Ottawa biotech startup Genomadix has cleared another major regulatory hurdle on the path to commercializing its rapid tests designed to detect genetic mutations that may cause heart patients to reject commonly prescribed drugs.
The company said this week it got the green light from the U.S. Food and Drug Administration to begin using its point-of-care PCR testing system on cardiac and stroke patients south of the border.
CEO Steve Edgett called it a “significant milestone” for Genomadix, which is trying to gain traction after the firm that originally invented the product collapsed amid a failed effort to adapt the device as a rapid COVID-19 test.
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“It allows us to start commercializing and selling this (in the U.S.),” Edgett said. “There’s a heightened level of excitement now, which is nice.”
The company’s flagship product, dubbed the Genomadix Cube, is a coffee cup-sized lab-in-a-box that is engineered to extract, amplify and identify genetic material in about an hour.
Developed by now-defunct Spartan Bioscience, the hand-held device can be adjusted to target different genes in an effort to detect a wide range of pathogens. Before the pandemic, it was used mainly to identify strains of legionella, the bacteria that cause legionnaires’ disease.
Now, Edgett and his team believe Genomadix is poised for a massive breakthrough in the U.S. after the FDA cleared the way for the Cube to be used to quickly determine whether patients carry genetic variations that might make drugs such as anti-platelet medication and antidepressants dangerous or less effective.
The company already has some high-profile partners as it prepares to ramp up its sales efforts.
Last year, it signed a multi-year deal with the renowned Mayo Clinic in Rochester, Minn., to work with infectious disease and point-of-care specialists at the clinic to brainstorm new testing technologies and map out a plan to best commercialize its products.
Edgett said the Mayo Clinic plans to start using the Cube to make sure heart patients are compatible with certain drugs. In addition, he said the firm is already in talks with other U.S. health-care facilities about using the device, adding he expects the Cube to be available in hospitals by this summer.
“We’ve got a list of other early adopters and key opinion leaders who are pretty excited about this,” he said. “We have, I’d say, a bit of pent-up demand (from) early adopters that are excited, so it should help us with introducing the technology and getting support (from) the market.”
The FDA’s decision comes a little over 18 months after Genomadix was born out of the ashes of Spartan Bioscience.
Co-founded by Ottawa medical researcher Dr. Paul Lem nearly 20 years ago, Spartan was doing less than $3 million in annual revenues when the pandemic struck.
Quickly pivoting its DNA-testing technology to detect the virus that causes COVID-19, the firm hoped to generate hundreds of millions of dollars in sales on the strength of surging demand for portable test kits that could easily be deployed in homes, doctors’ offices and remote areas.
But Spartan foundered when it was forced to recall the device after experts at the federal government’s National Microbiology Laboratory in Winnipeg discovered problems with its proprietary swabs. Although the company eventually retooled its tests, it never recovered.
Spartan entered creditor protection in 2021, and its assets and intellectual property were purchased by Ontario-based Casa-Dea Finance later that year. In September 2021, the newly launched Genomadix took control of Spartan’s assets and IP, with Casa-Dea as its main shareholder.
Genomadix, which has 48 employees, generated sales of about $2.5 million last year. Now that the Cube has the FDA’s stamp of approval for use on heart patients, Edgett says he expects revenues to double in 2023 and grow exponentially from there.
The CEO says Genomadix’s fundraising efforts will shift into high gear as it pursues a series-A round with the goal of bringing in US$25 million in fresh capital before the end of the year.
“We still have plans to grow significantly over the course of this year, but of course, we need to be financed accordingly to do so,” Edgett said.
The firm’s funding quest comes at a gloomy time for the biotech sector as companies that banked on continued demand for rapid COVID tests have seen a steep drop in sales.
Examples include Lucira Health, a U.S. producer of rapid COVID test kits that filed for Chapter 11 bankruptcy protection last month, and California’s Thermo Fisher Scientific, which announced in February it planned to lay off more than 200 workers after sales of its COVID-19 test products plummeted from more than US$9 billion in 2021 to $3.1 billion last year.
In addition, the tech industry as a whole is facing turbulence as the economy wobbles and the collapse of the Silicon Valley Bank reverberates throughout the sector.
“It’s not an ideal time to be looking to fundraise for a startup company,” Edgett admitted.
Still, he remains bullish on Genomadix’s prospects. The firm’s decision to shift its R&D efforts away from COVID testing and focus on “precision medicine” applications like the genetic tests for heart patients will serve it well in the long run, Edgett believes.
“Because we’re not in the infectious disease space and we’re focused more in the precision medicine space, we have a unique story,” he said.
Meanwhile, Genomadix is also eyeing another, potentially even more lucrative, revenue stream: partnerships with other companies that will license the Ottawa firm’s technology to develop tests tailored to fields like food safety and veterinary medicine.
“That’s what will really act as a significant driver of revenue growth in the future,” Edgett said, adding his firm is already in “early discussions” with a couple of leading organizations in those spaces.
“We see that (licensing agreements) actually could be bigger than everything else combined very quickly.”
