Tm Biosciences says it will need additional growth capital to drive products toward commercialization

By Jennifer Lanning Drey

Eugene, Ore., Aug. 15 - Tm Bioscience Corp. foresees the need for growth capital to pursue its regulatory drive, continue to submit products to the Food and Drug Administration and develop new markets for its Respiratory Viral Panel (RVP) and sepsis tests, said Greg Hines, president and chief executive officer of Tm Bioscience, in a conference call.

Possible opportunities for the company include out-licensing of existing products or co-development agreements for new products, said Hines during Tm Bioscience's quarterly earnings conference call held Tuesday.

"We continue to pursue potential partnership agreements that would enable the company to secure additional resources in a minimally dilutive fashion," Hines said in the call.

Tm Bioscience also announced Tuesday that it has executed a debenture financing agreement that will produce gross proceeds of $6.2 million for the company.

The company's existing products helped generate $3.1 million in revenue during the second quarter, compared with $2.1 million during the second quarter of the previous year.

Net loss for the quarter was $4.6 million, or $0.09 per share, compared with a net loss of $3.7 million, or $0.09 per share, for the corresponding period in 2005, according to a company news release.

In the future, Tm Bioscience expects to receive a boost from its Tag-It Severe Sepsis Test, which has not yet been approved by the FDA.

"We plan to launch a commercial version of the test in 2007, as planned, and believe that once this product is established in the market, it will generate revenue far in excess of our presently commercialized products," Hines said.

Preparing for FDA clearances

Tm Bioscience's not-yet-commercialized ID-Tag RVP test also contributed to second-quarter revenues through the company's Early Access program, which allows key customers to gain experience with its products and provide feedback on them before they are approved.

The RVP test is designed to detect various strains of viruses, including avian flu, and Tm Bioscience expects the test to be approved in the United States and Europe by the end of 2006, Hines said.

The company has already signed distribution agreements for the test in Northern Europe and Turkey.

"We plan to strengthen and expand this distribution network globally over the coming quarters while our U.S.-based sales force targets customers in North America directly," Hines said.

Hines said the company also invested significant resources during the second quarter in preparing to launch its companion test for Warfarin. The test is designed to help physicians determine the correct dosing regiment of Warfarin, and Tm Bioscience expects it to gain FDA clearance late in the year or early in 2007.

Tm Bioscience plans to submit its three PGx P450 products to the FDA for clearance as in vitro devices before the end of 2006, Hines said.

Tm Bioscience is a Toronto DNA-based diagnostics company that develops genetic tests.

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