NEW YORK (GenomeWeb News) – In the midst of reporting its first half earnings, Belgian molecular diagnostics firm OncoMethylome Sciences today said it is changing its business model to concentrate on its commercial clinical diagnostic operations while moving away from basic research.
The company was short on details about the change, but in a statement, Jan Groen, who became OncoMethylome's CEO in April, said that the company will shift from its historical focus on basic research for cancer screening applications and out-licensing of biomarkers to third parties for product development. "The cornerstone of our new strategy will be the development and commercialization of high-value predictive and prognostic laboratory developed tests," he said.
The goal of the shift, he added, is to allow the company to control its own fate and be less dependent on "priorities and timelines of licensing partners." It also is expected to allow OncoMethylome to operate "in a space with high-end products in terms of pricing and reimbursement.
"First and foremost, it is our goal to reap the full benefits of our proprietary DNA methylation platform by developing stand-alone molecular diagnostic products for rapid commercialization," Groen said.
In step with that, the company has determined that a colorectal cancer blood-based screening test that has been undergoing clinical validation is no longer a fit under the company's new strategy. OncoMethylome is discontinuing the program and will outsource biomarkers that have been developed "as soon as practical."
Partnerships already under way include one with Exact Sciences where OncoMethylome is providing its stool-based colorectal cancer biomarkers for a test under development. Exact Sciences anticipates applying for FDA approval for the test in 2012, OncoMethylome said.
It is also working with SelfScreen to develop a diagnostic aimed at women who have tested positive for human papillomavirus. The test is for the identification of those patients who, in fact, have cancer and would need a follow-up with a gynecologist. And the company has an agreement with Roche covering OncoMethylome's MGMT assay. The gene promoter methylation test will be used in a Phase III clinical trial to determine the clinical utility of Roche's Avastin in newly diagnosed glioblastoma brain tumors.
The firm announced today that it consolidating all its European activities in Belgium and will close its facility in the Netherlands by the end of the year. It plans to change its name also.
For the first half of 2010, OncoMethylome's revenues were essentially flat at €1.3 million [$1.6 million]. Commercial revenues rose by 55 percent due to higher testing volumes, the compay said, while grant revenues dropped by 31 percent "due to the company's focus on development and commercialization efforts rather than on subsidized basic research projects," it said.
Net loss for the H1 2010 was €5 million, or €0.38 per share, a 21 percent improvement from year-ago figures of €6.3 million, or €0.48 per share.
R&D spending for the six months shrank to €4.4 million from €5.6 million in H12009. SG&A costs dipped slightly to €2 million, compared to €2.1 million a year ago.
The company said it had €14.4 million in cash and cash equivalents as of June 30.
For full-year 2010, OncoMethylome said that revenues are expected "to remain stable compared to 2009," when it posted total revenues of €2.5 million.