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BG Medicine Reports 47 Percent Q4 Revenue Drop

By a GenomeWeb Staff Reporter

NEW YORK (GenomeWeb News) – Reporting for the first time as a public company, BG Medicine reported after the close of the market on Wednesday that its fourth-quarter revenues fell 47 percent year over year, which it attributed to a reduction in the number of projects completed under its service agreements.

For the three months ended Dec. 31, 2010, the Waltham, Mass.-based biomarker test developer said that revenues receded to $199,000 from $373,000. The primary source of revenues during the quarter was from its Phase II High Risk Plaque Initiative, started a few years ago to develop diagnostic biomarkers that may be predictive of heart attacks caused by myocardial infarction or by the rupture of atherosclerotic plaque.

During the fourth quarter, BG Medicine reduced its R&D spending 53 percent to $943,000 from $2 million the previous year as a result of decreased activity and lower personnel costs associated with its internal biomarker discovery and development work, primarily its galectin-3 program.

Its SG&A costs dropped 5 percent to $1.9 million from $2 million.

BG's net loss for the quarter was $3.3 million, or $1.18 per share, down from $4.2 million, or $1.52 per share.

In November, the firm received clearance from the US Food and Drug Administration for its lead product, the galectin-3 test for heart failure, and in January, its partner Laboratory Corporation of America began marketing the test in the US.

Pieter Muntendam, president and CEO of BG Medicine, said in a statement that the company has begun its own sales and marketing efforts in support of the launch. At the same time, an automated version of the test is being developed by its partners, Abbott Laboratories, Alere, Siemens, and BioMérieux.

In a conference call following the release of its earnings, Muntendam added that the international launch of the automated version of the galectin-3 test is expected later this year, with the US launch anticipated in 2012.

BG Medicine went public in February, raising $35.1 million in net proceeds. Michael Rogers, the firm's CFO, said on Wednesday in a statement that the funds "will provide us with the capital to invest in the launch of the galectin-3 test in 2011 and 2012, as well as to continue the development of our pipeline products."

The company also is developing a test called AMIPredict for identifying people at risk for a near-term heart attack. Muntendam said on the call that BG Medicine is currently in the validation phase of choosing both biomarkers and algorithms for the test.
He said that the process is expected to be completed in the second or third quarter of this year, "and if successful, we expect to file a 510(k) application with the FDA shortly thereafter."

Muntandem added that his company and AstraZeneca are evaluating the use of the galectin-3 test as a companion diagnostic to predict the effectiveness of the drug manufacturer's Crestor (rosuvastatin) to prevent heart failure. An earlier study had suggested the statin was ineffective as a drug for the general galectin-3 population, but a more recent study indicated that a population with low levels of the protein benefitted from Crestor.

BG Medicine and AstraZeneca are "contemplating a joint approach to regulatory authorities," in particular the FDA, in order to seek approval for Crestor as a therapeutic for that population, Muntendam said.

"It would be a nice and one of the first stories of a drug [with a failed indication] that could be rescued using a biomarker to identify a responder group," he said.

For full-year 2010, BG Medicine posted revenues of $819,000, a 10-fold decrease from $8.5 million in 2009. The company attributed the decline to the completion of Phase I of its HRP Initiative in 2009 and the continued de-emphasis of its sponsored research and service business. Revenues for 2010 were mostly derived from Phase II of the HRP Initiative.

Its R&D spending fell 24 percent to $6.5 million from $8.5 million, while its SG&A costs rose to $8.1 million from $7.5 million.

BG's net loss for 2010 was $17.2 million, or $6.12 per share, compared to a loss of $16.1 million, or $5.84 per share, a year ago.

As of Dec. 31, BG Medicine had $2.4 million in cash and cash equivalents.

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