NEW YORK (GenomeWeb) – In the midst of reporting a 40 percent year-over-year increase in revenues for the third quarter, CombiMatrix officials said this week that the firm continues to progress in carrying out its three-pronged commercial business plan.
The Irvine, Calif.-based firm said that the revenue jump during the quarter was driven by sales of its prenatal array testing services, which grew 29 percent on a revenue basis and 71 percent on a test volume basis. On a conference call discussing the company's financial results, company officials highlighted the accomplishments resulting from the commercial business plan, comprising CombiMatrix's direct sales, marketing, and genetic counseling teams, now made up of 20 people; its pathology partnerships; and its industry partnerships.
In particular, CombiMatrix noted its collaboration with Sequenom forged in August 2013 to co-promote the use of non-invasive prenatal testing and chromosomal microarray analysis testing services.
"Specifically, our partnership with Sequenom continues to have a positive effect on our sales volumes," CombiMatrix President and CEO Mark McDonough said on the call, reiterating comments he made to BioArray News during the summer that revenues from the partnership were ramping, as was physician awareness about the company's offering.
The agreement was the first to combine NIPT and CMA in one offering, and was based on McDonough's belief that CombiMatrix's CMA service is complementary to, rather than competitive with, noninvasive next-generation sequencing-based tests such as Sequenom's MaterniT21 PLUS test.
While the deal was announced in August 2013, it didn't get off the ground until the first quarter of this year, "and since then, the growth has been very steady and [reached] the point now that [it's] contributing" about 25 percent to 30 percent to CombiMatrix's prenatal invasive testing volumes, McDonough said, adding the company feels there remains "a lot of room to grow" in that area.
To that end, he noted that during the summer New York granted CombiMatrix conditional approval to offer its CombiSNP Array for Pregnancy Loss for testing on fresh and formalin-fixed, paraffin-embedded patient samples. McDonough said that Sequenom has a large presence in that state, offering another revenue opportunity for CombiMatrix.
McDonough was also bullish on the firm's reimbursement efforts and said that CombiMatrix continues to invest in that area. During the third quarter, CombiMatrix signed payor contracts with Stratose and Blue Cross Blue Shield of Illinois. In the quarter, the company collected about $2 million in reimbursements, a record amount, and year to date, it has collected $5.4 million, he said.
CombiMatrix CFO Scott Burell added that revenues per test on both microarray-based and non-microarray-based tests increased during the third quarter, driven primarily by improved reimbursement results.
"For the instances where we're out of network, the average collection from a payor is really what drives the average revenue per test, so as collections improve it … certainly supports, and in some cases drives up, those averages," he said. Moving ahead, the company remains optimistic about the reimbursement picture as data continues to come in supporting the cost-effectiveness and clinical utility of CombiMatrix's tests.
At the recent American Society of Human Genetics conference, the company presented data demonstrating that its CMA technology yielded a successful result more than 85 percent of the time for miscarriage analyses, significantly better than the 60 percent success rate with standard karyotyping methods.
"On appeal, we're seeing greater wins than I think we have in the past," Burell said on the call, and in 2015 the firm plans to get more face time with payors in order to increase coverage of its services as an in-network benefit.
Lastly, the company said that it is on track to launch two tests by the end of the year. One test is anticipated to open up a new revenue opportunity for CombiMatrix in the in vitro fertilization market, while the other is expected to expand its footprint in the prenatal market, McDonough said.
The IVF test specifically creates new opportunities for cash pay, "which you can imagine helps you on your reimbursement front," as well as on the amount of time needed to collect its accounts receivables, he said. "Now we'll have multiple products in the fertility clinic."
Meanwhile, the planned prenatal test will be a complementary assay "that we think is really going to be well-accepted among the genetic counselors throughout the country, and we're very bullish about what that's going to do for us, as well." The company has wrapped up the validation studies for the tests, McDonough said, and is in the process of finalizing the intellectual property around them.