A few years ago, AspenBio Pharma (NASDAQ:APPY) was an animal health company struggling to navigate its way through commercialization of a human diagnostic test. Now, post-pivot with an updated management team, it may be on the brink of a rebound.
AspenBio is gearing up for a 2,000-patient pivotal study of a blood test that would help emergency room physicians rule out appendicitis in children with abdominal pain.
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The problem is that in appendicitis, the appendix can rupture and spill infectious material into the abdomen, so quick removal is needed after the onset of symptoms. But the symptoms like stomach pain, nausea and abdominal swelling can point to a whole host of other problems as well. So doctors use physical exams, blood tests, ultrasound and CT scans in various combinations to decide whether they need to perform surgery.
According to a study published last year in the Annals of Emergency Medicine, the number of young patients diagnosed with appendicitis using CT scans rose dramatically from 1996 to 2006. But there are concerns about such a high dose of radiation being dangerous to children, and about the time it takes to get CT results potentially delaying surgery. Ultrasound, meanwhile, delivers less radiation but has demonstrated slightly lower specificity and sensitivity rates.
AspenBio says its blood test can give doctors an answer as to whether a patient has a low chance of appendicitis in a matter of 45 minutes or less. Performed in a hospital lab, AppyScore looks for three biomarkers: AspenBio’s patented MRP 8/14 and the existing C-reactive protein biomarker and white blood cell count.
The test, which CEO Steve Lundy said would cost probably around $80 per run, is contained in a small bioanalyzer device and uses an algorithm to calculate a score from 1 to 10. A score of less than 4 is considered negative, he said.
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“The negatives are the ones that (doctors) will find useful in deciding to treat more conservatively, rather than sending them to imaging,” he said.
In a 500-patient pilot study in which 29 percent of patients ended up having appendicitis, AppyScore correctly identified 97 percent of those who did not have it. To follow up that study, the company has designed a pivotal trial that will begin in December to support a PMN in mid-2013.
This won’t be AspenBio’s first lap around the U.S. Food and Drug Administration clearance track. Back in 2009, the company filed a 510(k) application for AppyScore, but the trial it hinged on showed sensitivity of less than 90 percent and the FDA wanted more information to show that the test’s negative predictive value was significantly higher than that of other diagnostic tools. Another trial ensued and then another, pushing back the company’s timeline even further.
The leadership at the time, Lundy said, didn’t have a good grasp on what it took to bring human products to the market. The Castle Rock, Colorado, company was originally founded to develop protein-based pharmaceuticals for animals. It would later shift its focus to human diagnostics after a surgeon approached company leaders with an idea for a protein-based assay for appendicitis.
Lundy, previously CEO of diagnostics company MicroPhage, was brought on board about three years ago. Under his leadership, the team turned the single-biomarker AppyScore into a multibiomarker test and made its commercialization their prime focus, out-licensing AspenBio Pharma’s entire animal health portfolio. Pending shareholder approval next month, the company plans to ditch the now-misnomer in favor of the name Venaxis. In the meantime, shares have plunged (read a good analysis from one shareholder here).
Despite those setbacks, Lundy talked confidently about AspenBio’s timeline moving forward. He said the company has just completed an offering that will net about $3.6 million, in addition to the $10 million in cash it already has — plenty to carry it through the pivotal trial, FDA submission and early commercialization. Manufacturing is in place and he anticipates a CE Mark and European launch by the end of the year.
“One of my philosophies is that products don’t just market themselves,” he said. “A lot of companies get some studies done but don’t have enough commercial traction to really get market share quickly, and investors get very impatient. We’re going to do market development in advance to the product being ready for commercialization.”
If everything goes as planned, the pivotal trial will run through the first half of 2013, followed by a PMN and U.S. launch shortly thereafter.
[Photo from AspenBio Pharma]
