CombiMatrix this week said that it is developing a test that can screen for multiple cancers simultaneously by measuring miRNA levels in peripheral blood.
Taking a page out of the playbooks of miRNA diagnostic developers Exiqon and Rosetta Genomics, CombiMatrix said it will market the array-based test as a homebrew assay available through its own CLIA-certified laboratory. It expects to introduce the test in 18 to 24 months.
“This test is taking advantage of a trend in medicine today, which is preventative … [and] is an approach to identify disease early enough to the benefit of the patient and the healthcare system from a cost standpoint.”
But unlike the Exiqon and Rosetta tests, CombiMatrix’s will be designed to screen for cancer, not diagnose it. During a conference call held this week, CombiMatrix CEO Amit Kumar said that the test, dubbed the CombiMatrix Comprehensive Cancer Array, would be able to show patients that “something is going on” in a specific tissue within a specific organ. Using this information, a doctor can then follow up with traditional methods to confirm the presence of cancer.
“This test is taking advantage of a trend in medicine today, which is preventative … [and] is an approach to identify disease early enough to the benefit of the patient and the healthcare system from a cost standpoint,” Kumar said.
He added during the call that CombiMatrix has been planning to develop such a test for cancer screening for several years, but he remained short on specifics. He said that the company would not yet announce the cancers for which the assay would test, and noted that there might not be miRNAs that can be used as markers for certain malignancies.
He was also uncertain about how early the test would be able to discern a problem in patients, but said it would be ideal if the test could detect of stage I and II cancers.
As CombiMatrix develops the test, Kumar said that it plans to publish data on the array, identify marketing partners, and bring on thought leaders who will give the company technical advice on the test and who “may be valuable in marketing the test.”
“As we continue with the development process, we will establish strategic partnerships that enable access [to] the large market opportunity,” he said, adding that those partnerships could be with cancer drug developers and with diagnostic companies that make assays that gauge therapeutic response.
These potential partners could even support the development costs for the array, Kumar noted.
Worries on Wall Street
CombiMatrix’ foray into the miRNA field comes at a time when the company’s stock price has been battered as investors worry about a $35.7 million court award that is expected to be delivered to CombiMatrix from National Union Fire Insurance Company, a subsidiary of beleaguered insurer American International Group (see GenomeWeb Daily News, 9/16/2008).
In May, the US District Court for the Central District of California entered a final judgment in favor of CombiMatrix, deciding that the insurance firm had refused to defend and indemnify CombiMatrix under its director and officer’s insurance policy. Since Sept. 12, the last business day before CombiMatrix issued a statement announcing the court’s final judgment in the suit, the company’s share price has dropped more than 20 percent to $11.55 on Oct. 7, the day the company discussed development plans for the array with investors.
Investors are spooked despite assurances by CombiMatrix CEO Amit Kumar that the court award will be delivered.
Kumar stressed in two separate statements in September that the court-awarded damages are secured by the bond, and whatever happens to AIG will not affect the award. The bond is “severed from the assets and liabilities of National Union and AIG,” Kumar told investors at the time. “No matter what happens to those companies financially, these funds are safe and payable to us upon success in the appeal process.”
At the same time, CombiMatrix has been facing a cash crunch.
In the quarter ended June 30, the company’s cash, cash equivalents, and available-for-sale investments totaled $3.8 million in the second quarter compared to $8.2 million in the fourth quarter of 2007.
“At December 31, 2007, we anticipated that our cash, cash equivalents and anticipated cash flows from operations would be sufficient to meet our cash requirements through September of 2008,” the company said in a statement at the time. “In order for our company to continue as a going concern beyond this point and ultimately to achieve profitability, we will be required to obtain capital from external sources, increase revenues, and reduce operating costs.”
At the time, the company expressed “substantial doubt” about its ability to continue beyond September of 2008 without additional financing.
In July, however, CombiMatrix raised $10 million in convertible debt financing that it said will enable it to meet its cash requirements through the third quarter of 2009.
And now, CombiMatrix is attempting to rally investors behind the launch of the new cancer array.
“We expect significant demand for this test,” Kumar said during the conference call. “If this test penetrates even one percent of the market, it represents $125 million in revenue, which is significant for this company.”
-Turna Ray, editor of Pharmacogenomics Reporter, contributed to this article.