Skip to main content
Premium Trial:

Request an Annual Quote

Leerink Initiates Coverage of Trovagene with Outperform Rating

NEW YORK (GenomeWeb) – Leerink today initiated coverage of liquid biopsy-based diagnostics firm Trovagene with an Outperform rating. 

Analyst Dan Leonard gave the San Diego-based company's shares a $9 price target, and in a report, he noted the sizeable liquid biopsy market opportunity — which he pegged at a minimum of $10 billion long term — calling it "a market with the potential … to be the largest in molecular diagnostics." 

He said Trovagene is among the leaders using next-generation sequencing-based technology to identify cancer biomarker in biofluids and highlighted the firm as one of the few using urine as a biofluid, rather than blood, which is the matrix used by the vast majority of firms developing liquid biopsy tests. 

"The company's enrichment technology, optimized for small DNA fragments, makes it uniquely suited for these sample types," Leonard said. 

Among the few competitors also developing a urine-based liquid biopsy diagnostic test is Exosome Diagnostics. 

Leonard further said that Trovagene has demonstrated its approach in several published or presented studies and plans to submit three additional manuscripts for publication by the end of the year. "We expect the April [to] June 2016 medical meeting season to be another of heightened data and activity for the company," he said. 

After years of developing its technology, Trovagene has also started the commercial phase of its business. It has launched a clinical experience pilot program under which oncologists try Trovagene's technology and send back a patient sample for analysis. The firm has said that in the first 60 days of the program, five times as many doctors have signed up to participate in it as Trovagene expected. 

The firm has declined to disclose the number of physicians in the pilot program, but Piper Jaffray analyst William Quirk estimated it at about 200. 

As part of its commercialization effort, the company also hired Matthew Posard in March as its chief commercial officer. He previously was a senior vice president and GM for Illumina's new and emerging marketing opportunities, as well as VP of global marketing. 

Moving ahead, Leonard said that Trovagene will need to convince payors to reimburse for its technology and noted that the firm plans to begin speaking with insurers in the fourth quarter of this year. Because reimbursement codes and payment levels for the genes and mutations on Trovagene's test menus are already in place, "we believe achieving some level of reimbursement for [its] tests could be straightforward," he said. 

But, Leonard added that Trovagene's aim of preferential reimbursement for its technology — $1,000 per test, compared to $200-$300 per test with existing codes — "will require some work." 

In afternoon trading on the Nasdaq Trovagene shares slipped 2 percent to $5.92. 

Earlier this week, the company reported a dramatic rise in its net loss for the second quarter as operating expenses increased and the fair market value of derivatives changed.