we are working on in molecular [diagnostics]," he said.
The US Food and Drug Administration cleared the company's eSensor 4800 DNA Detection System and an accompanying assay for cystic fibrosis carrier detection last March, making Osmetech the third array firm, after Affymetrix and BioArray Solutions, to have a cleared array-based diagnostic on the market (see BAN 3/14/2006).
"Obviously one product is not enough to fund the molecular business."
Huebner said that the firm will invest the new capital in its commercial team and in product development. He mentioned that Osmetech placed its first eSensor system with a customer last week and there are several other deals in the pipeline, though he declined to name the initial customer.
"We are really investing in the commercial side at this point. We have a head of commercial operations on board, I've got two sales reps in the field, and we've put tech services into place," he said.
"I think this is the typical progress after getting an FDA-cleared product, to get the first production batches on the shelf, get everything fine-tuned with the training programs and get out there with your first customer," Huebner explained. "We are now in the process of getting live; [we have] buying customers in place."
Huebner also said that Osmetech Molecular Diagnostics, which is based in Pasadena, Calif., will focus on selling eSensor and the CF assay in the US for the rest of the year, and an entry into the European market is now planned for 2007.
He declined to name the investors involved in the private placement but said that several already held large percentages of Osmetech's stock. According to the company's 2005 annual report, Gartmore Investment Management and Schroder Investment Management hold 17 percent and 14 percent of the company's shares, respectively.
As part of Osmetech's drive to build its molecular diagnostics business, the firm will be rolling out some new products.
At the top of Osmetech's agenda for the rest of the year are several non-array-related products, like its OptiTube, a "patented plastic designed to work in Roche Light Cyclers" due out in August, and a Factor V/ Factor II Prothrombin ASR, which is scheduled for release in September. OptiGene, a "random access thermocycler," should be out later this year, Huebner said.
In terms of new assays for the eSensor system, Huebner said that the company has a cytochrome P450 assay flagged for the future. The CYP450 test is a legacy product from Motorola's Clinical Micro Sensors subsidiary. Osmetech acquired CMS from Motorola in August 2005 (see BAN 8/10/2005).
"Obviously one product is not enough to fund the molecular [diagnostics] business," Huebner said. "We are working on getting into the pharmacogenomics side of the business for CYP450 markers â€" that looks like a sizeable market," he added.
When it becomes available, Osmetech's CYP450 test will directly compete with Roche's CYP450 AmpliChip. In March, Huebner said that Osmetech's assay will have "cost-competitive advantages" over AmpliChip and that it would be "less expensive" and a "cost-effective alternative" to Roche's test. However, he declined to discuss actual pricing at the time.
BioArray News' sister publication Pharmacogenomics Reporter reported last December that LabCorp charges $1,360 for a typical AmpliChip test per patient sample.
- Justin Petrone ([email protected])