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Oncimmune continues to make 'good progress' in first half
Early cancer detection company Oncimmune Holdings issued an update to the market on is business on Tuesday, ahead of the announcement of interim results expected on 13 February.
The AIM-traded firm said that, since the publication of its full year results in October, it continued to make "good progress" against its commercialisation plans.
On its EarlyCDT-Lung product, the board said it commenced a marketing programme in the US to support its distributors.
"However, as stated in our results we continue to be cautious in terms of near-term revenue growth from this channel as positioning the test is key to long-term success," it said in its statement.
"We anticipate that sales will start to build post the end of this financial year as distributors prime their local-market place."
In November, the company launched a simplified blood sample collection procedure using a 'finger stick', which it said increases the speed and simplicity with which the EarlyCDT-Lung test could be ordered and completed, with no loss of performance.
The introduction of this alternative to full blood draw was described as "timely", as a new interpretation of the regulations had resulted in an increasing number of distributors requiring Oncimmune to enter individual direct contracts with each institution where blood is taken.
Those contracts are taking in the region of two to three months to execute.
"Over time we expect 'finger stick' collection to make the test more accessible, but currently a significant proportion of the market still relies on blood draw," the board explained.
"This requirement for individual contracts has had an impact on the speed with which we are able to build sales and show traction from our sales and marketing strategy."
On its pilot pulmonology distribution project, Oncimmune said its partnership with an unnamed major US pulmonology sales force was progressing well.
It said that while the changes to regulations around blood draw had impacted timelines, it still expected the project to complete in the next two months, and if successful should lead to a distribution agreement covering a "significant proportion" of pulmonologists in the US.
Results so far had been encouraging, it stated.
The company was also continuing to explore further pulmonology distribution channels in the US with other parties and, since the announcement of the pilot study, had seen further interest from potential partners active in the pulmonology space.
Further afield, the company had announced the signing of a framework agreement for an exclusive licence with Genostics Company, a Hong Kong-registered company part of the Gene Group Holdings group, earlier in January.
The firm said the agreement was for the distribution, manufacturing and future development of all products related to Oncimmune's EarlyCDT platform for the People's Republic of China.
Under the terms of the licence, Oncimmune would receive a royalty of 8% to 12.5% on the gross revenue, subject to aggregate minimum royalty payments over the first six years post-market entry of £15.7m, and £5m index-linked per year thereafter.
Genostics would start to sell EarlyCDT-Lung within 36 months of the date of the agreement, subject to China FDA approval, although both parties expected that to occur sooner.
"We are today announcing a new distribution agreement for Turkey," the board added.
"The exclusive distribution agreement with Biruni Laboratuvari in Istanbul is for three years in the first instance, with minimum sales commitments of £0.63m."
The company said Turkey was a major market for Oncimmune, with nearly 19 million smokers.
Approximately 14 million CT scans are also performed in Turkey each year, and therefore a large number of lung nodules were detected annually.
That creates a "significant" unmet medical need in risk assessment of intermediate pulmonary nodules that the EarlyCDT-Lung test could address.
Having also signed an agreement for Iran in November, Oncimmune now had a total of six agreements in place for the Asia-Pacific region, not including the China deal, with minimum committed revenues of £8.0m over the next five years.
In Europe, the total was £2.1m over the same period.
Oncimmune also reported that its research and development programme was continuing to progress.
"We have completed validation of the commercial panel for the EarlyCDT-Liver test, and remain on track to begin commercial sales in the first half of 2018," the board said.
"We also continue to progress our work in companion diagnostics with studies in progress alongside drug development programs and in fingerprinting."
The first published set of results from its Scancell collaboration had been received positively, it reported, and the company planned to continue to pursue both areas over the next year.
Oncimmune's directors concluded that the firm was continuing to deliver on its plan to create value from its core autoantibody platform, adding that it was "increasingly confident" that the company was well-placed to execute that plan and deliver value in the medium and long term.
"The recent period has seen us continue our strong progress in delivering on our strategy to generate revenues across multiple products, regions and with different partners," said CEO Geoffrey Hamilton-Fairley.
"We have entered into a distribution and product development agreement in China which includes a contracted £10m equity investment and £15.7 million in minimum royalties.
"Today we also announce a new distribution agreement for Turkey which brings our total number of agreements in Europe and the Asia Pacific region to 12 with total minimum sales commitments of £25.6m."
Hamilton-Fairley said the company was continuing to be "very confident" of delivering value in the medium and long term.
Oncimmune was scheduled to report interim results for the half-year to 30 November on 13 February.