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Newly Public CollabRx Sees 'Explosive Growth Potential' for Informatics-based MDx Offering


CollabRx officials see "explosive growth potential" for the company's target market of informatically guided genomic medicine, according to comments made during the firm's first earnings call as a publicly traded company.

CollabRx, which offers cloud-based interpretation of cancer genomics data, entered the public market last July when it was acquired by Tegal, a public firm that was previously involved in the semiconductor market but has since divested most of its holdings in that area to focus on the CollabRx business.

The combined company, which changed its name to CollabRx in September, last week reported its financial results for its third fiscal quarter, ended Dec. 12, 2012.

During a conference call to discuss the earnings, Thomas Mika, CollabRx's president and CEO, stressed that the company's performance in the quarter — in which it reported a widening net loss and minimal revenues — will be "the last quarter of no significant revenue recognized in connection with CollabRx."

CollabRx began trading on the Nasdaq on Sept. 27, 2012, just two days before the beginning of the third fiscal quarter, Mika noted. "We were still very much a development company," he said. "We do not believe the December quarter is reflective of CollabRx going forward; nor, for that matter, is our current quarter."

Mika noted that CollabRx is "just entering" its commercialization phase in "a market that itself is just newly emergent but with explosive growth potential."

He added that in the current quarter, the company expects to begin recognizing revenues an agreement with Life Technologies for software development. Under that agreement, forged last October, CollabRx is one of three companies — the others are Ingenuity and Compendia Bioscience — that are involved in building Life Tech's Integration Portal, which will provide information to testing physicians about treatment options, clinical trials, and details about their patients' molecular profiles from public literature.

Furthermore, Mika said, by the end of 2013 or early 2014, "we expect to see recurring revenue related to the rollout of our interpretive reporting product along with Life's own introduction of a series of molecular diagnostic products."

CollabRx's flagship product is a series of web-based applications for oncology called Therapy Finders that help clinicians and their patients select the most appropriate treatments for tumors.

The apps use data from an underlying proprietary knowledgebase that the company has developed that contains aggregated data from multiple public sources including published papers, conference abstracts, clinical trials, and diagnostic guidelines.

CollabRx collects this information using techniques such as natural language processing, machine learning, and semantic analysis and then it works with independent advisory teams of physicians to "synthesize knowledge" from the data "by contextualizing it with respect to a specific cancer type," Gavin Gordon, the company's head of business development and alliances, explained to BioInform this week.

Since it was founded in 2009, the company has so far developed apps for colorectal cancer, melanoma, lung cancer, and is working on one for prostate cancer, Gordon said. These apps cover targeted therapies, immunotherapies, and other kinds of treatments, he added.

CollabRx has begun offering Therapy Finder apps to both physicians and patients for free through distribution partnerships with cancer centers, oncology practices, organizations like the College of American Pathologists, and websites such as Everyday Health, Gordon said.

Since its not charging end users for the app, CollabRx generates revenue through content licenses with distributors and sponsorships. For example, it out-licensed its content to Everyday Health, which was sponsored by Boehringer Ingelheim, he said.

The company is also mulling additional sponsorship opportunities to raise revenue, according to Gordon. He said it will announce a partnership next week that will provide one more avenue through which interested organizations can sponsor and support the Therapy Finder apps.

Mika explained in the call that the company is has embarked on a four-pronged commercial strategy. The first is "establishing a network of physicians and patient users through partnerships to build brand recognition." The second is "completing commercial agreements with large players such as online media [and] pharma to build our product portfolio and revenue base," while the third is forging partnerships with "service providers or companies with complementary capabilities." The final piece is "planning for a program of accelerated growth through mergers and acquisitions," he said.

Gordon said that the company intends to build and market more oncology applications based on its knowledgebase for the testing market and that it will also develop other kinds of products based on the data resource, citing the arrangement with Life Technologies as an example.

Gordon told BioInform that CollabRx hasn’t released the customized version of the knowledgebase that it has developed for Life Tech. He wouldn’t comment further on the subject except to say that its availability would be driven in large part by when Life Tech launches its diagnostic and laboratory developed tests.

Meanwhile CollabRx is developing a commercial version of its knowledgebase that it will release either in the second or third quarter of 2013, Gordon said. This product is intended for the laboratory market and will provide users with information about biomarkers from sequencing panels and how they could be used to treat patients, he explained.

Pricing for this new product, which will likely be web-based, hasn’t been determined as yet, Gordon said.

The Financials

CollabRx last week reported a net loss of $1.15 million, or $0.16 per share, for the quarter ended Dec. 12, 2012, compared to a net profit of $2.27 million, or $1.35 per share, for the same period in the prior year.

The firm reported $25,000 in total revenue, compared to $38,000 for the same quarter in the previous year, and a gross profit of $7,000. Operating expenses came to about $1.28 million for the quarter with about $260,000 of that associated with non-cash items. It ended the quarter with about $5.1 million in cash.

Moving forward, CollabRx expects its quarterly cash operating expenses to range from $750,000 to $1 million. However, it expects that its operating expenses in near-term quarters to be materially offset by revenue from existing agreements with its current partners and customers and new agreements that it expects to sign in fiscal year 2014.

Mika said during last week's call that things will look up for CollabRx this year as its Therapy Finder apps proliferate in the oncology arena and also through its "pipeline of additional strategic partnerships can bring CollabRx solutions to even more patients, physicians and clinicians, beginning in calendar 2013."

Gordon noted that CollabRx hopes to out-compete companies like newly minted N-of-One, whose PrecisionWorks platform (BI 6/1/2012) also helps oncologists and patients make informed decisions about cancer treatment strategies.

It will also have to fend off challenges from companies like Knome, Omicia, and NextBio, which also offer clinically centered products, he said. However, these are companies "that have developed products that are primarily for research use and they are attempting to position them as clinical resources," he noted.

These tools "might have a clinical context to them, but they are not used by physicians at the point of care," he said. CollabRx, on the other hand, has "never done basic or pathway-based translational research-use applications; we've only been interested in the clinical side."