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CGI Pledges to Launch Two More Array Tests This Year after 'Busy' Q1

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Cancer Genetics said recently that it expects to launch at least two more array-based tests in its blood cancer and urogenital cancer franchises this year: a clinical assay for mantle cell lymphoma, and another, undisclosed test in the urogenital cancer space.

The company discussed the tests earlier this month during CGI's first-quarter earnings call — the company's first after going public in April.

CGI currently offers CLIA-certified and New York State-cleared clinical assays for genomic assessment of risk, prognosis, and treatment personalization in several hematologic and urogenital cancers. The company markets assays for chronic lymphocytic leukemia and small lymphocytic lymphoma, and earlier this year launched a diffuse large B-cell lymphoma test (BAN 2/26/2013), as well as UroGenRA-Kidney, a microarray assay for kidney cancer diagnosis and subtyping (BAN 5/7/2013).

According to CGI's President and CEO Panna Sharma, the company is currently running "thousands of tests each quarter" and plans to expand to fill its capacity moving forward.

Sharma said in the call that CGI's goal is to get these two new product introductions done relatively early in this year. The first will be the mantle cell lymphoma test, followed by another test in the urogenital category, which he said the company will announce some time in the next few months.

According to Sharma, CGI is the "only company that has launched a clinically validated microarray for characterization and stratification of complex blood borne cancers – for chronic lymphocytic leukemia, small lymphocytic leukemia, and diffuse large B-cell lymphoma."

The new mantle cell assay will join these tests, which rely on CGI's internally designed mature B-cell neoplasm, or MatBA array. According to Sharma, MatBA can inform earlier and more accurate diagnosis, and provide cancer risk and survivability information to inform therapeutic decision making, "especially in complex cancers like B-cell cancers, where genetic heterogeneity make them very complex to capture."

"This is what our tools do today, which is critical for managing healthcare spending, mapping therapy options, and improving survivability," he said.

In April, CGI also launched its first test in the urogenital cancer area — UroGenRA-Kidney, which it validated with Memorial Sloan Kettering Cancer Center and the Cleveland Clinic for both resected samples and fine needle aspirate biopsies.

According to the company, the assay can subtype kidney cancer tissue samples among three malignant renal cell carcinoma subtypes — clear cell, papillary, and chromophobe — as well as a benign form of renal cancer called oncocytoma, and can be used to select the appropriate therapy based on the kidney cancer subtype.

"Major centers are moving largely to fine needle biopsy [in renal cancer], which makes it challenging for pathologists to characterize tumors," Sharma said of the test. "We are able to go from fine needle aspirate to an answer in three days … so the very first thing our array does is it obviates the need for surgical biopsy, which we showed with MSKCC and the Cleveland Clinic."

According to Sharma, CGI is now is working with MSKCC on a next-generation version of the kidney cancer assay that will allow it to more specifically provide information on whether a patient is likely to respond to the targeted receptor tyrosine kinase inhibitor sunitinib.

Sharma did not provide details on customer response to its newest microarray tests, but said April was the busiest month the company has seen, with the trend continuing in May.

For the newest test additions for DLBCL and kidney cancer, he said the company has a lot of customers trying both new tests, testing them against current methods, and expects greater uptake in the third and fourth quarters of this year.

Sharma said that the proceeds from CGI's initial public offering will mostly go toward driving commercial sales, while R&D spending will stay where it has been for the company in recent months.

He also said the company expects to share news about reimbursement for its array tests later this year. Specifically, the company is beginning to see many third-party payors routinely cover MatBA tests. "As that trend continues we will report on it," he said.

Additionally, CGI will also make announcements this year on health economic studies demonstrating the financial impact of specific tests in its blood and urogenital cancer areas.

Sharma also mentioned CGI's planned joint venture with the Mayo Foundation for Medical Education and Research to create a new company to develop next-generation sequencing-based oncology diagnostic services and tests.

He did not discuss the impact of this NGS project on the future of the company's microarray business, but said CGI is also committed to "investing in existing products to improve performance and sensitivity."

In addition to the MatBA and UroGenRA arrays, CGI has previously said it has two others in development: UgenRA, focused on the gynecological cancers, and LeukA, to aid in the differential diagnosis and prognosis of the main types and subtypes of leukemia (BAN 8/7/2012).

Financials

In the earnings call, CGI said that its first-quarter revenues jumped 45 percent year over year.

For the three months ended March 31, the company reported revenues of $1.2 million, compared to $834,752 during the first quarter in 2012. CGI's clinical test volume was 1,911 tests in the quarter, an increase of 19 percent from 1,610 in the previous year's first quarter.

Average revenue per test also rose 23 percent to $615 from $502 a year ago, the company said.

During the quarter, R&D expenses went down 6 percent to $490,577 from $523,511 in 2012. Its SG&A spending rose 54 percent to $2.0 million from $1.3 million in the previous year's quarter.

The firm posted a profit of $2.4 million, compared to a net loss of $1.1 million in the first quarter a year ago and finished the quarter with $216,872 in cash and cash equivalents.

CGI also raised about $6.9 million in gross proceeds, or $5.0 million in net proceeds, when it went public in April, the company said.