This article has been updated with information from Foundation Medicine's 10Q filing about Medicare reimbursement for its tests.
NEW YORK (GenomeWeb) – Foundation Medicine this week commercially launched its long-anticipated liquid biopsy assay for clinical use, and announced an expanded partnership with AstraZeneca for developing companion diagnostics as well as the acquisition of a laboratory in North Carolina formerly owned by Sequenom.
In a conference call to discuss Foundation's first quarter earnings on Tuesday, company executives also highlighted a number of recent studies that they said demonstrate the clinical utility and differentiation of the firm's genomic profiling assays. CEO Michael Pellini said that in the first three months of 2016, the company published nine papers in peer reviewed journals and had 41 posters or oral presentations at meetings.
Along with its earnings, Foundation Medicine announced the launch of its blood-based liquid biopsy assay FoundationACT, short for Assay for Circulating Tumor DNA, for patient testing this week.
The assay, which looks for clinically relevant alterations in 62 genes and fusions across six genes, targets the 10 to 15 percent of metastatic cancer patients who cannot have a tissue biopsy or don't have enough tissue available to perform the company's FoundationOne test. FoundationACT has been optimized for sensitivity and specificity across all classes of molecular alterations, including base substitutions, insertions and deletions, focal amplifications, and gene fusions.
"We believe it will become the go-to molecular profiling solution of choice for oncologists when a tissue biopsy is not readily available or obtainable," said Foundation President and COO Steven Kafka during the call. "FoundationACT complements our existing products by enabling us to offer a full suite of comprehensive genomic profiling solutions to meet the varying needs of oncologists and patients all along the care continuum."
The assay had been long in the works — the company launched it to its biopharmaceutical partners for research use last December and had originally planned to release it for clinical use in the first quarter. However, in a regulatory filing in March, the firm said it had postponed the launch to the second quarter "to complete the full optimization of its laboratory operations for this new assay."
Earlier this year at the Advances in Genome Biology and Technology meeting in Orlando, Foundation reported results from an analytical validation study of FoundationACT, which showed that it was 100 percent concordant with FoundationOne and droplet digital PCR for 87 base substitutions, three indels, and five other genomic alterations.
Also, last month at the American Association for Cancer Research annual meeting in New Orleans, Foundation showed data from an analytical validation study, in which it compared results from 200 patient-matched ctDNA and FFPE biopsies from lung, breast, and other cancers. The results showed greater than 99 percent sensitivity for the detection of alterations in blood at low frequency, with a low rate of false positives.
Last summer, Foundation started a multi-center prospective study to clinically validate FoundationACT across various cancers and cancer stages, including early-stage disease.
In addition, Foundation said on Tuesday that it has expanded its relationship with AstraZeneca to develop companion diagnostic assays to identify patients likely to benefit from cancer drugs in AstraZeneca's pipeline.
"We use companion diagnostics throughout clinical development to deliver innovative, targeted therapies to patients most likely to benefit," said Ruth March, VP and head of personalized healthcare and biomarkers at AstraZeneca, in a statement. "The leading genomic profiling approach provided by Foundation Medicine can help ensure that patients are matched with therapies specifically targeted to the molecular drivers of their disease."
Under the agreement, AstraZeneca will use a Quality Systems Regulations (QSR)-compliant version of FoundationOne to enroll patients into clinical trials for targeted therapies. The CDx will assess four classes of genomic alterations in several cancer genes and will be developed in parallel with AstraZeneca's drugs as part of a coordinated regulatory strategy.
The deal expands an existing collaboration with AstraZeneca that the companies started in late 2012 and is Foundation's fourth companion diagnostic agreement with an oncology drugmaker. Later this year, Kafka said, Foundation expects to submit its first CDx, developed for Clovis Oncology, for premarket approval to the US Food and Drug Administration. The firm's long-term goal remains to develop a universal CDx.
Expanding lab operations
Earlier this year, Foundation said it was looking to open a second laboratory outside of its Cambridge, Massachusetts headquarters. Kafka said during the call that the company recently completed a transaction to acquire an existing next-generation sequencing lab facility in Research Triangle Park, North Carolina.
A company spokesperson confirmed that the facility used to house a clinical laboratory that Sequenom recently divested as part of a company restructuring. Sequenom had opened the lab in 2013 to run its sequencing-based noninvasive prenatal test.
Kafka said the transaction includes a five-year lease, license transfers, certain laboratory equipment, and the hiring of more than a dozen "experienced operations staff."
The new facility will support continued innovation and expansion of Foundation's product portfolio, provide lab redundancies, and expand the firm's operational flexibility, he said, though Foundation will maintain its Cambridge facility and headquarters. "While the main purpose for the additional lab is to serve the long-term needs of our company, the location may also provide advantages to Medicare coverage and payment in the future," he said. Kafka declined to provide a timeline for when the new lab will become operational.
Several research analysts covering Foundation Medicine suggested that the new North Carolina facility might help the company obtain better Medicare coverage of its tests — about 30 percent of the tests it reported this quarter were for patients covered by Medicare — because the new lab is under the jurisdiction of a different Medicare Administrative Contractor, Palmetto.
That contractor issued a local coverage decision last year that includes comprehensive genomic profiling tests for a subset of non-small cell lung cancer patients, and specifically included the FoundationOne test as of last October, according to a recent regulatory filing by Foundation.
Foundation's current MAC, National Government Services, on the other hand, issued an LCD earlier year that became effective in April and provides coverage for hotspot tests including five to 50 genes for metastatic NSCLC patients. "We do not believe this LCD reflects coverage for our … products," Foundation said in the filing, noting that its tests analyze more genes more comprehensively.
As of March 31, the company had not recognized any revenue from Medicare for its tests. NGS "has either denied the claims that we have submitted or not processed and reimbursed us for any of the claims in a manner that we believe is consistent with applicable processing guidelines," according to the filing.
With the help of its partner Roche, Foundation has also started expanding its business beyond the US. Kafka said that in early April, Roche launched sales and marketing activities for FoundationOne in Israel, Austria, Germany, Switzerland, Brazil, Canada, and Singapore. Launches in other countries will follow later this year and beyond.
"While we don't expect a significant ramp in ex-US volume in the near term, we do expect these activities will provide us a first-mover advantage with our highly validated [comprehensive genomic profiling] approach in Europe that will aid in driving volume over the long term," Kafka said.