Celera this week reported a 284-percent surge in third-quarter revenue, and company officials expect the firm’s growing cardiovascular program to add to Celera’s profitability going forward.
“Our recent acquisitions of Berkeley HeartLab and Atria Genetics continued to contribute both financially and strategically this quarter, while sales of our alliance with Abbott grew,” Celera President Kathy Ordoñez said during an earnings call with investors last week. “We made substantial progress in our cardiovascular program, particularly around the development of our KIF6 assay, which [is] expected to contribute to the future of our business.”
The company brought in revenues of $45.8 million for the three months ended Sept. 27, compared with revenues of $16.1 million for the same period of 2007.
When it comes to growing revenues, Celera has a two-pronged strategy to penetrate the cardiovascular space. According to Ordoñez, the company plans to expand physician and patient adoption of BHL cardiovascular disease tests and expand the subsidiary’s menu of new tests.
BHL, which Celera acquired last year for $195 million, provides physicians and patients with a comprehensive personalized cardiovascular risk-management program. It annually receives referrals from more than 4,100 physicians, processes samples from over 150,000 patients, and performs over 1.6 million tests.
With the acquisition of BHL, Celera gained access to a portfolio of CLIA-certified tests and disease-management services focused on the secondary prevention market in cardiovascular disease.
“During the quarter, we continued to add resource in the field at BHL, and expanded our presence and focus on selected market areas as we seek to identify more physicians and patients to participate in the Berkeley program,” Ordoñez told investors.
Additionally, Celera opened a new For My Heart health support center in Englewood, NJ, bringing the number of such centers to 18. “We are now seeing an uptick in sample volume in the laboratory as a result of these efforts,” Ordoñez said.
KIF6: Lead CV Test
Advancing Celera’s aim to add new tests to the heart-disease space, the company has seen growth in the adoption of an assay that detects the KIF6 gene variant, which according to published studies confers up to 55-percent increased risk for coronary events. Physicians can use the KIF6 test to identify the increased risk for congestive heart failure and begin treating their patients with statins.
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Celera expects to launch the KIF6 test next summer and “broadly expand the use of the KIF6 testing service beyond BHL’s current reach in the secondary care cardiovascular market.” |
Celera began offering the KIF6 assay in March to a limited group of physicians and patients after BHL finished validating the laboratory-developed test.
“Uptake of the KIF6 assay to date has been strong, and thus far appears to be outperforming previously successful trial markets conducted by BHL for Apo E, NT-proBNP, and Lp-PLA2 tests at the same stage of trial marketing,” Ordoñez said. “The test market is expected to refine pricing and positioning for the KIF6 assay, and also determine how the test will be reimbursed by major payers.”
By year end, the firm plans to roll out a direct-to-physician program to market the KIF6 assay to selected markets followed by a broad commercial launch next year. Celera has also met with US Food and Drug Administration officials to discuss launching clinical studies as a way to win regulatory clearance for the KIF6 test in the US. test in the US.
The trial market for KIF6 is slated for completion by the end of the current quarter. Celera expects to launch the test in a buccal swab format by next summer in order to “broadly expand the use of the KIF6testing service beyond BHL’s current reach in the secondary care cardiovascular market,” Ordoñez said.
HLA, PGx Collaborations
Another aspect of Celera’s business that helped grow its revenues was a 44-percent increase in IVD products sales, including its human leukocyte antigen products; HIV, HCV, and HBV RealTime viral load assays on Abbott’s m2000 platform; and thrombosis ASRs.
Celera earlier this year gained access to a line of HLA-antigen tests after acquiring Atria Genetics for $33 million.
The company has been engaged in a pharmacogenomics R&D alliance with Abbott since 2002. As part of this alliance, Ordoñez noted that assays for chlamydia and gonorrhea on Abbott’s m2000 system are under review at the FDA. For these tests, which are already marketed in Europe, Celera hopes to gain FDA clearance and begin marketing next summer.
Also part of its alliance with Abbott, Celera has developed an HPV assay that it hopes to launch in Europe in the first half of next year. This test, which also runs on the m2000 system, and detects type 16 and 18 and other high-risk types of HPV, would enter the competitive HPV-diagnostics market currently dominated by Qiagen and Third Wave.
The test “should be medically equivalent” to the Qiagen and Third Wave tests, said Celera officials, but they said they believe that their test will have an advantage by running on the m2000 system, which serves a broad menu of other STD and viral assays. “We think this can be an important new assay for Abbott and Celera,” said Ordoñez.
Finally, Celera “continues to make progress in previously announced pharmacogenomic collaborations with Ipsen and Merck” to develop an undisclosed number of cancer tests, Ordoñez said. She did not elaborate.
In April, Celera licensed 10 cancer targets to Merck in order to develop RNAi-based treatments. The two companies are also trying to identify and validate genetic targets for Alzheimer’s disease.
Financials
Of the $45.8 million in total revenues that Celera reported for the quarter — its first as a standalone company after splitting from parent company Applera and sister firm Applied Biosystems in July — $30.1 million came from its lab services, which consists of sales made by BHL. Product revenues for the quarter increased to $10.5 million from $4.7 million in the comparable quarter a year ago.
Celera said the increase was due to sales of Atria HLA products and a higher equalization payment from Abbott under their diagnostics alliance.
Alameda, Calif.-based Celera posted a net loss of $7 million for the quarter compared with a $700,000 profit in the year-ago period.
Celera’s third-quarter SG&A costs tripled to $25.2 million from $8.1 million, while R&D expenses dropped around 25 percent to $8 million from $10.7 million.
Ordoñez said that the increase in SG&A spending was in part due to transition costs associated with its split from Applera and ABI.
Celera said it expects to report revenues of between $89 million and $93 million for the second half of calendar 2008. The firm’s fiscal year has traditionally run from July 1 to June 30, but since becoming an independent company, Celera has switched its fiscal year to the calendar year.