Citing the high cost of research and discovery work and low return on investment, Miraculins last week announced it is moving away from the proteomics R&D field to concentrate on its diagnostics business by acquiring diagnostic technologies, making it the latest on a growing list of companies to abandon proteomics.
In an interview with ProteoMonitor last week, Christopher Moreau, president and CEO of Miraculins, said that the company shifted its business model after deciding that a business built on developing proteomics-based diagnostics is not sustainable. While it won’t move completely away from proteomics, the intent is for Miraculins to become a diagnostics firm.
“After meeting with our major shareholders and stakeholders and listening to what’s going on in the market, [we decided] that it would be very difficult to justify continuing research and discovery work in the area of proteomics,” he said.
When the company was formed six years ago, he added, the investor community was more patient in allowing companies such as Miraculins to reach financial maturity. But these days the market is looking for immediate results.
“And so in studying the risk equation, we felt what would be better for us … would be to look at acquiring technologies, initially immunoassays, that have already gone through the discovery and research phase … and needed the next stage, which would be clinical-grade assay development, confirmation studies, regulatory approval, and then through to distribution,” he said.
“There’s still a gap for big pharma, a diagnostic, or a big reference lab [in picking] up the diagnostic technology,” Moreau added. “And that’s the niche that we want [to address] — to come in and acquire these technologies, add value … develop the assay so that it could be sold as a research assay, and then ultimately for full clinical use once regulatory approval’s been made.”
The company has looked at about 300 technologies developed by academia and small firms, including imaging technology, immunoassays, molecular diagnostics, and software that interpret test results. Of that, “well over 100” represent “potential opportunities,” Moreau said.
The company’s focus has been on cancer, but moving forward it will look at additional disease areas.
As for its proteomics assets, which include biomarkers for various cancers and a platform developed in-house called BEST, Moreau said the company is currently evaluating its next move. No decision has been made about possibly selling the assets and Moreau said he would prefer licensing out the technology rather than selling it.
“After meeting with our major shareholders and stakeholders and listening to what’s going on in the market [we decided] that it would be very difficult to justify continuing on research and discovery work in the area of proteomics.”
The company plans to keep its BEST platform, which combines SELDI mass spectrometry, internally developed sample collection protocols, proprietary algorithms, and data analysis.
“I think we’ll be cannibalizing part of that process and applying it going forward,” Moreau said.
The business makeover will have no effect on the company’s plans for its P2V prostate cancer diagnostic test, he said. Miraculins recently said that based on feedback from the US Food and Drug Administration on a pre-investigational device exemption filed with the agency, it will conduct another study looking at P2V’s ability to detect cancer in men whose PSA test results were inconclusive [see PM 05/29/08]. Miraculins is set to begin the study, Moreau said last week, but did not provide further details.
Miraculins also will continue developing an assay for a candidate biomarker for colorectal cancer it has identified. The marker was part of an IP portfolio that the company bought from Europroteome three years ago [see PM 06/24/05].
As part of that purchase, the company also acquired biomarkers for gastric, pancreatic, and breast cancers. It had been developing diagnostics for those diseases, but about a year and a half ago it began suspending work due to a lack of funds and other resources.
Moreau said Miraculins will evaluate how those markers fit in the company’s new business strategy. The company could restart work on them, for example, if a university had technology that could push the markers further along into assay development.
Earlier this month, the company also purchased a Luminex Bio-Plex 200 Protein Array system. In addition to improving its internal assay-development efforts, the platform could allow Miraculins to offer assays to other firms and researchers, Moreau said.
“At some point in the future, I’m sure we’ll be discussing whether we should set up as a [Clinical Laboratory Improvement Amendments] lab,” he said.
In reinventing itself, Miraculins, which was founded in 2002, joins a growing field of proteomics companies that have either been forced to shift their focus or close up shop due a poverty of results, both financial and scientific.
In recent years, Vermillion, formerly called Ciphergen Biosystems, and Caprion Pharmaceuticals divested its proteomics businesses to concentrate on other higher-growth businesses.
Most recently, prior to Miraculins’ announcement, Lumera killed off its proteomics subsidiary, Plexera, when it announced it was merging with GigOptix and focusing all its energy on its electro-optical business. At the time Lumera’s interim CEO Joseph Vallner, like Miraculins’ Moreau, cited a black hole of R&D costs that would have continued for at least a few more years before its lead proteomics platform could hit the market [see PM 04/03/08].
The challenge of turning candidate biomarkers into diagnostic tests is also not unique to Miraculins. Despite all the research being done in the field, few protein-based diagnostics have made it to market. The reasons are myriad, including poor research, regulatory hurdles, and a lack of organization among all stakeholders, which include clinicians, government regulators, and private and public payors.
At the annual meeting of the US Human Proteome Organization in March, speakers also cited the sheer difficulty of the science, and one official from the NIH said protein biomarker research is still very much in the discovery stage and “years away from getting anything of clinical [value].” [See PM 03/20/08]
It is against this backdrop that Miraculins has been struggling for the past few years to keep its biomarker business afloat and increase shareholder value. In late 2006, it made an unsolicited bid for Ibex, a Montreal company that was developing cancer and arthritis diagnostics, only to find itself rebuffed. At the time, Ibex President and CEO Paul Baehr said the company was “unimpressed” with Miraculins’ technology and its offer to buy Ibex [see PM 11/22/06]. Shortly afterward, Jim Charlton stepped down as Miraculins’ CEO, and was replaced by Moreau.
In the past year, shares of Miraculins’ stock, traded on the Toronto Stock Exchange, have dropped from a high of CAD$.44 to its current price of about CAD$.10.
The company reported revenue of CAD$1,263 [US$1,247] during its fiscal first quarter, ending Feb. 29, an 87-percent drop from the year-ago figure of CAD$9,911. Losses narrowed to CAD$219,576 from CAD$443,741 the year before. As of Feb. 29, Miraculins said it had CAD$131,712 in cash and cash equivalents.
As the company moves away from being a discovery shop, it is “comfortable to move downstream,” Moreau said. “We’re a little more risk-averse now. I think the market is [as well] and we’re looking for a shorter time frame to take a product from acquisition to market.”