BG Medicine this week reported first quarter revenues of $888,000, up 85 percent from $480,000 in the first quarter of 2012.
The company also announced that it had appointed Paul Sohmer as president and CEO, replacing Eric Bouvier, who it said will remain as a consultant.
The revenue increase was driven by $820,000 in sales of the company's BGM Galectin-3 test, nearly doubling the $416,000 it posted in Q1 2012. The remaining $68,000 in revenues came from BG Medicine's services business, up 6 percent from $64,000 a year ago.
BG Medicine's revenues fell short of the average Wall Street estimate of $1.2 million.
On a conference call following release of the results, BG Medicine's Executive Vice President and CFO Charles Abdalian said that the increase in BGM Galectin-3 sales reflected increased volume from the company's laboratory providers. He noted that six reference labs had ordered the product in 2013 compared to three in 2012.
BG Medicine's net loss for the quarter was $5.4 million, or $0.21 per share, down from a net loss of $7.7 million, or $0.38 per share, in the first quarter of last year, and beating the average Wall Street estimate of a net loss of $0.27 per share.
The decrease was due primarily to lower R&D and SG&A costs, the company said. Its R&D spending was down 53 percent to $1.4 million from $3.0 million in Q1 2012. SG&A expenses dropped to $4.0 million, down 17 percent from $4.8 million in the year-ago period.
According to Abdalian, the reduction in R&D costs was due primarily to the ending of the company's biomarker research activities, while the SG&A decrease was a result of transitioning to an internal sales force and more disciplined marketing spending.
In announcing the appointment of Sohmer, BG Medicine framed the move as part of its ongoing transition from focusing on test development to commercialization.
"Sohmer has a strong track record of building commercially successful diagnostic companies and we are excited to have him lead BG Medicine at this critical time," Stephane Bancel, the company's executive chairman, said in a statement. "With two innovative diagnostic tests that aim to meet important needs in cardiovascular care and a sharpened focus on execution, we believe the pieces are in place to accelerate our commercial growth and deliver strong results for our shareholders."
Sohmer most recently served as the CEO of diagnostics and research laboratory Viracor-IBT Laboratories, and has held positions including CEO of Pathway Diagnostics, CEO of TriPath Imaging, and CEO of Genetrix.
Bouvier was president and CEO of BG Medicine for a less than a year and a half. He replaced Pieter Muntendam in those posts in January 2012.
At the time of Bouvier's appointment, Bancel similarly pointed out his experience in commercial operations, saying Bouvier's "passion for cardiovascular diagnostics, coupled with his extensive international commercial and general management experience make him a strong leader to transform BG Medicine from an R&D-focused company into a robust commercial organization."
With regard to BG Medicine's commercialization efforts, Bouvier highlighted on the earnings call an agreement signed this week between the company and the Trenton, NJ-based community health improvement collaborative Trenton Health Team, under which THT will be using BG Medicine's BGM Galectin-3 test to help reduce hospital readmissions for its heart failure patients.
The deal "was a key part of our hospital readmission strategy and was the first major win for our newly formed commercial team," Bouvier said.
The hospital readmission market has become a key focus for BG Medicine's commercialization plans for the Galectin-3 test. The shift toward this space comes in response to new guidelines implemented by the US Centers for Medicare and Medicaid Services in October that penalize hospitals with high patient readmission rates. In March, the company published two studies comprising 3,300 subjects that indicated that serial evaluation of galectin-3 levels could help clinicians identify heart failure patients at increased risk of unplanned hospital readmissions (PM 3/8/2013).
According to Robert Remstein, president of THT, the organization plans initially to use the Galectin-3 test primarily to guide treatment on the outpatient side, identifying patients who should be monitored more closely or be put on aldosterone antagonist therapy due to high risk of readmission.
Currently the test isn't available in-house at THT hospitals, but Remstein told ProteoMonitor the organization will consider making it available depending on usage levels among its physicians.
"It's really a volume question," he said. "If our laboratory sees the physicians are ordering it frequently then we'll [add it in-house]."
Remstein said that he and THT were made aware of the test by a former member of the organization who has since moved to BG Medicine.
"[BG Medicine] came and presented the data to us, and we read the [studies on the test] and presented it to our internal cardiology leaders," he said. "And they recognized that this was something new – none of us had heard of it before."
"It's new, so we don't have any track record to show that in our environment [Galectin-3 testing] works," Remstein said. "But the literature suggests that it is very helpful."
THT will not be establishing the test as a standard protocol or otherwise recommending its use, he noted. Rather, the organization is "providing an education to our doctors about a new assay that seems to have promise in heart failure, and we're going to see how it goes," he said.
An alliance of major Trenton healthcare providers including Capital Health, St. Francis Medical Center, Henry J. Austin Health Center, and the city's Health Department, THT serves around 90,000 patients, Remstein estimated.
The company also provided an update on its CardioScore test, noting that its collaborators at Mount Sinai Medical School would by the end of the year complete gathering additional data requested by the US Food and Drug Administration as part of the test's 510(k) application. That test is currently available in the EU, having received a CE mark in December.
BG Medicine ended the quarter with $21.1 million in cash and cash equivalents, and $322,000 in restricted cash.