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Courtagen Closes Genetic Testing Business, Citing Regulatory, Reimbursement Challenges

This article has been updated with additonal information from Courtagen Life Sciences and Medicinal Genomics.

NEW YORK (GenomeWeb) – Courtagen Life Sciences said today that it has closed its diagnostic neurology testing business. According to the firm's website, it no longer accepts patient samples. 

The company's wholly owned subsidiary, Medicinal Genomics Corporation (MGC), which provides cannabis genetics research and testing, will remain intact and Courtagen is taking on this name.

The closing of the diagnostics business resulted in layoffs of 52 employees in July, according to a company official. Medicinal Genomics currently has 23 employees and several consultants.

The Woburn, Massachusetts-based firm cited a challenging regulatory and reimbursement landscape as a factor for its decision to exit diagnostics. These challenges "have made the goal of achieving long-term profitability in the diagnostic space extremely difficult," according to a company statement. "Despite significant scientific advancements, the current financial status and incentive structures of the US healthcare system are not aligned with optimizing such scientific advancements to ensure patients are receiving the highest quality of care."

Courtagen had been offering next-generation sequencing-based genetic tests for developmental delay, intellectual disability and autism spectrum disorders; epilepsy and seizure disorders; and mitochondrial disorders. Its laboratory held CLIA certification and CAP accreditation.

Earlier this year, the company had expanded its testing menu, adding 10 new gene panels for neurology and endocrinology, and said that it was expecting to add further tests over the course of 2017.

Courtagen officials did not respond to requests for comment on what will happen with the patient data.

Courtagen started in 2010, when Courtagen Capital acquired the assets of Decision Biomarkers, a protein biomarker technology firm, and renamed it Avantra Biosciences, changing the name later to Courtagen Life Sciences.

Courtagen and Medicinal Genomics CEO Brian McKernan, a managing partner of Courtagen Capital, was previously the CEO of Agencourt Biosciences, which Beckman Coulter acquired in 2005 for $140 million. His brother Brendan McKernan serves as president and director of the companies, and his other brother Kevin McKernan is the firms' CSO.

In 2012, Courtagen acquired Medicinal Genomics, which was founded by Kevin McKernan and had been studying the genomics and medicinal use of cannabis, for an undisclosed amount.

Two years ago, the company raised $20 million in a private financing round that included existing investors Harbor Light Capital and Adler & Co., as well as new investors Bunker Hill Capital, First Analysis, and others.

Going forward, MGC will focus on helping cannabis growers and scientists to identify desirable genetic traits of interest and to detect harmful microbes, with the goal to increase crop yields, sustainable productivity, and safer cannabis.

The company said it is the industry leader in sequencing the cannabis genome and the genomes of the most destructive cannabis pests, such as Powdery Mildew and Russet Mites. It has developed field-portable genomic tests, a Cannabis genotyping notarization service, and a marker-assisted selection service, and it provides intellectual property management through its cannabis information portal,