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Targeting Mid-Year LungExpress Dx Launch, Precision Readies Sales Force, Focuses on Reimbursement

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Precision Therapeutics plans to launch Med BioGene's LungExpress Dx molecular diagnostic by mid-year, the companies announced this week.

Last year, Med BioGene and Precision amended an earlier agreement to commercialize LungExpress Dx, a gene expression test that identifies which early-stage non-small cell lung cancer patients, after surgical resection of their tumor, are at heightened risk of death and which are likely to have good outcomes. Under the 2011 agreement, Precision has paid licensing and research fees of $2.3 million to Med BioGene. In addition, Med BioGene was entitled to receive up to $1 million in milestone payments.

The milestone payments portion of the contract was amended last year so Precision will now pay $500,000 to Med BioGene after LungExpress Dx is commercially launched, and another $500,000 after the test yields net revenues of $5 million. Additionally, Med BioGene is also entitled to a percentage of future net revenues of the test as royalties from Precision.

Aiming for a mid-year launch, a Precision spokesperson told PGx Reporter that the company is planning to market LungExprss Dx with a sales team of 30 representatives who will target oncologists, surgeons, and pathologists. The company will run the test out of its CLIA-certified lab.

Planning for the launch is underway now that Precision has completed clinical studies to validate the use of LungExpress Dx with the molecular fixative RNAlater, which preserves RNA in fresh tissue and cell samples. To conduct the studies, Precision prospectively collected patient samples from a consortium of medical centers in the US.

RNAlater eliminates the need for costly flash-freezing of specimens and provides an alternative to preserving tissue in formalin, which can degrade nucleic acids. "The use of LungExpress Dx with RNAlater will allow pathologists to avoid the logistics involved with using flash-frozen tumor specimens and, instead, to handle and ship specimens at room temperature, thereby simplifying the process significantly," Erinn Broshko, executive chairman of Med BioGene, said in a statement.

LungExpress Dx is also validated for use with frozen tumor tissue.

In the US, samples are commonly preserved in paraffin. Molecular diagnostic firm Agendia, for example, significantly grew the sales of its MammaPrint breast cancer recurrence test once it validated its test to analyze both fresh and formalin-fixed, paraffin-embedded tissue samples (PGx Reporter 4/25/2012).

Anticipating commercialization of the test, Precision has formed an advisory board that includes experts in lung cancer research and treatment from the US, Canada, France, and Italy. The company is currently focusing on growing the reimbursement prospects for LungExpress Dx.

"Reimbursement planning is firmly underway and we plan to actively collaborate with Medicare and other payers," the Precision spokesperson said. "Both clinical utility and cost-effectiveness studies are either planned or underway already."

Shortly after Med BioGene and Precision amended their commercialization agreement for LungExpress Dx last year, Med BioGene reported it had incurred a loss of more than $300,000 for the nine months ended Sept. 30, 2012, compared to a net income of $1.8 million for the year-ago period.

As of that date, the company had cash and equivalents totaling $458,964.

Broshko noted at the time that Med BioGene had sufficient cash to continue operations until the first quarter of 2014. However, if Precision launches LungExpress Dx by mid-year as planned, Med BioGene will be slated to receive $500,000 in milestone payments, which will help take the company to the third quarter of 2015.

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