By Turna Ray
Clinical Data is looking to move entirely away from its genetic-testing and biomarker-development business and become a pure-play drug developer.
In documents filed with the US Securities and Exchange Commission this week, Clinical Data, which at one point aimed to become a personalized medicine company, said that it is now "considering the sale of its genetic testing and biomarker development business."
As a result, the firm is mulling the sale of all assets associated with its Familion brand of genetic tests for cardiac syndromes and its CLIA laboratory in New Haven, Conn. The Familion tests are sold by the company's PGxHealth division, which it gained through its acquisition of Epidauros Biotechnologie in December 2008.
The decision to sell the PGxHealth assets follows the launch earlier this month of three new Familion products: a test to gauge electrical heart disease in autopsy-negative cases of sudden unexplained death and sudden infant death syndrome; a test to diagnose left ventricular noncompaction cardiomyopathy; and a test for long deletions and duplications in long QT syndrome. The company further enhanced its existing tests for LQTS, catecholaminergic polymorphic ventricular tachycardia, and dilated cardiomyopathy.
In December last year the company announced a research collaboration with Deutsches Herzzentrum to evaluate genetic markers linked to patient response to the anti-platelet drug Plavix. Also last year, Clinical Data announced a collaboration with Dana-Farber Cancer Institute to validate the use of genetic variants in Fc gamma receptors linked to Herceptin response.
It is unclear if the company gained any biomarker assets from these collaborations.
Clinical Data said that in addition to its biomarkers, the sale would include "all of its tangible personal property, intellectual property rights, accounts receivable, and contractual rights owned or used by the company in connection with the [laboratory] business," as well as leases and subleases to facilities and equipment for its CLIA lab. Accordingly, the company also noted that it has not entered into any contractual agreement for the sale of these assets.
The plan to sell the genetic business is not new, according to a Clinical Data spokesperson. "We have said publicly for a long time now that as a therapeutics company, the genetic testing business was not core to this mission," the spokesperson told PGx Reporter this week.
The spokesperson did not elaborate, but emphasized that the company has not "announced any deal" in this regard.
Away from PGx, Toward Rx
Although Clinical Data sold its Cogenics genomic services unit last year to Beckman Coulter, the company said at the time that the sale would not impact its pharmacogenomics efforts.
The company's move away from PGx and toward the development of therapeutics undifferentiated by genetics may have been triggered by the failure to advance its lead drug vilazodone as a genetically differentiated personalized medicine product in depression.
In February, the company said that while a predictive genomic marker that it was investigating in a Phase III trial did not pan out, the drug met its overall efficacy and safety endpoints in late-stage trials for major depressive disorder with statistical significance (PGx Reporter 02/10/10).
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Vilazodone, originally discovered by Merck, went to GlaxoSmithKline in 2001 through a license agreement, after Merck abandoned the drug due to poor efficacy in Phase II trials. GSK gave up on the drug in April 2003, and Merck partnered with PGx firm Genaissance in another attempt to get it to market. Clinical Data acquired Genaissance in 2005.
Clinical Data at one point had said that it would continue to evaluate other biomarker candidates to guide vilazodone after the first effort failed. However, the company has abandoned that plan.
Earlier this year the company submitted vilazodone for FDA approval without a gene marker. Simultaneously, the company is also conducting Phase III studies of a coronary vasodilator, stedivaze, which it picked up in its acquisition of Adenosine Therapeutics in 2008.
Helping Clinical Data on its path to becoming a full-fledged drug firm is its 2008 acquisition of Avalon Pharmaceuticals. Through that acquisition, Clinical Data gained a drug and biomarker discovery platform focused on oncology.
In reporting its financial results for the three months ended Sept. 30, the company noted several highlights in line with its stated goal to move away from genetics and become solely a pharma company.
For example, during the quarter, the company obtained Orphan Drug Designation from the US Food and Drug Administration for PRX-8066, a selective serotonin 2B (5-HT2B) receptor antagonist in Phase II development for the treatment of pulmonary arterial hypertension.
Clinical Data also received two grants for $500,000 under the Internal Revenue Service's Qualifying Therapeutic Discovery Project for research and development efforts related to vilazodone and stedivaze.
FDA is slated to issue its decision on Clinical Data's NDA for vilazodone on Jan. 22, 2011.
"Our financial performance this past quarter reflects our ongoing discipline in marshalling and focusing our resources on our late-stage assets by advancing commercial preparations for vilazodone and continuing to enroll patients in our Phase III, ASPECT 1 trial for stedivaze," Clinical Data CEO Drew Fromkin said in a statement. "As always, we are opportunistic in our approach to building and leveraging our therapeutic pipeline assets, while maintaining sufficient capital to meet our corporate goals and build shareholder value."
While Clinical Data was strapped for cash before selling its Cogenics unit to Beckman Coulter last year, its financial situation has improved since then, aided by the sale of the genomics services unit, other restructuring initiatives, and money-raising efforts.
For the three months ended Sept. 30, the company's revenues increased 17 percent to $4.3 million from $3.7 million in the year-ago period. Familion test sales increased 17 percent over the prior-year quarter.
During this period, the company's revenues were boosted by a one-time, $2 million milestone payment from Santen Pharmaceuticals for the exclusive license to develop ATL313, a topical treatment for glaucoma.
Quarterly research and development expenses increased 9 percent to $9.7 million from $8.9 million in the prior-year quarter.
Sales and marketing expenses decreased 4 percent to $1.3 million from $2 million for the corresponding quarter in 2009. According to this company, this decrease in sales and marketing expenses was due to a cut in its sales force year-over-year.
Additionally, for the three months, Clinical Data reported general and administrative expenses of $5.9 million, an increase of 11 percent over the same period in 2009.
The company also announced this week that it has filed a shelf registration with the SEC to sell up to $200 million of its common stock, preferred stock, and/or debt securities from time to time
As of Sept. 30, Clinical Data held cash and cash equivalents of $47 million.
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