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We were delighted that Jon Burrows, CEO of Oxford Biodynamics and Matthew Wakefield, Chair, were able to update on the progress the company has made over the last six months at a Yellowstone Advisory webinar. A recording of the event is available here.
Oxford Biodynamics has spent the last 15 years developing a 3D genomic biomarker platform, Episwitch, which can diagnose disease, predict the likely cause of a patient’s condition and determine a patient’s response to treatment – all using a simple blood test.
The flagship product is the Episwitch CiRT (Checkpoint Inhibitor Response Test) which determines a patient’s likely response to checkpoint inhibitor treatments. The CiRT was launched in February 2022 and the early response from pharma companies, hospital groups and oncologists have been encouraging. The majority of the webinar focussed on this Test and its revenue potential.
The key is raising the awareness of what the CiRT can do. When OBD asks oncologists if they know which of their patients will respond positively to Checkpoint Inhibitor treatment the response is NO. When OBD tells them that the CiRT can give them this information before they start a treatment program the response is very positive and is the start of the process of engaging oncologists to learn more. The company has been encouraged by the early interest shown and are acutely aware of the need to convert this interest into sales. Use from early adopters is part of the process of spreading the word and they will form part of the sale process that converts more physicians to use CiRT.
Although only 42 tests have been sold since the product was launched at the end of February and while this figure may seem low, management are not disappointed by this number. In fact, this sales figure surpasses the early sales of other successful diagnostic product launches they have been involved in. Jon commented that is not uncommon to register no sales in the first 90 days.
There are 6000 oncology groups in the US and OBD is initially targeting 50 of them and the 250 doctors that work out of these groups. Orders have been received from 7 doctors from 6 different groups. The plan is to increase penetration within these 50 groups and within each group get a number of doctors making purchases. Jon illustrated just the tip of the potential revenues with some numbers. If each group had 1 doctor making 1 purchase a month that would generate revenues of $125,000 a month. If 2 doctors at each group make 2 purchases a month that would generate $500,000 of monthly revenues. There are 6000 oncology groups so the potential revenue from this channel is huge. The fact that they are already making progress with these hospital groups is very encouraging.
The process of raising attention and delivering these sales is led by a team that Jon has worked with successfully before at his previous companies. This is another reason he is confident that OBD can deliver – they have done it before. There is a lot of emphasis on customer service and clinical support. The Medical Director, Dr Robert Heaton is able to talk to everyone and convey the value of the product.
OBD is also raising awareness with the pharmaceutical companies. They are a key target segment as they have developed the drugs that are being used in treatment currently and are developing the drugs that will be used in the future. Over $20bn is spent on Checkpoint Inhibitor treatment every year. This may seem strange trying to sell a test to pharma companies which might indicate that their drugs are appropriate for particular patients but the insurance companies and payors who write the $200k treatment cheques are starting to say their funds have to be more effectively used. And pharma companies are pragmatic, they may not entirely like it but often they have other products in their portfolio which can be used as alternative treatments, more suited to the patients’ needs so enabling to still collect their revenues.
An initial proposal was sent to a top 10 Pharma company back in December covering testing prices based on significant volumes being ordered. A MSA was signed at ASCO and initial drawdown orders are anticipated against this MSA. Volumes are expected to be in the high hundreds.
Going into ASCO, OBD had four confirmed meetings with pharma companies but by the end of the conference they had met with 11 different pharma companies. Negotiations have advanced with 5 of them for various work packages and OBD are confident a number of signed contracts will result.
Towards the end of June, the CiRT was launched in the UK and is now available through private practices. Discussions have commenced with the NHS and a number of the oncologists that OBD is engaging with work in both private practice and the NHS.
Another key step in the monetisation of CiRT is the progress the company has made towards achieving its own specific reimbursement code. A unique descriptor code provides further validation and generally allows higher reimbursement amounts. OBD started applying for a unique descriptor code even before CiRT was launched and has now been told that they will receive approval before 1 July. The agreed code will then be published and available to charge against from October.
Given the overwhelming interest the company receive at ASCO they will be presenting at 4 further conferences this year with ESMO in Paris in September the next event. Attendance at this event comes from across the globe with 45% of the attendees US oncologists.
Whilst the focus is clearly on monetising CiRT there is also other work going on behind the scenes towards extending the use of CiRT into Breast and Bladder Cancer.
In response to a question about the financial strength of the company Jon made the following points. We have £4.6m of cash, we have no debt, we have no banking covenants. We have signed the first MSA relating to CIRT and are expecting significant orders to follow. We are expecting to sign further contracts with a number of major pharmaceutical companies. So, we are expecting significantly higher revenues in the coming months. We don’t have a short-term requirement for external funding.
In summary, management stressed how pleased they were with the progress of raising awareness for CiRT, initial orders and the potential to come. The product meets a clear medical need and brings significant benefits to patients, oncologists and payors. There are currently six big pharma companies negotiating possible contracts and the first high-volume contracts are expected soon. There is a lot of hard work to be done but the team are all pulling in the same direction.
A recording of the webinar is available here.
For anyone interested in more information on EpiSwitch® technology there is a helpful video here.