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SomaLogic Seeks 'Strategic Alternatives' for Dx Business to Focus on Life Science Market

SAN FRANCISCO – SomaLogic is looking for help in growing its diagnostics unit as the firm seeks to cut costs and focus on its core proteomics business, CEO Roy Smythe said on Thursday here at the JP Morgan Healthcare Conference. He also provided updates on the firm's proteomics products.

Smythe said he prefers either to spin off the diagnostics unit or to partner with another company, though the firm is exploring all options. An outright sale is a less desirable possibility, given current low valuations for biotechnology companies, Smythe said, but early responses suggest SomaLogic will get one of its preferred "strategic alternatives."

The assets available include 32 SomaSignal tests, such as a cardiovascular residual risk test, and 10 more assays in development, as well as 700 patents covering those tests. Sixteen of the assays are in clinical use as laboratory developed tests. A deal would also include access to the firm's database of 1.5 billion protein measurements and data from 450 patient samples.

In addition to advancing the SomaSignal tests, Smythe see opportunities to license assays, as well as for SomaLogic's technology to power companion diagnostics for pharma companies.

"Whatever we do, we hope to keep it tied, strategically, to [SomaLogic]," he said. Diagnostics provides a few million dollars of direct annual revenue, but there's "a lot of synergistic revenue" for the firm's life science business, he said. "We haven't invested much on the commercial side of diagnostics. It'll be interesting to see what happens once we truly commercialize" the diagnostic tests.

The firm's decision to cut operating expenses comes as it anticipates full-year 2022 revenue at the high end of its previous guidance of $93 million to $98 million, or approximately 20 percent year-over-year growth. At the end of Q3, the firm had more than $500 million in cash and investments.

SomaLogic saw its total number of customers nearly double over 2022, to almost 200, Smythe said.

The beta access program for distributed SomaScan kits at certified sites has ended, and SomaLogic is launching the kits generally this month, Smythe said. He anticipates certifying more sites in the US, Europe, Singapore, Japan, and the Middle East.

Work on a 10,000-protein assay is "well into development" and is on track for release in late 2023, he said. The firm is now planning for a 15,000-plex assay.

The company's work with Illumina to develop a version of SomaScan using next-generation sequencing as a readout is "going very well," he said, and is on track for launch sometime in 2024.

SomaLogic is also working on a modular sample prep instrument with outside partners, also slated for 2024. A chip-based version of its proteomics platform, based on technology acquired from Palamedrix in July of last year, could be ready for release in 2025.

Smythe touted recent deals, including an extension to be Novartis' primary proteomics provider until 2033 and a deal with an unnamed large biopharma company, which the firm plans to say more about at a later date.

In Thursday afternoon trading on the Nasdaq, shares of SomaLogic closed up 10 percent at $3.25.

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