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CombiMatrix prenatal, pediatric strategic shift paying off
April 22, 2014 by leonardzehr · Leave a Comment
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CombiMatrix’s (NASDAQ:CBMX) strategic shift at the end of 2012 to focus its chromosomal microarray testing platform in the areas of prenatal genetics and pediatric development disorders is gaining traction with patients, physicians and payors.
 Mark McDonough
“We are a vastly different company from a year ago,” Mark McDonough, president and CEO, says in an interview with BioTuesdays.com. “We have a sharper focus, with millions more patients covered for microarray testing and numerous leading labs and physician groups now on board.”
The Irvine, CA-based company specializes in miscarriage analysis, prenatal testing and pediatric genetics at its CLIA-approved lab. “We offer DNA-based testing for the detection of genetic abnormalities beyond what can be identified through traditional methods,” he adds.
Chromosomal microarray analysis is the primary genetic test to evaluate newborns with birth defects and is now being more widely used for prenatal testing.
“We provide valuable molecular diagnostic solutions and comprehensive clinical support to foster the highest quality in patient care,” Mr. McDonough says. “Our strategy to build a dominant position in the prenatal and pediatric markets continues to prove out as our commercial productivity moves forward.”
As part of its new focus, CombiMatrix is expanding its sales force and strategic partnerships in order to drive volume in prenatal and pediatric testing, while stepping back slightly from its post-natal and oncology operations.
The company’s repositioning seems to be paying off, resulting in record testing volumes and rapid revenue growth. For the fourth quarter of 2013, total revenue rose 18.5% to $1.75-million, with prenatal microarray revenue climbing 56.5% to just over $1-million.
 CombiMatrix’s Mid-2012 Strategic Shift to Focus on its Prenatal Services Seems to Paying Off
Driving the company’s new focus were two articles, published in the fourth quarter of 2012 in The New England Journal of Medicine, that documented the favorable clinical utility of using microarrays, compared with traditional testing in both the prenatal and miscarriage management markets.
“These two studies helped open the eyes of the market to the efficacy and need for microarray testing,” Mr. McDonough contends.
In the fourth quarter of 2013, the American College of Obstetricians and Gynecologists (ACOG) recommended microarray analysis as first-line genetic testing over karyotyping, which is a test to examine chromosomes in a sample of cells in order to help identify genetic problems as the cause of a disorder or disease.
“The new guidance from ACOG recommending chromosomal microarray analysis as the first-line test when an ultrasound reveals one or more major fetal abnormalities is a significant milestone in the evolution of genetic testing for fetal abnormalities—but one that we had expected, based on the clinical data from recently published studies,” he adds.
 Market Drivers
A $12-million financing in the fourth quarter of 2013 allowed the company, among other things, to double the size of its sales force to 12, with plans to hire at least three more field personnel in the first half this year. Its direct sales staff calls on physicians specializing in maternal fetal medicine, Ob-Gyn clinics, reproductive obstetricians, endocrinologists and pathologists.
Mr. McDonough says CombiMatrix’s three-pronged approach to driving revenue includes direct sales along with industry and pathology lab partners.
Last August, CombiMatrix teamed up with Sequenom (NASDAQ:SQNM) to market chromosomal microarray analysis testing services to broaden and confirm the results of noninvasive, prenatal testing (NIPT) to physicians and their patients. Sequenom is a global leader in the NIPT market, with 75 sales reps in the field.
CombiMatrix also has strategic relationships with Manhattan Labs, PathGroup and Pathology Inc. “We are also in discussions with other potential industry and pathology lab partners,” Mr. McDonough adds.
In the second half last year, CombiMatrix signed payor contracts with FedMed National Provider Network, America’s Choice Provider Network, Blue Cross and Blue Shield of Kansas City, Three Rivers Provider Network and Blue Shield of California, representing some 73 million covered lives.
Potential Prenatal Market Opportunity: ~236,600 Patients
The company’s microarray analysis is reimbursed at approximately $1,500 per test. Based on an estimated annual prenatal patient population, Mr. McDonough figures the market opportunity at more than $350-million.
The prenatal patient population consists of nearly 100,000 women of advanced maternal age, who have had an abnormal ultrasound, and nearly 140,000 patients who have had miscarriages.
According to Mr. McDonough, miscarriages represent the fastest growing market as women are having babies later in life. “Some 50% of miscarriages are caused by genetic abnormalities, and microarray analysis is able to look at the whole chromosomal picture for answers.”
He says CombiMatrix differentiates itself from “Big Box” lab competition through a personal and high-touch service model. In addition to offering high efficacy and rapid turnaround of prenatal and miscarriage test results, “we offer unique counseling that allows parents to make informed decisions on pregnancies and future pregnancies, refining the risk for additional pregnancy loss.” |
