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Clinical Data Says PGx Business Boosts Q1 Revenue, Buys Adenosine Rx for Up to $60M

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Clinical Data this week announced that triple-digit growth in its pharmacogenomics unit contributed to a 39-percent increase in first-quarter revenues.
 
The news comes one week after the company announced it had acquired Adenosine Therapeutics for up to $60 million in an effort to expand its pipeline of potential therapeutic/diagnostic combination products.
 
Clinical Data's total revenue for the quarter ended June 30 jumped to $9.2 million from $6.6 million for the same period a year ago. Revenue from its PGxHealth division soared 114 percent to $2 million from $950,000 in the prior-year period, including a 122-percent increase in sales of its Familion and PGxPredict tests.
 
Revenue from its Cogenics genomics services group grew 26 percent to $7.2 million from $5.7 million year over year. The firm attributed the rise to the $1.1 million in revenue generated by Epidauros, which it acquired last year, and to an “overall improvement” in the performance of Cogenics' core service lines.
 
In acquiring Adenosine Therapeutics for $11 million in cash, Clinical Data further bolstered PGxHealth’s pipeline of therapeutics by adding drug candidates in cardiology, diabetes, inflammatory diseases, and sickle cell anemia.
 
The company issued Adenosine a $22 million, five-year promissory note and a $3.2 million, 32-month promissory note. Under the terms of the deal, Clinical Data will pay Adenosine up to $30 million in cash if it reaches certain regulatory and commercial milestones.
 
“We believe that combining our pharmacogenomic expertise with Adenosine Therapeutics’ broad estate of highly selective adenosine receptor agonists and antagonists could produce targeted therapeutics and companion biomarker tests across a number of therapeutic areas, with a development path made more efficient with the incorporation of biomarkers,” Clinical Data CEO Drew Fromkin said in a statement.
 
Growing Pipeline
 
Adenosine is a naturally occurring molecule produced in many organs and tissues. Cellular responses to adenosine have been shown to impact vasodilation, heart rhythm, and glucose control, among other processes.
 
In acquiring Adenosine, Clinical Data gained access to a library of small molecules that act as selective agonists or antagonists in the A1, A2A, A2B, or A3 adenosine receptor subtypes.
 
Some potential indications for product development that are now open to Clinical Data based on access to these adenosine receptor subtypes include: acute and chronic inflammation based on A2A agonists; asthma, diabetes, and inflammatory bowel disease based on A2B antagonists; attention deficit/hyperactivity disorder, drug addiction, and Parkinson’s disease based on A2A centrally activated antagonists; and cancer based on A2A peripherally activated antagonists.
 

“Clinical Data believes that there are opportunities to develop genetic components for other drugs in Adenosine’s pipeline.”

One late-stage investigational agent that Clinical Data’s PGxHealth unit has garnered rights to in the acquisition is Stedivaze, or apadenoson, a pharmacologic stress agent for myocardial perfusion imaging. Apadenoson is slated to enter Phase 3 testing in 2009 for myocardial perfusion imaging, and has also completed Phase I studies in acute inflammation.
 
A Clinical Data spokesperson told Pharmacogenomics Reporter this week that the firm has no current plan to develop a companion diagnostic for Stedivaze, but said the company “believes that there are opportunities to develop genetic components for other drugs in Adenosine’s pipeline.” He did not elaborate.
 
Clinical Data currently markets four tests under its Familion brand, for long QT syndrome, hypertrophic cardiomyopathy, Brugada syndrome, and catecholaminergic polymorphic ventricular tachycardia.
 
Under its PGxPredict group of products, the company markets a test for warfarin and the non-Hodgkin's lymphoma drug Rituxan, and is currently developing tests for Herceptin and Erbitux. The company is also working on advancing pharmacogenomic tests for CNS, rheumatoid arthritis, and diabetes.
 
In its therapeutic pipeline, Clinical Data’s lead product is the genetically-targeted depression drug vilazodone, which has entered Phase III studies that are expected to conclude in the second quarter of 2009. The company said it plans to submit a new drug application for the agent with the US Food and Drug Administration sometime late next year.
 
The company also has ATL1222 for acute inflammation in preclinical studies.
 
In the Adenosine acquisition, Clinical Data also gained ATL844 for diabetes and asthma, currently in preclinical studies, for which Novartis holds a licensing option, and ATL908, also in preclinial studies, for an ophthalmic indication, for which an undisclosed partner holds an option.
 
When asked whether Clinical Data would consider commercializing these candidates if its development partners choose not to exercise their options, the spokesperson said the firm is “not ready to comment on any plans for these compounds outside of licensing.”
 
However, in a presentation at the BMO Capital Markets conference earlier this month, Fromkin said of ATL844 that there may be “a strategic opportunity to leverage existing expertise of both [Novartis and Clinical Data] to pursue targeted drug and related biomarker development.” The comment is noteworthy because Clinical Data is already developing a pharmacogenomic test for type 2 diabetes.
 
Financials
 
Along with its 26-percent rise in total first-quarter revenue, Clinical Data reported that R&D spending soared 344 percent to $8.3 million during the period from $1.9 million year over year. The company attributed the increase to the ongoing Phase III trials for vilazodone.
 
The study, launched last December, is designed to test the long-term safety and tolerability of vilazodone patients at 40 US sites.
 
The company has said it is developing a companion pharmacogenetic test to determine which patients will respond to vilazodone. In addition to the safety study, Clinical Data has an ongoing second Phase III trial validating genetic biomarkers of vilazodone response that it identified in a previous trial.
 
Meanwhile, sales and marketing expenses during the quarter rose 82 percent to $3.3 million from $1.8 million in the prior-year period. The company attributed the spending increase to a “new sales and marketing function” within PGxHealth, including the hiring of a new sales force and senior-level sales and marketing management, and the addition of Epidauros sales and marketing expenses.
 
In addition, stock-based compensation expenses also rose, to $309,000 from $139,000 for the same period in the year-ago period.
 
General and administrative expenses grew 13 percent to $6.1 million from $5.4 million for the three months ended June 30, 2007. The company said that the increase was partly due to the addition of expenses of $620,000 for Epidauros and an increase in stock-based compensation expense.
 
Total operating expenses nearly doubled to $17.7 million from $9.1 million in the comparable period of 2007.
 
Net loss widened to $14.9 million from $5.4 million in the prior-year period.
 
As of June 30, Clinical Data held $38.6 million in cash and cash equivalents.

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