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Agendia Planning to File IPO in 2011

By Tony Fong

SAN FRANCISCO (GenomeWeb News) – Dutch molecular diagnostics firm Agendia plans on going public some time this year, a company official said.

At the JP Morgan Healthcare Conference in San Francisco this week, Bernhard Sixt, Agendia's president and CEO, told GenomeWeb Daily News that the company is planning an initial public offering this year, though a specific timeline and exchange has not yet been decided.

Proceeds from the offering, he said, will be used to ramp up commercialization of its MammaPrint and TargetPrint tests and to clinically validate its BluePrint and TheraPrint tests.

At the end of last year, Agendia closed its sixth financing round — Sixt declined to say how much was raised — but as the company proceeds to expand its operations, it decided that in order to do so, it would need more money.

"Because we are a private company, we realized what we need now are significant funds because commercialization is not done with $10 million, $20 million," he said. "It's done with much more significant amounts, and we realized by trying to raise a private round that there is only one market which [can yield] this amount of money we need, and that's the public market."

While the IPO market's reception to molecular diagnostic firms remain questionable, Sixt said that Agendia does not believe that its fortunes will hinge on what the market will bear for MDx firms, in general, but will rise or fall because of the quality of its product portfolio and its business strategy.

Agendia is "a very specific case" that has "very often been doing things very anti-cyclicly … and also I believe that the markets are extremely receptive" to Agendia's story, he said, noting that MammaPrint remains the only breast cancer recurrence test to receive clearance from the US Food and Drug Administration as an in vitro diagnostic multivariate index assay.

"We are included in international guidelines, proving the clinical utility; we have reimbursement; and now we need money to execute. And people are very receptive to risk-reduced molecular diagnostic companies" such as Agendia, Sixt said.

MammaPrint, a gene expression-based test for breast cancer recurrence, was cleared by the FDA in 2007, and two years later, the test gained reimbursement status from the Centers for Medicare and Medicaid Services. In total, about 22 insurers reimburse MammaPrint and TargetPrint, which determines ER, PR, and HER2 levels in breast cancer tumor biopsies. TargetPrint, said Sixt, is FDA-exempt because it has cross-validation with other FDA-approved tests.

While both tests have been on the market for a number of years, Sixt called it efforts so far "proof of commercialization," meaning that they were offered only on a small scale.
After reviewing the market and its reception to its test during this stage, Agendia decided "it's now time to fully execute" its commercialization plan, Sixt said.

While commercialization efforts would be initially focused on MammaPrint and TargetPrint, Agendia also is seeking to advance two other tests directed at breast cancer: BluePrint, which detects for the function of certain receptors; and TheraPrint, comprised of about 50 genes which may be associated with drug efficacy. The two assays are available now for research-use-only purposes and Agendia is working to clinically validate them, though it "will take some while" to do so for TheraPrint, Sixt said. Right now there is no correlation between the genes comprising the test and efficacy of any drug.

Agendia's plan for a public offering comes amid a growth spurt for the company. Sixt declined to disclose any sales figures but said that "we have quite a healthy uptake." In order to serve the entire breast cancer population, though, "we still have to go some way. It's not that we are where we want to be but we have a very promising start."

In August, the company expanded its laboratory capabilities in the US by moving into a 15,000-square-foot facility in Irvine, Calif., from an 8,000-square-foot space in Huntington Beach, Calif. It now employs about 50 people in the US, comprising "the better part of Agendia."

Agendia maintains a 13,000-square-foot facility in Amsterdam for which Sixt said it is currently seeking FDA approval to manufacture its tests as a "backup plant because we don't want to have all our eggs in one basket." Last year, Agendia voluntarily recalled about 100 test results coming from its Huntington site after problems with reagents from an outside vendor resulted in false positives.

With the new products under development, Sixt added, Agendia hopes to move beyond tests that can provide "yes/no" responses to whether a chemotherapy, in the case of MammaPrint, or a hormonal therapy, in the case of TheraPrint, may work. Looking forward, the company is hoping to develop tests that will determine which specific therapies may work best for a specific patient.

For example, he said, the company is participating in a European Union initiative that may yield such precise response profiles to therapies such as tamoxifen, Xeloda (capecitabine), Taxotere (doxetacel), and Herceptin (trastuzumab).

"So we take it step by step: First, who to treat … then we go to specifics: which hormonal therapy and which chemotherapy for which specific subgroup," Sixt said.

In addition, he said that the FDA's plan to regulate the laboratory-developed test market could help Agendia because claims being made by companies marketing such tests may not stand up to FDA scrutiny, "and our ability to compete would be obviously increased when we are looking at a level playing field." He added that Agendia has been waiting for FDA to take such steps for a number of years.

Now that Agendia has established a breast cancer franchise, Sixt said it is moving into colon cancer. It is planning an FDA submission this year for its ColoPrint test for stage II and III colon cancer prognosis and prediction, but Sixt did not elaborate.

Agendia has also deployed its gene expression technology outside of oncology, although Sixt said that that is not a primary focus for the company. He added that Agendia is considering other kinds of technology "in order to serve our core market in cancer."

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