Transgenomic said yesterday that it has contracts in place with three undisclosed pharmaceutical companies and is in discussions with "many more" to explore applications for its recently licensed technology for coamplification at lower denaturation temperature, or COLD, PCR.
The company also updated investors on how it expects the COLD-PCR technology to drive future revenues through diagnostic kit sales and testing services, and create new opportunities to work with the pharmaceutical sector to create companion diagnostic assays.
Transgenomic President and CEO Craig Tuttle made the remarks about the COLD-PCR technology during a conference call discussing the company's fourth-quarter and full-year 2009 financial results.
Transgenomic, based in Omaha, Neb., reported that its fourth-quarter revenues rose 7 percent year over year, and that it turned a profit in Q4 after recording a net loss in the same quarter of 2008.
The firm brought in total revenues of $6.5 million for the three-month period ended Dec. 31, compared to $6.1 million for the fourth quarter of 2008. Meantime, Transgenomic reported a profit of $129,000, or $0.00 per share, compared to a loss of $219,000, or $0.00 per share, for Q4 2008.
For full-year 2009, Transgenomic had revenues of $22 million, down 8 percent from $24 million for FY 2008; while its net loss for the year was $1.9 million, or $.04 per share, up from $495,000, or $.01 per share, in 2008.
Despite 2009's decrease in revenues and rising net loss, Transgenomic remains optimistic that recent strategic initiatives — in particular the broad and exclusive license agreement it inked in October with the Dana-Farber Cancer Institute for the COLD-PCR technology — will mirror its most recently quarterly results and have a positive effect on the company's financial performance in coming months.
In the call, President and CEO Craig Tuttle said that the company is so far "delighted" with its decision to license the COLD-PCR technology and agreed with an investor's assessment that the technology could be "disruptive" for the company and the industry.
Tuttle explained that traditional mutation-detection methods rely on PCR amplification at high temperatures and subsequent sequencing studies, but that the sensitivity constraints of sequencing means that some mutations that are present in low concentrations may not be detected.
COLD-PCR, comparatively, may be able to pick up mutations with a sensitivity that is as much as 50 times greater than current methods, which means that the technology "may be able to discover why and how certain drugs work in some people and not in others … and may be able to detect disease earlier," Tuttle said.
Transgenomic is particularly bullish about the idea that COLD-PCR's increased sensitivity may allow the company to create tests to detect mutations in DNA that is circulating in bodily fluids such as blood, urine, and saliva, and that correspond with mutations from excised cancerous tissue.
For example, Tuttle pointed to a recent internal study it completed in collaboration with an undisclosed pharmaceutical company validating the use of COLD-PCR to detect colorectal tumor-associated KRAS mutations that determine the efficacy of some therapies.
The mutations were detected in plasma samples with mutation levels too low to be detected by standard DNA analysis methods such as Sanger sequencing, Transgenomic said.
Screening the plasma samples using standard Sanger sequencing resulted in only 70 percent concordance between matched plasma and tumor due to missing KRAS codon 12 and 13 mutations. Meantime, Transgenomic said that its pharmaceutical partner confirmed a 100 percent concordance between Transgenomic’s mutation results and the matched tumor KRAS genotypes.
"Clearly COLD-PCR in blood is hot," Tuttle told investors during the call. "There is strong excitement in the pharmaceutical marketplace in understanding how COLD-PCR will contribute to patient selection … particularly because you can look at blood."
Tuttle said that the aforementioned publication, which has not been published, along with other recent research papers demonstrating COLD-PCR's sensitivity, has garnered more interest in the technology from potential pharmaceutical partners.
As such, Transgenomic "has contracts in place with three pharmaceutical companies for COLD-PCR to understand the mechanism of action of various drugs and predictive value of custom diagnostic assays for improving patient care," Tuttle said.
"In addition to recognizing revenues … our goal is to develop companion diagnostic assays, which will allow us to guide revenues in kit sales and testing services in our CLIA lab," he added.
Tuttle also said that while the company will look to develop new tests and possibly companion diagnostics, the COLD-PCR technology can also be easily incorporated into its existing test kits.
"Instead of having, like everyone else, a tumor-associated test kit, now we can have a blood, or saliva, or urine test kit," Tuttle said, stressing that the company still needs to clinically validate such applications. "But personalized medicine clearly has some momentum … and that's one area where we expect growth."
Further, Tuttle pointed out that the company's license with Dana-Farber includes the exclusive use of COLD-PCR with Sanger sequencing. "About 95 percent of sequencing out there is Sanger, so they will have to come to our door for that," Tuttle said.