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GeneCentric Employing Unique Model to Bridge MDx Research, Commercialization

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NEW YORK (GenomeWeb) – With intellectual property in-licensed from the University of North Carolina and a pipeline of tests planned for various cancer indications, startup GeneCentric Diagnostics aims to provide a bridge between researchers and commercialization partners in the molecular diagnostics field.

Speaking with GenomeWeb last week on the sidelines of the JP Morgan Healthcare Conference in San Francisco, GeneCentric President and CEO Myla Lai-Goldman explained the unique business model the firm is employing.

"All that GeneCentric does is in-license IP and develop evidence that it works and that it changes the course of care for patients," she said. "We are an evidence development company. We commercialize through partnerships."

Essentially, GeneCentric acts as a kind of a tech transfer business and CRO, but there is a crucial difference. "We resemble a CRO, but we own the IP," she said. "We're building the value of the IP. We're just not the one commercializing it."

The firm was founded in 2011 by Lai-Goldman, UNC researchers Neil Hayes and Charles Perou, and investment firm Hatteras Venture Partners, for which Lai-Goldman serves as a venture partner, helping them review opportunities in the diagnostics market. Lai-Goldman is a former CMO and CSO of Laboratory Corporation of America, which is GeneCentric's first partner.

LabCorp offers a laboratory-developed test called HistoPlus: Lung Cancer, which can distinguish between adenocarcinoma and squamous cell carcinoma. The genetic signature underlying that test was based on research conducted by Perou and licensed as the so-called Lung Subtype platform to GeneCentric, which sublicensed it to LabCorp.

A study describing the development and validation of the 57-gene, RT-qPCR-based assay was published in May 2013 in the Journal of Molecular Diagnostics.

The deal structure with LabCorp provides a glimpse of how GeneCentric intends to handle such partnerships going forward. LabCorp's rights only extend to the LDT; GeneCentric has retained the kit rights, which it may choose to license to a diagnostics test developer in the future.

"Having [LabCorp] as a CLIA lab partner for this IP gives us an early ability to develop knowledge about the test, more data, and its utility, which is so necessary with diagnostics in the never-ending effort to get reimbursed," said Lai-Goldman.

"We can go to established CLIA labs, like LabCorp, or established kit developers … and let them do what they have infrastructure to do so that we can spend all the money we raised on evidence, on studies that demonstrate utility of these tests," she added.

"We have a philosophy that the system really can't afford to spend a hundred million dollars to develop each new test, and reimbursement doesn't really make that a very feasible business model," she said. "Our model is much more capital-conserving, because we're not building the CLIA lab. With our model, we believe we can develop three to five tests for that same amount of money, which is de-risked for investors, but also produces more tests for patients."

Though the LabCorp test is an RT-qPCR assay, the gene signature is platform-independent, "as long as you're measuring gene expression," said Lai-Goldman. And, she noted, "That's just the first version of our test. We are now involved in a very large study on adenocarcinomas that will subdivide those into three separate subsets … each of which behave quite differently and are different diseases, even though today they're all called adenocarcinoma.

"The way I like to describe it is it's almost like an eye chart," she explained. "We can all read the top letters, but we really need to read the tiny letters at the bottom, and so our efforts are to define the underlying biology of disease, and that's what our technology does."

The company is currently conducting a retrospective study of 500 lung cancer patients that it expects to complete in the third quarter of this year. After that, it anticipates working with partners to produce an LDT but also to conduct additional studies that would support the submission of a kit to the US Food and Drug Administration.

Beyond lung cancer, GeneCentric has also in-licensed from UNC a second platform technology called the Hypoxia Signature, which has the potential to identify patients that respond to anti-angiogenesis therapies. Lai-Goldman said the firm is still evaluating data on the signature and is considering the next steps for it in breast cancer. "We're also including an evaluation of the hypoxia signature in our 2015 studies in lung cancer," she added. 

GeneCentric also is conducting work on assays for head and neck cancer. And, Lai-Goldman said, the firm has plans to seek technologies developed outside of UNC.

"To date, we just in-licensed from UNC, because we wanted to test the model and we have to convince investors the model works," she said. "But another beauty of the system is that we have no restrictions on who we in-license from, and we could in-license from academic centers and be opportunistic, or we could pick up other technologies that others have tried to develop but have run out of money. The commonality is that the team understands how to develop studies, how to execute studies, and manage the regulatory and reimbursement side."

That team includes VP of Clinical Development Hawazin Faruki and VP of Business Development Christy Ferguson, both of whom held management positions at LabCorp while Lai-Goldman was there.

In addition to LDT and kit development partnerships, GeneCentric sees an opportunity in companion diagnostics, though it anticipates such efforts would be facilitated through its partners. Having a partner like LabCorp, for example, "brings confidence to any potential pharma partner," said Lai-Goldman.

The firm said last July that it had raised $5.25 million in a Series A round of funding, with both Hatteras Venture Partners and LabCorp providing funding. Lai-Goldman told GenomeWeb that the company has begun discussions for a $20 million Series B round of financing, which it hopes to complete by the third quarter of this year, and that it expects to bring in new investors.

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