NEW YORK (GenomeWeb) – Interleukin Genetics on Monday announced that it would suspend its genetic testing program for severe gum disease and elevated systemic inflammation over the next 60 days after it was unable to defer a debt payment.
The Waltham, Massachusetts-based firm said it would also lay off five employees, or 63 percent of its current workforce. The decisions come as the company pursues strategic alternatives, Interleukin CEO Mark Carbeau said in a statement.
The company is $5.6 million in debt, including $4.9 million in accounts payable and contract severance obligations. Interleukin could not secure a clinical services agreement that satisfied its senior lender Horizon Technology Finance, and was unable to extend deferral of its debt payment according to arrangements the company made with Horizon in April, the firm said.
As a result, Interleukin is shuttering the Ilustra Inflammation Management Program, "and will suspend test processing over the ensuing approximately two months," the firm said.
Previously, Ilustra was called PerioPredict, which gauges polymorphisms in IL-1 genes, and Interleukin marketed it as a test to identify individuals at risk for severe gum disease. But last year the company rebranded the test as Ilustra and began marketing it more broadly as a test to identify people at high risk for "elevated systemic inflammation," which the company claims will enable early identification of those at high risk for chronic diseases associated with inflammation, such as periodontitis, heart disease, and diabetes.
Despite a peer-reviewed, published analysis two years ago that concluded that PerioPredict lacked clinical validity to assess risk of periodontal disease, the company has continued to market the test to large self-insured employers and insurance carriers.Â
In April, the American Dental Association published a summary of evidence on genetics and oral health, in which its Genetic Testing Workgroup wrote that a "predictive test for dental caries or for periodontal disease does not currently exist; both of these are complex diseases with multiple gene and environmental risk factors."
The US Food and Drug Administration sent a letter in 2015 to Interleukin asking why the company was marketing the test without its clearance. However, after discussions with the agency, the company has been allowed to continue to market the lab-developed test though Interleukin's CLIA-certified lab and without the agency's green light, according to the company's 10-K filing with the US Securities and Exchange Commission.Â
Meanwhile, several Delta Dental plans have been using the genetic test as part of risk assessments to determine the number of covered cleanings employees can receive per year, and Amway agreed last year to offer the test to its 5,000 employees as part of a wellness program. Delta Dental Plan of Michigan invested $3 million into the company in 2012 and held a seat on the company's board of directors until 2014. And Pyxis Innovations, a subsidiary of Amway parent company Alticor, is a major stockholder. Current and former employees of Alticor hold seats on Interleukin's board.
As of June 30, Interleukin said it had $925,000 of cash on hand. The company said it is exploring strategic alternatives such as other business opportunities, collaborations, liquidation, as well as sale of the firm and its assets, including its CLIA-certified lab, Ilustra, tests for cardiovascular disease and osteoarthosis, as well as wellness and weight loss genetic tests under the Inherent Health brand.
Interleukin estimated that its restructuring efforts will amount to $245,000 in expenses, associated with paying severance and suspending its testing programs. As a result of these events, the company said it would not be able to file its 10-Q filing for the three months ended June 30 on a timely basis.