NEW YORK – After a bumpy year marked by layoffs and restructuring plans, esophageal cancer diagnostic firm Lucid Diagnostics has fresh data in hand and a renewed focus that it hopes will set the company back on the right track.
The New York-based company has seen its share of difficulties since it went public in 2021 in a $70 million initial public offering. In Q2 and Q3 2022, it missed consensus analyst revenue estimates, and in Q4 2022 its revenues declined 63 percent year over year. In January, its parent company PAVmed announced that it would lay off 20 percent of its employees, including those from Lucid and fellow subsidiary Veris Health, and streamline product portfolios in an attempt to lower quarterly cash burn by at least 25 percent.
However, the firm has seen bright spots in the past few months. In the most recently reported quarter, Q1 2023, revenues more than doubled and Lucid performed triple the number of EsoGuard Esophageal DNA tests compared to the prior-year quarter. In addition, earlier this month the firm and academic collaborators presented new data at the Digestive Disease Week conference that Lucid says supports the clinical value and utility of both its EsoCheck Cell Collection Device and the EsoGuard test.
EsoGuard works in tandem with EsoCheck, and both are intended to noninvasively screen for precancerous conditions for esophageal adenocarcinoma in at-risk populations, including Barrett's esophagus (BE). Both technologies were licensed from Case Western Reserve University, and EsoCheck has received 510(k) clearance from the US Food and Drug Administration and CE marking. The EsoGuard test has also received CE marking.
The device consists of a capsule with a balloon on the end of a silicon catheter string that the patient swallows. When it reaches the stomach, the balloon is inflated, and as the device is pulled back up through the esophagus, the balloon captures cells from a targeted area of the lower esophagus and then deflates into the capsule, protecting the sample.
The test, meantime, uses DNA bisulfite conversion, PCR amplification, and next-generation sequencing to determine the methylation status of 31 sites in the vimentin and cyclin A1 genes, which indicate BE. An algorithm can then be used to calculate the percentage of DNA molecules where proportions of methylated sites on either gene exceed specific thresholds. If the thresholds are exceeded, the test is positive for either BE or a more advanced condition.
Although BE is treatable, screening for the disease is poorly applied across healthcare because the main method used is endoscopy, which is highly invasive, Lucid CSO Suman Verma said. Providing a noninvasive screening method that can be applied broadly to at-risk populations is "very, very important."
In one study, presented at the conference by gastroenterologist Katarina Greer from Case Western Reserve University, researchers used EsoGuard on 69 patients from the Louis Stokes Cleveland VA Medical Center, detecting seven with esophageal precancer or cancer for a sensitivity of 100 percent. All but one of the 69 patients used the EsoCheck device successfully, and the data suggests the test and collection device were "acceptable to the majority of participants with multiple risk factors for BE and could be used as a first-line non-endoscopic screening test in high-risk populations," according to the abstract.
Six of the seven patients detected by the device had early precancerous non-dysplastic BE, and four of those patients had short-segment BE, which is located in an area of less than 3 centimeters. It is "very difficult at that stage to pick up the disease because it is a focal disease, it is not everywhere," Verma noted.
In a separate real-world study by the company, also presented at the conference, 1,483 patients underwent the EsoCheck collection procedure. Two percent of patients were unable to complete the procedure and provide enough DNA for biomarker testing, while 88 percent tolerated it well and 10 percent experienced severe gagging but were able to finish collection.
The new data on test sensitivity and collection tolerability will help Lucid continue to build its case for contracting with payors and encourage adoption by clinicians, Shaun O'Neil, the company's chief commercial officer, said. The data "affirms … why [doctors] would want to offer that test in their offices and in their practices" and is a "step in the right direction," he added. Thus far, the company has in-network contracts with nearly 15 payors and its LucidDx Labs has entered into participating provider agreements with preferred provider organizations Prime Healthcare, Three Rivers Provider Network, and Galaxy Health Network. It has also entered an agreement with specialized diagnostic laboratory network Alivio Health under which patients covered by clients of the four networks can access EsoGuard.
The company also continues to submit insurance claims on a case-by-case basis and adjudicate claims as payors respond to them, O'Neil said. The company is also working with the Centers for Medicare and Medicaid Services to gain coverage for the assay.
Despite the layoffs and restructuring, O'Neil said that the overall commercial strategy of the company hasn't changed. The firm plans to continue educating mostly primary care providers on BE and the company's test, with O'Neil emphasizing that the BE disease state is "very well defined but not really well talked about … in practice, it's just kind of glossed over." The firm is working to ensure patients with positive test results are appropriately referred to specialists, but also working directly with gastroenterologists and surgeons to raise awareness of the test, he said.
Lucid also dabbles in direct-to-consumer advertising, but until its payor coverage is more widespread, it has mostly put that on the back burner to focus on provider education, O'Neil said.
The firm is seeing benefits from its education campaigns and large screening events, which have driven uptake of the test and helped boost revenues significantly in Q1 2023, O'Neil said. He noted that Lucid is well capitalized into 2024, and recently raised $24.6 million through separate offerings of preferred stock and debt.
Beyond the Digestive Disease Week studies, the company has four additional clinical utility studies and one clinical validity study in progress. It also has independent trials and plans to continue initiating studies and building up its data, he added.
Lucid is also working on other products, including a test to risk-stratify patients that may develop esophageal cancer, Verma said. In addition, it is exploring other ways to use its technology, like utilizing precision oncology biomarkers to guide therapy selection, she said. It had also previously been developing the EsoCure Esophageal Ablation Device, but when announcing the January layoffs, the firm said it would pause development of that device.
Essentially, the company is prioritizing EsoGuard commercial and clinical research efforts, O'Neil noted. "Everything else is secondary to that."