Unhappy with the sales of its urine-based molecular test for the prostate cancer biomarker PCA3, Canadian cancer diagnostics firm DiagnoCure is urging Hologic, the test's commercial conduit, to either step up commercialization efforts or relinquish rights to the test back to DiagnoCure.
Hologic could accomplish the former option, according to DiagnoCure, by increasing marketing efforts for the assay and porting it from an outdated instrument platform to Hologic's next-generation Panther molecular testing platform.
Short of that, DiagnoCure said, it would prefer to market the test itself and eventually develop and manufacture an in-house PCR-based version of the assay, which is currently performed using Hologic's transcription-mediated amplification technology.
DiagnoCure, based in Quebec City, originally signed a licensing agreement with San Diego-based molecular assay developer Gen-Probe in 2003. Under that pact, the companies were to co-develop a urine-based molecular assay for the expression of PCA3, DiagnoCure's proprietary prostate cancer-specific biomarker, as an alternative to prostate-specific antigen testing.
The agreement also called for Gen-Probe to pay DiagnoCure an upfront $3 million fee as well as future fees and contract development payments of up to $7.5 million over the subsequent three years. In addition, Gen-Probe received exclusive worldwide rights to diagnostic products resulting from the pact and agreed to pay DiagnoCure royalties of 8 percent on cumulative net product sales of up to $50 million, and royalties of 16 percent on cumulative net sales above $50 million.
Gen-Probe and DiagnoCure developed the assay using Gen-Probe's proprietary transcription-mediated amplification (TMA) technology, an isothermal amplification method that can produce billions of RNA amplicons from a single target molecule in less than one hour, and which for many years served as the primary technology for many of Gen-Probe's molecular assays.
In 2006, Gen-Probe obtained CE marking for the assay and began marketing it in Europe under the brand name Progensa PCA3. Then, in 2009, DiagnoCure and Gen-Probe amended their 2003 agreement, setting goals for a US Food and Drug Administration submission of the assay. The new agreement called for Gen-Probe to make annual payments of $500,000 to Diagnocure until specific milestones were met, with half of the amounts paid applied against future royalties. In exchange, Gen-Probe acquired 4.9 million shares of newly issued DiagnoCure stock.
Gen-Probe received FDA clearance in February 2012 for Progensa PCA3, allowing it to market the test in the US. The approval was for the test to be used in conjunction with other patient information to help guide repeat biopsy decisions for men who have had one or more negative biopsies. The approval also indicated that the test was to be used on Gen-Probe's family of Direct Tube Sampling (DTS) systems.
Less than three months later, in early May 2012, Hologic announced that it was acquiring Gen-Probe for approximately $3.7 billion. Hologic, traditionally a women's health company, noted at the time that the crown jewel of the acquisition was Gen-Probe's molecular testing product portfolio and expertise, particularly in the area of women's health.
Thus began a perceived lack of attention to the PCA3 assay, according to DiagnoCure, although Gen-Probe had already begun backing away from cancer diagnostics for a few years before the acquisition.
"Gen-Probe did a lot in terms of studies … [but there were] several years between the development of the assay and actually going forward with FDA approval in the US for a number of reasons, one of them having to do with Gen-Probe moving away from cancer [into other endeavors]," DiagnoCure CMO and Chairman Yves Fradet told PCR Insider this week.
"This of course has not been very good for the [PCA3] test, because nobody talks about it," Fradet added. "[Gen-Probe] didn't invest in sales and marketing, although they invested in research and supported a lot of studies. And finally, when FDA approval was secured, soon after Gen-Probe was sold to Hologic, [whose] focus is women's health … [which] again created a negative impact on sales and marketing."
The results are clear, Fradet said, and the company underscored its point late last week when it released its fiscal first quarter 2014 earnings. For the three months ended Jan. 31, DiagnoCure's total revenues fell to C$146,969 ($133,000) from C$167,916 in the year-ago quarter, with revenues for both quarters composed completely of license and royalty revenues from its agreement with Hologic. DiagnoCure noted in a statement that quarterly worldwide sales of Progensa were less than $2 million and were not meeting the company's expectations.
"Since the FDA approval the sales have kind of gone up a little bit, then plateaued, then started going back down," Fradet said this week. "Of course it's a small bit in the whole package for [Hologic], but it’s our only product generating revenue." Fradet also noted that, pursuant to the agreement between DiagnoCure and Gen-Probe, the royalty rate currently still stands at 8 percent, since about $40 million of cumulative sales of Progensa have been tallied. The figure at which DiagnoCure's royalty rate will increase to 16 percent has since been adjusted from the original $50 million to $62 million.
Fradet claimed that a lack of marketing is not the only culprit for lackluster Progensa sales. "The DTS is a bit of a dinosaur as a platform and an impairment to broader acceptance," he said. "There are not many of them available, and they don't fit well in a lab."
That situation was supposed to be resolved by porting the Progensa assay to Gen-Probe's, and now Hologic's, next-generation Panther system, he claimed.
Indeed, Gen-Probe said in 2012 just after Progensa won FDA clearance that it expected to eventually offer the assay on Panther. The instrument platform has since been commercialized and FDA-cleared along with several women's health molecular assays, but Hologic has not moved Progensa to the system.
It is unclear whether it still intends to do so; a spokesperson for Hologic told PCR Insider this week that "everything [Hologic has] said publicly about PCA3 is in [its] publicly filed SEC documents and issued press releases." A search of SEC archives revealed that Hologic has only mentioned Progensa in two filings, essentially noting that it is an assay in its product portfolio and recapping the licensing and regulatory history of the test. The Hologic spokesperson also said that the company does not disclose revenues from specific product lines.
DiagnoCure noted that nearly 250 papers reporting the clinical utility of PCA3 have now been published, including 54 in 2013 alone. Fradet said that many of those papers have even examined the clinical utility of using the assay on men prior to first biopsy, and that a cumulative 6,000 men have been tested with the assay in the US by a number of independent investigators.
"I think the momentum of the data is there; what's lacking is a real push to focus on that and create awareness," he said. 'We could certainly do a better job there if we focused on this, and there is a real market opportunity there that is being missed."
Also, "if Hologic is not going to do anything — and I'm not saying they're not — but if they're not pushing more and not deciding to go forward more with it, then obviously something has to be done, and we cannot be dependent on the TMA [technology]," Fradet added.
To that end, DiagnoCure has initiated discussions with Hologic about potential options, he said. In the meantime, the company and other independent research groups have done plenty of work showing the PCA3 assay produces comparable results using a real-time PCR approach.
"We have … data showing that PCA3 can work perfectly well using PCR," Fradet said. "Why PCR? It's on every machine everywhere, and there are a number of platforms that can [be used], while the TMA is really only [used on] the Gen-Probe platform."
Of course, if DiagnoCure brought the assay back in house to develop a PCR version, the test would need to be re-evaluated by the FDA to be cleared for US marketing. Re-marketing the test in Europe would be an easier proposition.
"We'd certainly be interested in taking it back," Fradet said. "Then of course we'd do the marketing on the existing [DTS] platform as long as we can, but obviously we know the future would be to transfer it to a more widely available PCR-based platform. We're not talking about tomorrow morning."
"We're just hopeful that either Hologic will really push this, or we can get it back and do a better job," he added. "Frankly, it's frustrating because most urologists know about the test but they don't know how to use it. It's that need for a switch."