Mayo’s Relationship With Anti-Cancer Biotech Firm Revealed
The first commercialization fruits of a joint venture between the Mayo Clinic’s individualized medicine program and a New Jersey-based anti-cancer biotech firm are about to be realized, and with it, more financial details about their privately-held collaboration have been revealed.
The company, Cancer Genetics Inc. (Nasdaq: CGIX), indicated in SEC filings last week it will release a genetic blood test panel for multiple myeloma into general clinical use during the second quarter – the first tangible results of its partnership with Mayo Clinic in OncoSpire Genomics LLC, the joint venture formed three years ago in Rochester.
OncoSpire taps the expertise of genetic sequencing researchers at Mayo’s Center for Individualized Medicine and its Biomarker Discovery Program, who are leading the charge in finding ways to tailor cancer treatments for patients based on readings of their individual genomes. Clinic officials have touted the potential of next-generation genetic sequencing as “transformative” in the battle against cancer.
Cancer Genetics stated in its first-quarter report released last week that Oncospire’s multiple myeloma blood test panel, dubbed M3P, “will be launched for routine clinical usage” in the second quarter, after previously being limited to use in clinical trials conducted by biotech and pharmaceutical companies.
The development is a milestone for Mayo’s venture with Cancer Genetics. The latter firm was founded by renowned geneticist Raju Chaganti of the Memorial Sloan Kettering Cancer Center and went public in 2012.
When OncoSpire was launched the next year, Mayo officials declared its aim was to develop and commercialize genomic tests initially focusing on hematological and urogenital cancers, and potentially other cancers as selected by a scientific review committee. Its first target is multiple myeloma, a hematological cancer formed by malignant blood plasma cells.
At OncoSpire’s kick-off, both parties expressed big hopes about its potential, calling the effort part of a “paradigm shift in (cancer) patient management” made possible by Mayo’s technical expertise in creating more efficient ways of sequencing patients’ genomes. Indeed, they said, what originally took $3 billion over 13 years for the Human Genome Project (the first human genome sequencing) now can be accomplished for “a few thousand dollars in a matter of days.”
“A major factor behind our decision to work with Mayo was the depth of their world-class clinicians and thought leaders, who we believe are in a position to drive clinical value and clinical adoption for the tests being created by OncoSpire Genomics,” Cancer Genetics CEO Panna Sharma said at its launch.
At the time, however, no financial details of the 50-50 partnership were revealed. That changed last week when Cancer Genetics indicated it has finalized its commercialization arrangements with Mayo as it prepares for the M3P release, and reported some of the provisions.
According to the filings, the affiliation between the two entities was actually established in November 2011, two years before Oncospire’s official launch. Mayo’s financial contributions for its half-ownership stake totaled $6 million, taking the form of cash, staff, services, hardware and software resources, laboratory space and instrumentation. Mayo also received 10,000 shares of CGIX stock as part of the 2011 affiliation agreement.
Meanwhile, Cancer Genetics has so far contributed $2 million in cash and is committed to kicking in $4 million more over the next two years. It reported it is raising the necessary capital as part of a $12 million secondary stock offering floated last year.
The company says it “currently anticipates” it will make a $1 million capital contribution to OncoSpire in the second quarter, adding, “The timing of the remaining installments is subject to the (joint venture’s) achievement of certain operational milestones agreed upon by its board of governors.”