Transgenomic Tries to Jumpstart Business Model Again

A shrunken and struggling Transgenomic will attempt to greatly expand its line of molecular-based cancer tests in the coming months in an attempt to jumpstart growth again.

The Omaha-based molecular lab said it would focus on greatly increasing the detection power of its primary testing platform, Multiplexed Improved and Complete Enrichment Co-amplification at Lower Denaturation temperature, known as ICECOLD PCR. The platform focuses on amplifying mutant DNA particles at greater rates than non-mutant particles. It was introduced early last year.

Transgenomic said the test would be expanded to cover more than 200 different types of DNA mutations over the next 18 months, with about 10 new mutations introduced every six to eight weeks.

.In addition to expanding its portfolio of products, Transgenomic Chief Executive Officer Paul Kinnon believes there is a change in the business environment to potentially exploit.

“Transgenomic believes ... testing for liquid biopsies and precision medicine will move away from large centralized labs toward distributed labs in large and medium-sized medical centers, fueled by the continued adoption of next-generation sequencing platforms and improved bioinformatics systems, the desire to treat and diagnose patients more efficiently and faster, and with the restrictions and delays faced by large centralized labs in obtaining reimbursement from public and private insurers,” he said in an email. “We believe these trends support our commercial strategy of broadly granting access to our ICE COLD-PCR products to a wide variety of partners, thereby enabling broader adoption of precision medicine as part of a decentralized model.”

The company declined to disclose any current volume data, or projections of how the ambitious expansion of its testing platform would affect future volumes.

Meanwhile, Transgenomic is operating in an environment that has been decidedly hostile to its business operations. Its revenue for the first quarter of 2016, just $200,000, was $500,000 less than the first quarter of 2015. The company also posted a loss of $300,000. In 2011, its revenue was nearly $32 million. Last year, it decided to shut down its genetic assays and platforms business, focusing instead on licensing its technology. Last March, it announced it had suspended all patient testing at its facility in New Haven, Conn.

The company disclosed in a recent filing with the Securities and Exchange Commission that its stock was in danger of being delisted from the NASDAQ exchange for being below minimum shareholder’s equity requirements. Transgenomic has filed a plan of correction that earned it another 180 calendar days before a delisting might occur; the earliest date that can now occur is Oct. 17.

Transgenomic’s stock is currently trading at about 58 cents per share, down from more than $1.70 a share less than a year ago. Few investment banking firms cover the stock, but recent reports suggest that short positions against Transgenomic have decreased by more than a third in recent weeks.

Takeaway: A struggling Transgenomic is trying to make a spirited expansion of its products in order to return the company back to a growth mode.