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Exiqon Exec Says Impact of miRNA Dx Will Take Time, Company Offers Peek at Other Tests

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Although a number of planned microRNA diagnostics, including one set to launch early this year, are expected to help Exiqon reach its goal of profitability by 2011, a company official cautioned investors this week that revenues from such tests aren't likely to have an immediate impact on the company's top line.

Meanwhile, in its annual report to shareholders, Exiqon provided a glimpse of other previously undisclosed miRNA tests in its diagnostic pipeline and indicated that it aims to eventually sell the products as US Food and Drug Administration-approved in vitro diagnostic kits.

Exiqon's most advanced miRNA-based diagnostic is a test to predict disease recurrence in stage II colon-cancer patients. Although the company had originally anticipated introducing the test in 2008, in December Exiqon President and CEO Lars Kongsbak told RNAi News that commercialization wouldn't happen until early 2009 (see RNAi News, 12/11/2008).

The Danish firm remains on track to meet that goal, Kongsbak said during a conference call held this week to discuss the company's 2008 financial results. However, industry watchers shouldn't expect that the colon-cancer test will significantly affect Exiqon's revenues for at least a year, he stressed.

This year, "we will see [our] first microRNA test going onto the market, [but] I have to re-emphasize that when you launch a new diagnostic test, it takes time before you see the revenue," Kongsbak said during the call. "You may be able to launch the product, but it takes time for the market to pick it up."

And even after the test's adoption by the marketplace, reimbursement arrangements must be made with insurers, all of which "could easily take between 12 to 18 months," he added. "So, we don't expect the newly launched microRNA product to have any significant impact on the revenue stream in '09.

"But certainly in [2010] we will see a much more positive impact," Kongsbak said.

Kongsbak did not provide details on the planned pricing of the miRNA diagnostics. In the annual report, however, Exiqon noted that products "similar" to its miRNA tests previously "have achieved reimbursement of several thousand dollars, and we aim to secure adequate reimbursement for all our new miRNA tests."

As it moves its first miRNA-based test to the market, Exiqon is also continuing work on a variety of others that use the small, non-coding RNAs. Last year, Kongsbak told RNAi News that the company would keep its diagnostic focus on products to assist with cancer-treatment selection, but declined to specify the nature of the tests.

In the annual report, however, Exiqon broke out its diagnostic pipeline, which includes tests to evaluate both cancer recurrence and resistance to treatment. In addition to its colon-cancer recurrence tests, the company revealed that it is also working on a discovery-stage product to detect drug resistance in patients with stage II, III, and IV colon cancer using miRNA signatures in formalin-fixed, paraffin-embedded tissue.

At the same time, Exiqon has discovery-stage miRNA-based tests under development for predicting rectal-cancer recurrence in stage II patients, for determining drug resistance in stage II, III, and IV lung cancer patients, and for evaluating the risk of disease recurrence in stage I and II endometrial cancer patients.

More advanced miRNA tests in the pipeline include one for determining the source of cancers of unknown primary site, the development of which is being funded by a $3 million grant from the Danish government (see RNAi News, 5/22/2008), and one for predicting disease recurrence in stage I lung cancer patients.

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In the annual report, Exiqon said that these new tests, all of which are being designed to measure miRNA-expression patterns in FFPE samples, will be introduced "over the next few years." More specific timing was not provided.

Like peer Rosetta Genomics, Exiqon will initially make its miRNA diagnostics available through its in-house Clinical Laboratory Improvement Amendments-certified laboratory, which only requires the approval of state regulators. However, in the report, the company indicated that it plans to validate the tests through clinical trials so that it can "make them available to other laboratories and pathologists as fully approved in vitro diagnostic kits."

Such a move would be in line with comments Kongsbak made late last year when he said that he anticipates that the FDA will eventually begin regulating miRNA diagnostics. In 2007, the agency indicated that it may begin overseeing home-brew diagnostics available through clinical laboratories, although it is not yet clear whether miRNA tests will be impacted.

Company officials were not immediately available for further comment.

2008 Financials

For 2008, Exiqon's net loss rose to DKK 115.4 million ($19.5 million), or DKK 3.94 per share, from DKK 67.8 million, or DKK 3.35 per share, the year before.

Revenues during the year jumped 159 percent to DKK 128.3 million, in line with previous guidance, while research and development spending doubled to DKK 57.9 million, primarily as a result of the $45 million acquisition of cancer diagnostics maker Oncotech, through which Exiqon picked up its CLIA lab, in early 2008 (see RNAi News, 4/10/2008).

Selling, general, and administrative expenses rose 75 percent to DKK 123.2 million, helping to push total operating costs during the year up 82 percent to DKK 181.1 million.

As of Dec. 31, Exiqon had cash and cash equivalents totaling DKK 174.3 million ($29.4 million).

Looking ahead, the company said that it expects revenues in 2009 to be in the range of DKK 175 million to DKK 200 million, of which about DKK 70 million to DKK 80 million is expected to come from the firm's diagnostic operations. Net loss for 2009 is expected to be between DKK 120 million and DKK 135 million.

Exiqon said that it "maintains its long term financial goal of reaching profitability by 2011 with its current capital resources."

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