Originally published Feb. 21.
After repositioning its business last year to develop cancer diagnostics, MDxHealth's revenues netted from the sale of products and services were boosted by payments from several large pharmaceutical companies with which it has inked biomarker licensing and companion diagnostics deals.
This week, MDxHealth reported 2010 revenues of €2.5 million ($3.4 million), which was flat compared with 2009 revenues. However, according to the company's earnings statement, MDxHealth's product and service revenues nearly doubled – from €1 million in 2009 to €2 million in 2010 – due to up-front payments received from Pfizer, GSK Biologicals, Exact Sciences, Takara, Predictive Biosciences, and "volume growth in clinical service testing provided to pharmaceutical companies" that are using its proprietary biomarkers.
In addition, MDxHealth reported reduced revenues from its grant services to €568,000 in 2010 from €1.5 million in 2009. "Grant revenue decreased in 2010 as the company's new strategy focuses more on end-product development rather than on subsidized early-stage research," MDxHealth explained in a statement.
In 2010, MDxHealth reduced it operating costs by 38 percent, or by €6.6 million. This reduction was due to the company centralizing all European lab activities in Belgium, cutting non-core personnel, and discontinuing large trials for oncology screening applications.
As of Dec. 31, 2010, MDxHealth had €10.6 million in cash and cash equivalents, compared to €18 million in 2009.
Over the 12-month period, MDxHealth entered into companion diagnostics agreements with GSK Biologicals to develop an immunotherapeutic, Merck Serono for a breast cancer treatment, and Pfizer to develop a PARP inhibitor in breast and ovarian cancer (PGx Reporter 02/02/11). MDxHealth is developing companion diagnostics on its proprietary methylation-based platform.
Additionally, in 2010, MDxHealth outlicensed its biomarkers to companies to develop diagnostic and prognostic tests. For example, Exact Sciences is applying MDxHealth's biomarkers in its colorectal screening test, as is Predictive Biosciences for a bladder cancer test. "Both companies have announced the inclusion of MDxHealth's biomarkers in their assays," MDxHealth said in a statement.
MDxHealth stands to receive royalties upon the commercial launch of these tests in the next two to three years. Additionally, the company said it plans to sell all internally developed clinical diagnostics "directly to physicians in the US using a dedicated sales force," through its own CLIA laboratory.
According to the MDxHealth's website, it is developing diagnostics for prostate, colon, and lung cancer. In these disease areas, the company is looking to develop three types of tests: ConfirmMDx to gauge the presence of absence of cancer; InformMDx to assess the aggressiveness of tumors; and PredictMDx to inform the course of treatment or predict whether a patient will respond to a drug.
MDxHealth's is developing ConfirmMDx and InformMDx tests in prostate and lung cancer, which are currently in the biomarker verification stage. In colon cancer, the company's InformMDx test is undergoing feasibility testing.
In 2011, MDxHealth has a lot of work to do in terms of setting up its US commercial infrastructure and advancing its diagnostics through the pipeline. By the second quarter of this year, it hopes to complete the first validation study for its prostate cancer test; start recruiting its US sales force; and establish its own CLIA-certified lab by the fourth quarter.
As a result of these activities, MDxHealth is projecting an increase in expenses compared to 2010, but said it plans to keep operating costs level year-over-year. Near-term revenues, according to the company, will "predominantly come from [its] pharmacodiagnsotics activities." MDxHealth is expecting to see commercial revenues from its prostate cancer product in 2012.