NEW YORK (GenomeWeb News) – BG Medicine said today that revenues in the third quarter rose 258 percent year over year on the sale of it BGM Galectin-3 test.
Separately, the Waltham, Mass.-based firm also announced a commercialization strategy intended to accelerate adoption of its cardiovascular diagnostics tests.
BG's revenues for the three months ended Sept. 30 shot up to $641,000 compared to $179,000 a year ago as product revenues from the sale of the BGM Galectin-3 test increased seven-fold to $610,000 from $87,000. Service revenues narrowed to $31,000 from $92,000.
The firm's revenues missed the consensus Wall Street estimate of $820,000.
BG's loss widened to $6.8 million, or $.34 per share, from a net loss of $4.9 million, or $.25 per share, a year ago, missing the average analyst estimate of a net loss of $.33 per share, as expenses increased. The firm's R&D spending rose to $2.5 million from $1.9 million a year ago, while SG&A costs were up to $4.4 million from $3.1 million.
The R&D increase was related primarily to the company's CardioScore program, it said. In August BG Medicine withdrew its submission to the US Food and Drug Administration seeking 510(k) clearance for the test, saying it would not be able to respond in full to a request from FDA to confirm certain data from the company's validation study for the test. The company said today that it remains in discussions with the agency regarding the additional information.
The rise in SG&A costs in the quarter was primarily due to its commercialization of the BGM Galectin-3 test, as well as personnel-related costs and public company-related costs. BG Medicine went public in February 2011.
The firm had $17.6 million in cash and cash equivalents as of Sept. 30, it said.
BG also announced today a new plan aimed at accelerating its commercial operations. As part of the new strategy, BG Medicine "is transforming its current field force from an awareness- and education-focused organization into one with a sales mission and growth strategy," it said. Initially, the sales force will promote galectin-3 testing to hospitals with higher than average readmission rates.
Last month the Centers for Medicare and Medicaid Services implemented new guidelines with penalties aimed at reducing hospital readmissions, and according to BG Medicine heart failure patients with elevated levels of galectin-3 are two to three times more likely than other heart failure patients for hospital readmissions within 30 days of discharge.
BG Medicine said it also plans on opening a CLIA-certified laboratory in the first half of 2013 to make galectin-3 testing available to hospitals and other healthcare providers. In addition, it expects to launch the CardioScore test in Europe following CE Marking, which the company said it anticipates receiving in the first quarter of 2013.
The company is reorganizing its R&D operations, as well, to a more commercially focused role and away from its previous one of early-stage discovery, in order to support sales of BGM Galectin-3 and CardioScore. As a result, 11 positions in early discovery research have been eliminated.
The company will record a charge of $150,000 for the fourth quarter, and it said savings for 2013 from the downsizing are expected to be as much as $1.2 million.
Four new members were added to the company's management team as part of the commercial strategy. Bill Densel is CardioScore General Manager; Howard Rosen is vice president of US Sales and Marketing; Thomas Bendix Mortensen is VP of European Sales and Marketing; and Chuck Abdalian is CFO.
"The implementation of the aggressive new strategy announced today will be a critical driver in our ongoing transformation into a full-scale commercial organization," BG Medicine President and CEO Eric Bouvier said in a statement.