Med BioGene, a diagnostic developer based in Vancouver, BC, filed in late December for an initial public offering in the US.
In a registration statement filed with the US Securities and Exchange Commission, Med BioGene said that it will use the proceeds from the IPO to complete the validation of its first test, called LungExpress Dx, on a real-time, quantitative reverse transcriptase PCR platform.
LungExpress Dx is a 15-gene test for use in identifying patients with early-stage non-small-cell lung cancer who are at a higher or lower risk of mortality following surgical removal of their tumor. The test, which was initially developed on the Affymetrix microarray platform, is targeted for launch before the end of the year.
Med BioGene, which trades on the Toronto Stock Exchange, did not say how much it expects to raise in the offering.
Med BioGene said that following completion of the offering it intends to use the funds to complete validation of LungExpress Dx; establish a CLIA lab, where it will perform the test; launch LungExpress in the US as a service through the CLIA lab; build a sales, marketing, and reimbursement team, either on its own or through partnerships; commercialize LungExpress in Asia and Europe through distribution deals; and seek pharma partners to use LungExpress as a companion diagnostic.
Around 25 percent of the net proceeds will be set aside for research and development expenses, of which 30 percent will be earmarked to "complete the validation of our commercial assay using RT-qPCR and conduct further studies following the commercial launch of LungExpress Dx to confirm the ability of our test to quantify mortality risk and predict the likelihood of chemotherapy benefit."
The company said that the LungExpress Dx RT-qPCR assay analyzes the expression of the 15-gene signature "and is then normalized relative to a set of four reference genes."
The assay is being developed for use with tumor specimens that have been preserved by freezing or with formalin-fixed paraffin-embedded tissue.
Last March, Med BioGene CEO Erinn Broshko told PCR Insider sister publication BioArray News that although the 15-gene signature was developed on the Affy GeneChip platform, the company decided to transfer the signature to a Taqman RT-PCR assay manufactured by Applied Biosystems, part of Life Technologies, in order to reduce the price of the assay.
"The underlying signature was developed using Affymetrix microarrays, but with PCR, you get a better dynamic range," Broshko told BAN at the time. "More importantly, [PCR] is an assay that basically every lab has access to, and the cost basis is much lower than running a microarray," he said.
"Lastly, it's easier to develop a PCR assay for robust use with formalin-fixed, paraffin-embedded tissue samples than using it with a microarray," he added.
Med BioGene noted in its SEC filing that it chose RT-qPCR "because of its sensitivity, specificity, high reproducibility and wide dynamic range and lower cost compared to microarray technology."
In the filing, Med Biogene noted that in an initial study of specimens from the National Cancer Institute of Canada Clinical Trials Group JBR.10, "patients classified by LungExpress Dx as higher risk significantly benefited from adjuvant chemotherapy, and those classified as lower risk did not benefit, and may have experienced a detrimental effect, from adjuvant chemotherapy."
The company said that results of this study, as well as a demonstration of the cost savings associated with the test, will be presented later this month at a poster session of the American Association for Cancer Research/International Association for the Study of Lung Cancer Joint Conference on Molecular Origins of Lung Cancer.
Med BioGene first signaled its intent to go public in the US last month. At that time, the firm also filed an interim non-brokered private placement of a maximum of C$2.5 million (US$2.37 million) worth of units.
The company has not reported any revenues this year. For the first nine months of 2009 it had a net loss of US$1.6 million, and as of Sept. 30, it held US$1 million in cash and cash equivalents.
As of Sept. 30, Med BoGene employed seven full-time staffers and four "significant consultants."