As it splits itself into two distinct divisions, Clinical Data hopes to focus its recently acquired assets and its legacy business on generating separate revenue streams from pharmacogenomics and small-volume clinical diagnostics, forgoing the option of coupling the specialties of its new and old subsidiaries.
The company has been mum about how it hopes to accomplish these goals, aside from brief mentions in company documents about expanding its menu of services and working with pharmas to guide drug development and drug repositioning with pharmacogenomic and metabolomic technologies. In these documents, company officials have hinted that its Genaissance and Icoria assets will play a key role in Clinical Data's plan to seize market share in molecular diagnostics and services to support drug treatment and drug makers.
Clinical Data's two new divisions will be called Clinical Data Molecular and Vital Diagnostics. The firm's newest subsidiaries Genaissance Pharmaceuticals and Icoria, both acquired last year will comprise the molecular division. The company's older, small-volume diagnostics holdings will make up its Vital Diagnostics division Clinical Data sales and service, Vital Scientific, Vital Diagnostics, and Electa Lab.
"We are streamlining Clinical Data's corporate structure, increasing accountability, and strengthening our relationships with our customers," President and CEO Israel Stein said in a statement last week. It was not clear whether any layoffs would accompany restructuring.
"We are streamlining Clinical Data's corporate structure, increasing accountability, and strengthening our relationships with our customers."
The molecular division's roles are further divided into services and diagnostics. Icoria's assets will generally work for Clinical Data's service arm with biomarker discovery, metabolomics, and gene-expression technologies. Joining these will be Genaissance's sequencing, genotyping, and biobanking capabilities.
The company's molecular diagnostics and pharmacogenomics efforts all appear to derive from Genaissance assets, including biomarker programs related to an anti-depression drug, a schizophrenia drug, a statin, and its Familion genetic test for patients at risk for a drug-related life-threatening cardiovascular event.
In presentations Stein delivered at the Jan. 19 Diagnostics Asia 2006 meeting in Singapore the day before the company announced its reorganization he emphasized those activities of the molecular division that Genaissance and Icoria had already begun, according to documents filed with the US Securities and Exchange Commission. In particular, presentation documents highlight the company's work with a failed selective serotonin reuptake inhibitor called vilazodone, which Genaissance licensed from Merck KGaA in order to develop biomarkers capable of identifying a patient group that would allow more favorable clinical trials for approval with the US Food and Drug Administration.
In a section labeled "Seeking Opportunities," Stein's recent presentation lists "Rescue 'stalled' drugs through PGx," which is a description of efforts such as the company's vilazodone project. Interestingly, Drew Fromkin, Clinical Data vice president and chief marketing officer, told Pharmacogenomics Reporter in December that the company had no plans to enter into additional arrangements similar to Genaissance's deal with Merck.
The documents accompanying Stein's presentation also highlight another Genaissance project related to the schizophrenia drug clozapine, for which Clinical Data aims to establish biomarkers that can help patients to avoid agranulocytosis, a potentially lethal adverse event linked to the drug. An effective schizophrenia treatment, clozapine remains a third-line drug largely due to its safety risk. In December, Genaissance said it had discovered genetic markers that could be used to help predict which patients would develop agranulocytosis. Fromkin said a clozapine diagnostic should be available in "mid-to-late 2006," and Stein's recent presentation documents note that the company plans to "commence marketing" this year.
The company also hopes to identify new intellectual property in central nervous system medicine, cardiovascular disease, and oncology, according to documents filed with the SEC. However, Fromkin said in December that the company would probably not expend efforts to combine expertise from its traditional specialty in blood-based small-volume clinical diagnostics with its new molecular capabilities. He declined to specify which diagnostic areas would receive most of the company's attention. "I think we're only months away from having more open discussions about those things," he said.
Clinical Data's business opportunity priorities, culled from the Singapore presentation documents, also included mergers, acquisitions, and partnering. It is difficult to determine Clinical Data's immediate potential for further acquisitions. The company's most recent earnings report covers the period ending Sept. 30, and Clinical Data ended that quarter with approximately $5 million in cash on hand. However, the company's two most recent buys were paid for with stock, not cash.
Since Sept. 30, Clinical Data purchased Genaissance and Icoria for $56 million and $11 million, respectively, in two all-stock transactions. The company also signed agreements with investors for a $12-million private placement of its common stock in November.
Several calls to Clinical Data this week were not returned before press time. A third-party spokesperson for the firm said it would have more to disclose in the coming week.
Chris Womack ([email protected])