NEW YORK – Urology diagnostics firm MDxHealth is integrating its recent acquisition, the Oncotype DX Genomic Prostate Score previously owned by Exact Sciences, confident that the assay will allow it to achieve a longstanding goal — providing a comprehensive assay menu that covers the full range of crucial decision points in the prostate cancer treatment journey.
The company spent $25 million in cash to bring on the GPS test and its associated sales team last month. The deal also included the delivery of 691,171 American depositary shares worth approximately $5 million to Exact, while additional milestone payments over the next three years could total another $70 million.
MDxHealth CEO Michael McGarrity said that preparing the company for this type of transaction had been a primary mission for him after assuming his role in 2019.
When he joined the company, it was clear that the firm's laboratory, its foundational technology, and its expertise in CLIA lab operations and payor coverage were all strong. "What was required was a real turnaround, restructuring on the operating discipline and commercial execution side, so we've really focused in those key areas, and that really served as the basis and foundation for making an acquisition like this," McGarrity said.
In the prostate cancer testing space, MDxHealth had already been marketing two core assays for several years, ConfirmMDx, a tissue-based methylation test intended to identify patients whose biopsy was negative but who likely still had prostate cancer, and SelectMDx, a urine-based risk assessment assay intended to inform whether individuals with high PSA results need a biopsy or can continue yearly screening.
These two tests fit neatly with one another, with SelectMDx informing the decision to biopsy or not, and then ConfirmMDx offering additional guidance in those who do get biopsied and have a negative result. "Thirty percent of negative prostate biopsies are false negatives [so] you're likely to be told you still have a one-third chance of having cancer, and to come back in nine to 12 months for a repeat biopsy," McGarrity said. ConfirmMDx can help avoid these repeat biopsies when they are unnecessary by identifying likely true negatives.
But prior to the GPS acquisition last month, the company didn't have a test that served the population that receives a positive result from their biopsy.
"What the acquisition of the business from Exact does is we are now the only company that can provide both paths after biopsy. If it's positive, we're going to run a GPS test. If it's negative, we're going to run a Confirm test," McGarrity said.
"We believe this makes so much sense for our business," he added, "to be able to position ourselves for a urology practice [as] one laboratory that … can cover all these decision points."
McGarrity said that MDxHealth isn't providing volume or revenue guidance for the GPS test apart from estimating about $13 million in revenue from the assay for the remainder of this year. But he said that test volumes of about 20,000 units annually for each of its now three assays would be a good ballpark figure to expect going forward.
Last year, the firm's billable test volume for ConfirmMDx increased 3 percent over the prior year to 15,324. SelectMDx billable volume rose 3 percent to 13,615.
Most of the company's revenue has traditionally come from the ConfirmMDx assay, which is covered by Medicare under a local coverage determination in place since 2018. SelectMDx has not been previously reimbursed, but will soon be under a foundational, or non-test-specific LCD finalized by CMS contractor Palmetto GBA this May.
Oncotype DX GPS is also already covered by Medicare, but its approved indications — for low risk and favorable intermediate risk prostate cancer — are more limited than for one of its prominent competitors, Veracyte's Decipher Prostate assay, which is covered regardless of tumor stage for both biopsy cases and in patients who have had a radical prostatectomy.
McGarrity said that MDxHealth believes it can gain similar expanded coverage and guideline recognition for the GPS test based on solid foundational data that came over with the Exact acquisition.
Furthering its vision of being a one-stop shop in the prostate cancer diagnosis and treatment journey, MDxHealth is also working on a fourth addition to its menu, MonitorMDx. A liquid biopsy assay, Monitor would offer a noninvasive surveillance alternative to the current active surveillance standard of yearly repeat biopsies, which can be a hard sell to the men who are prescribed the procedure.
"We believe we can deliver either a urine or blood test to the market and complete the full diagnostic pathway menu," McGarrity said, adding that the active surveillance landscape is about 1.5 million patients annually. "That's a large underserved market that we are confident based on our biomarker experience that [we can deliver on]," he said.