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Exiqon Sees Partnership for miRNA Dx by End of 2010

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By Doug Macron

Exiqon last week provided new details about the timing of three of its microRNA diagnostics programs, stating that at least one, which is focused on developing a colon-cancer recurrence test, is expected to be partnered by the end of the year.

But no mention was made of a number of other miRNA diagnostics projects, suggesting that the Danish company has put these on hold as part of a scale-back of its efforts in the area that included the shuttering of its California-based clinical laboratory improvement amendments-certified lab Oncotech earlier this summer.

Exiqon also last week released its financial results for the first half of 2010, reporting a 27 percent uptick in revenues and a matching decrease in operating costs.

An early entrant into the miRNA diagnostics space, Exiqon set its sights on introducing its first test to the US market in 2008 and, to facilitate the process, bought Oncotech for $45 million in late 2007 (GSN 11/29/2007).

However, its plans began to sour as it missed its goal for launching the miRNA diagnostic and found the development of such tests to be challenging and expensive. By late last year, Exiqon had decided to divest Oncotech and only market diagnostics based on the small, non-coding RNAs in conjunction with partners (GSN 12/17/2009).

In June, however, the company revealed that it would simply shut Oncotech down and sell off its assets after negotiations with potential buyers faltered when California's Medicare administrative contractor decided to stop providing reimbursement coverage for the lab's existing products (GSN 6/10/2010).

Despite the setback, Exiqon earlier this year reaffirmed that it would advance its miRNA diagnostics, but quietly trimmed several programs from its pipeline. Absent from its 2009 annual report were development-stage tests to detect drug resistance in patients with stage II, III, and IV colon cancer and with stage II, III, and IV lung cancer; and a test for evaluating the risk of disease recurrence in stage I and II endometrial cancer patients (GSN 2/25/2010).

The annual report did highlight a test dubbed miRSign for differentiating cancerous from non-cancerous tissue, but last week, Exiqon only provided guidance on three diagnostics: one for identifying stage II colon cancer patients at significantly high risk of disease recurrence and for whom adjuvant chemotherapy may be an option; a blood-based test for early colon cancer detection; and a test for identifying the source of cancer of unknown primary origin.

According to the company, the colon cancer recurrence test remains under development. In February, the company said that it will only move into clinical testing once it has been partnered, and last week it said that a deal is expected to be signed before the year is out.

Meantime, the colon-cancer detection effort is moving forward, and "we expect to communicate data by year-end," Exiqon said. In mid-2008, the firm said that initial data from this program, which is being funded with a DKK24 million ($4.1 million) grant from the Danish National Technology Foundation, was expected to be available in the first quarter of 2009.

For the CUP test, Exiqon said that it is still optimizing the relevant biomarker signature, and that "the program has generated a unique knowledge about miRNA activities in various tissues," providing value to the company's service arrangements with pharmaceutical industry collaborators. In the end, though, "the commercial future of the … program will depend on a partner." No guidance on when an arrangement might be struck was provided.

Company officials did not return a request for comment.

First-Half Financials

For the six-month period ended June 30, Exiqon's net loss dropped to DKK21.4 million ($3.6 million), or DKK0.71 per share, from a year-ago loss of DKK46.8 million, or DKK1.54 per share.

Operating expenses dropped to DKK44.6 million from DKK60.8 million, reflecting a restructuring of the company's life sciences division last year.

Revenues for the period, meanwhile, jumped to DKK44.8 million from DKK 35.4 million, in part due to increased sales for Exiqon's research products.

At the end of the first half of the year, the company had cash and cash equivalents totaling DKK30 million.

Looking ahead, Exiqon said it expects total 2010 revenues in the range of DKK80 million to DKK90 million, with its annual net loss to be about DKK40 million.

"I am very pleased with the continued strong organic growth and overall reduced costs," Exiqon CEO Lars Kongsbak said in a statement. "We remain on track for profitability by 2011.”

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