Following the full year results on 24th January, CEO Jon Burrows and Chair Matthew Wakefield, gave an update on corporate performance, the company strategy and prospects for the current year. A recording of the webinar is available here.
Oxford Biodynamics has made significant progress in 2022 commercialising 3D gene regulation for precision medicine with their EpiswitchTM technology. This technology looks at the 3D architecture of the whole genome and interprets the information with respect to phenotypes, particularly clinical outcomes. OBD has mapped the 3D genome, compiled a 3D genomic knowledge base and has built and deployed a series of clinical assays that address a number of questions in precision medicine that were previously intractable.
2022 was a busy year for OBD with progress made along many fronts but with a focus on clinical diagnostic testing. The flagship commercial product, the Checkpoint inhibitor Response Test (CiRT) was launched at the end of February and this test has obtained its own unique payor (CPT) code within 4 months, which is a very early validation of the test. The initial build out of the US commercial team was begun and deliberately included only one field salesperson to launch CiRT in Florida and learn how to sell the test in the first instance. The company also raised $10m at a premium in October 2022. At the same time product development in the UK lab have provided a product portfolio of tests that can be deployed going forward in the following areas: Prostate cancer, colorectal cancer, veterinary medicine, Rheumatoid arthritis and ALS.
The CiRT is the only predictive blood test that tells a patients likely response to Checkpoint Inhibitor treatment. It does this from a simple blood test, is fast and accurate and is a real step forward for doctors, enabling them to identify patients likely to respond to treatment. The test was launched in February 2022 and the strategy was to target early adopter doctors to educate them and learn how they will use the test. The idea being that these doctors will try the test and tell other doctors and their network about their experience. Good early traction in CiRT sales suggest that this strategy is working. From March until September the focus was on the Florida market where there are a lot of potential patients and in October a second salesperson was recruited to cover the Delaware/Maryland/Virgina territory. Plans are in place to add sales resource to cover New York, California, the Mid West and Texas and to recruit at least 1 healthcare system in 2023.
During 2022 there were 136 orders received for CiRT from 11 oncologists predominantly all in Florida. Sales were stable for the first 6 months before taking a dip in October, due to Hurricane Ian, before rising sharply in November to 21 tests and again in December to 28 tests. Tests ordered per business day also increased from a relatively flat 0.6 tests during the first 6 months to 1 test per day in November to 1.4 tests per day in December.
The sales momentum has continued into 2023 with 22 tests ordered up to the 20th January which equates to 1.7 tests ordered every working day. The number of doctors in the US ordering has increased by 4 to 15 doctors and 1 doctor from Turkey has also ordered tests. Two medical practices have more than one doctor ordering showing the impact of peer to peer, word of mouth marketing. The growth in the number of doctors ordering the test, reordering tests and in the overall number of tests ordered is very encouraging and bodes well for future orders. New doctors are also ordering in larger size now than new doctors at the launch of CiRT.
The test has a list price of $5,500 and the first reimbursements from insurance companies have been received in the $1700-$3000 range with an average to date of $2350. OBD think the test has a value of at least $2500 and any reimbursements below this level is banked and then appealed to get a higher sum.
The addressable market for the CiRT is very large, possibly larger than originally anticipated. The tests ordered to date have been used on patients across 25 different cancer indications. This is important as it suggests that doctors are willing to use CiRT across multiple indicators and more than just simply the 15 indications where there are 8 current checkpoint inhibitor drugs registered. The market size in the US is estimated at 500k new patients a year. A 1% share of this would be about 5,000 patients and this would generate revenues to the company of $12.5m - a substantial amount and just the first stage of market penetration. These revenues also generate gross margins of 90% and above.
The business development group has been on the road at many events building awareness of the benefits and use of CiRT. The team presented in Florida in November which was very well received. Dr Steve Manus presented at a virtual seminar in December and the approved reimbursement code was one of the factors that impressed the audience. OBD has also engaged with payor groups and the individuals there who determine the value of tests and what to pay for them. An initial virtual meeting in January is being followed up with a face to face advisory board meeting at the end of January.
Outside of CiRT there has also been good progress made with Mitsubishi Tanabe on their phase IV clinical trial for ALS. Episwitch biomarkers identify patients with ALS from other neurodegenerative conditions and can also determine which patients with ALS will have a fast or slow-progressing disease before they start the treatment. This is very important as it can take up to 12 months to see any progress from the treatment and by that time the fast progressors may have only a few months left. This is a massive opportunity for Mitsubishi and OBD going forward. These developments can take time but have the potential to be very rewarding when they do.
So in conclusion, the company is very encouraged by the early adoption of the CiRT and they will continue to push on this for further growth in 2023. There are early signs that the sales momentum seen in 2022 have continued into 2023 and the sales team will be expanded to grow sales in additional territories. Reimbursements for the test are being received at expected levels and are anticipated to build in 2023. The product development pipeline is very healthy and bodes well for the years to come and shows that EpiswitchTM works across medicines and across species. If there was a note of caution it was towards the ongoing discussions with large pharma companies which are taking more time to conclude. A MSA was signed with a large pharma company earlier in the year but unfortunately one of the champions at this pharma company retired and so discussions, whilst ongoing, have needed go back a few steps. The 2020 decision to build their own commercial engine around lab developed tests positions the company well to be the master of its own destiny and means OBD is not dependent on large pharma for its success.
All in all management were very upbeat about the prospects for the company going into 2023.
The recording of the webinar is available here.