NEW YORK – Interpace Biosciences has experienced a busy year in both diagnostic development and biopharma services, including securing insurance coverage for multiple tests, a business acquisition, and a company rebranding to reflect the resulting expansion.
The Parsippany, New Jersey-based firm now aims to expand current relationships with multiple biopharmaceutical companies as it bolsters its service offerings for cancer therapeutics firms and, eventually, drug developers in other disease indications.
Interpace CEO Jack Stover explained that the firm began conversations with Cancer Genetics in late 2018 following its failed merger with Novellus. By acquiring Cancer Genetics' BioPharma business in July, Interpace plans to support cancer drug discovery and development plans of pharmaceutical and biotech firms.
Stover noted that Interpace wanted to change its name from "Interpace Diagnostics" to "Interpace Biosciences" in order to rebrand itself as it explores the pharmaceutical sector. The firm announced the name change in November alongside its Q3 earnings, and now Interpace Diagnostics and Interpace BioPharma Solutions will act as entities under the group's corporate umbrella.
"Interpace, on the diagnostic side, looks at early and precancerous situations, where we look at indeterminate nodules and determine the chance of progression and how it progresses," Stover said. "When you add the pharmaceutical sector to early stage cancer evaluation, it becomes a personalized medicine play at a granular level."
As part of the acquisition, Interpace closed on a $13 million convertible preferred stock investment by Ampersand Capital Partners in October. Stover noted that the firm used about $6 million of the funding to pay down a note due to Cancer Genetics in connection with the BioPharma acquisition.
While most of Interpace's diagnostic business involves customers — such as doctors and hospital groups — that demand a quick turnaround time for testing results, Stover explained that the firm's new biopharma customers are instead pharmaceutical and biotech companies seeking long-term partnerships. He noted that these types of customers are typically developing cancer drugs, working with companion diagnostic products, or looking for help with clinical trials.
"Much of what we do is tissue, whether liquid or solid, whether it's early stage or prognostic testing, which run on the same platforms," Stover explained. "But it will be different now since our commercial team will be dealing with biotech and pharma companies, working with them at both the clinical and research levels."
Interpace therefore expects to increase commercial capability on its biopharmaceutical side by 20 percent through the biopharma solutions business. Stover noted that Interpace already has relationships with several top biopharma companies, including Pfizer, AstraZeneca, and GlaxoSmithKline, and is currently involved in over 225 clinical trials.
"We are in the process of doubling the size of [Interpace Pharma Solutions] sales team, reorganizing how and where we do assays and expanding in several ways," Stover explained.
Interpace also anticipates expanding its international focus. Highlighting the recent worldwide research services agreement with Beijing-based GeneCast, Stover noted that Interpace sees opportunities to establish relationships with companies in the rest of Asia and Western Europe.
While the firm will spend most of 2020 focused on oncology, Interpace also aims to explore tackling conditions outside cancer in the long term, including rheumatoid arthritis, gastrointestinal disease, central nervous system conditions, as well as women's health.
"With the acquisition, the diagnostic portion didn't tell our entire story," Stover explained. "The name change also helps us get out of just being a cancer-based company."
Nevertheless, the diagnostics business will continue to expand, as Interpace plans to add sales representatives through the country through 2020, especially in Chicago and Minneapolis, to sell its ThyGeNext and ThyraMir assays to test questionable thyroid nodules for potential evidence of thyroid cancer.
Interpace also signed several coverage contracts for these tests with US private insurers this year, including Blue Cross Blue Shield of Michigan and Intermountain Health. In addition to coverage agreements from previous years, Interpace has secured coverage for about 16 million patients across the US in 2019. Stover said that Medicare now covers all of Interpace's commercialized tests and that the firm's single largest customer is LabCorp.
Most recently, Medicare Administrative Contractor Novitas this week issued a new draft local coverage determination (LCD) for the ThyGeNext assay.
Stover explained that the coverage decision includes a $2,400 reimbursement increase from $500 to about $2,900, reflecting the panel's biomarker expansion for thyroid cancer detection.
"The LCD code is effectively a CPT code in this case, [since] what this says is that it's a proprietary molecular test, and it's specifically stated that this is the price approved," Stover elaborated. "Having an organization as technically confident as Novitas being able to step in and draw the conclusion after a lengthy process is a big step for us."
While the increase is solely for Medicare reimbursement, Stover argued that impact beyond Medicare is important, as the firm can potentially demonstrate the assay's use to private payors who may be hesitant to cover the assay for thyroid cancer detection.
Interpace also filed an 8K with the US Securities and Exchange Commission on Tuesday afternoon regarding a potential reverse stock split. Noting that the 8K was completely separate from the LCD announcement, Stover explained that the firm will need to perform a reverse stock split by around April 2020 in order to maintain its compliance with the Nasdaq minimum stock price.