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Xenomics, Inc. (XNOM) |
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CEOCFO
Interview Index |
This is a printer friendly page! Xenomics is offering a near term, safe
and non-invasive technology for women who need prenatal genetic testing that may be two
thirds the cost of the amniocentesis procedure currently on the market Phone: (212) 297-0808 BIO: CEOCFOinterviews: Dr. White, what attracted you to the Xenomics? Dr. White: “I have been CEO for two months. The difficulty for molecular diagnostic companies these days is that even though the market itself is about 1.5 billion in revenue potential, ninety percent of that revenue is controlled by one of the big five, which would be Roche, Abbott Laboratories (NYSE: ABT), Bayer (NYSE: BAY), Digene Corporation (NASD: DIGE), or Gene-Probe Incorporated (NASD: GPRO). That leaves about ten percent or 150 million dollar market to exploit on behalf of about ten companies, so it is difficult to get a position that will make those companies profitable. When I heard about Xenomics, I drew an assignment to do a technology assessment and my first thoughts were ‘great, another genomics company, just what the world needs’. When I got here and looked under the hood at the engine and saw the breadth and the depth of this technology, the one thing that was inescapable was that Xenomics creates new markets that are today not molecular and those new markets are at least double if not triple the size of the existing size of the market.” CEOCFOinterviews: Will you tell us more about this? Dr. White: “There was a discovery years ago that Xenomics filed patents on and three of those patents have now been issued and other patents are still pending but are expected to issue. That was the phenomenon of trans-renal DNA. The kidneys are a very elaborate filtration device and this device is designed to keep big molecules on the inside of the body and let soluble molecules go out into the urine. No one really expected DNA to be in the urine because it is very large molecule, but in fact it is and it is there in abundance and in layman’s terms, small pieces. But, those small pieces are large enough that they can be used for diagnostic purposes.” CEOCFOinterviews: What are you doing about the discovery? Dr. White: “We’re applying our technology to solve existing problems. For example, a problem that exists today is with the amniocentesis procedure. Women who are at risk are usually over thirty-five, and when they are recommended to have this procedure there is a very low compliance rate. Only one in eight women go through it because of the risk. They take a very large needle, and put it into the abdomen of the woman and pull out amniotic fluid and then the laboratory harvests the cellular material that is in that fluid and examines it for birth defects. In a certain sense, it is a barbaric procedure with a 1% chance of spontaneous abortion, fetal damage, or infection. We’re in the 21st century and you would think we can do better than that and Xenomics can. What we are able to do with our technology is perform those same tests, but with a safe and simple urine collection. During pregnancy the placenta is acting like a third kidney; it is dialyzing the DNA turnover inside the amniotic sack. It appears then as fetal DNA in the mother’s circulatory system, and it passes through the kidneys and ends up in the mother’s urine. We have the ability with a simple urine collection, and no needles involved, to extract fetal DNA from the mother’s urine and perform the same tests that you would with the very risky amniocentesis procedure. That is only one of the examples.” CEOCFOinterviews:
Please, give us a look at the company from the CEO perspective. CEOCFOinterviews: So how do you do that? Dr. White: “We do that in a standard traditional way. I have a long history of putting product on the market. In two years at Nanogen, Inc. as CEO, I put seven products on the market. In my history with American Medical Laboratories Inc. and National Health Laboratories, Inc., I developed more than one hundred different products. I would not say that it is easy but I would say that it is straight-forward. There are rules to be followed and as long as you follow those rules, you should have no difficulty.” CEOCFOinterviews: Who does the testing of the urine? Dr. White: “We sell product to medical laboratories, both private, public and governmental laboratories. They are the ones that actually use the product and perform the tests.” CEOCFOinterviews: In which area do you start? Dr. White: “We are having a board meeting on Monday and I am laying out for the board a variety of first products. The board will decide on Monday which of those will be our first product. As I said before, what attracted me to Xenomics was the breadth and depth of their technology. Literally, there are so many first products available to us; the question is which one? We are looking for the one that will best showcase our technology. My own personal feeling is that it is in prenatal diagnostics by collecting fetal DNA from maternal urine.” CEOCFOinterviews: How do you approach people with this? Dr. White: “Obviously, we do as much marketing as we can and pre-market marketing. The story is so compelling; if we have sensitivity and specificity, essentially equivalent to today’s technology, which involves needles and taking amniotic fluid, it is such a compelling story that we believe that there will be a demand for our product. Another way that we stimulate demand for the product is that an amniocentesis test today, runs about twelve hundred dollars and we are going to market this test to laboratories at a price that will allow labs to offer the test for around four hundred dollars. By reducing the cost two thirds by having a safe non-invasive risk-free sample, and by having high sensitivity and specificity, we believe that we can make the medical insurance carriers and the governmental payers our best friends because we save the healthcare system money. If you look at all those things, I think the market acceptance is well assured.” CEOCFOinterviews: Your experience should help you navigate through all of this! Dr. White: “I hope so!” CEOCFOinterviews: If women knew this was available wouldn’t they be beating down the door for it? Dr. White: “ Of course they would! One of the strongest ways to market the product is to get the story out to the public. If you gave a woman a choice of collecting a urine sample or undergoing a very risky procedure where they put needles through their abdomens, I think women ten out of ten would accept urine tests given that the same sensitivity and specificity are there. That we won’t know until we take this next walk. That is the risk to the company, whether we can put a product on the market. I feel confident that we can based on the proof-of-principle demonstrations that we have done. I will give it to you this way; we chose to collect urine samples from the several hundred women that we ran our proof-of-principle statements on at seven weeks. The reason we chose seven weeks is because fourteen weeks is about the earliest that you can do amniocentesis. What we didn’t do and in hindsight wish we had but will now do as we continue to develop product, is to collect even earlier samples because we don’t know yet what the earliest is that we can pull fetal DNA out of the urine. We know that at seven weeks we find it in abundance. It may be possible that at as early as three, four or five weeks we find it. These are studies that have to be done and then the second thing that needs to be done is the repetitive build-up of our clinical database to absolutely determine what our sensitivity and specificity is. These aren’t necessarily easy but they are straight-forward.” CEOCFOinterviews: Please tell us about funding for this development. Dr. White: “We are expecting to close our next round of funding in about three weeks and that will give us sufficient operating capital to get through our proof-of-product stage. We will do one more round of funding prior to stepping over from the research and development segment of the company into the productization portion of the company. That financing, will be to implement all of the FDA regulatory processes that are required to bring a product to market.” CEOCFOinterviews: Why should investors be interested now and what should they expect going forward? Dr. White: “They should be interested now because Xenomics creates new molecular markets. In my corporate presentation I say, “molecular diagnostics boom or bust” and I think if you ask ten people on the street, nine of the ten would say it is bust; I would be one of the nine telling you it is bust. The reason that an investor should be excited about Xenomics is because Xenomics with the breadth and the depth of our technology brings the real boom to molecular testing.” disclaimers |
When I heard about Xenomics, I drew an assignment to do a technology assessment and my first thoughts were ‘great, another genomics company, just what the world needs’. When I got here and looked under the hood at the engine and saw the breadth and the depth of this technology, the one thing that was inescapable was that Xenomics creates new markets that are today not molecular and those new markets are at least double if not triple the size of the existing size of the market.” - Dr. Randy White |
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