FDA Finds Epigenomics Appealing

In pulling off the almost unheard-of feat of successfully appealing against an FDA rejection, Epigenomics (OTCQX:EPGNF) today got full approval for its twice-denied colon cancer blood test, saw its share price rise 24%, and shone a light on some rather odd behavior from the US regulator.

“We had a discussion with the FDA and it turns out they were not quite comfortable yet with the data we had provided, but they didn’t really know what else to ask for,” Thomas Taapken, the group’s chief executive, tells EP Vantage.

Epi proColon was first submitted to and rejected by the FDA in 2014, and was turned down a second time in November, with appearances at the time suggesting that Epigenomics would have to conduct another trial (Epigenomics down but is it out?, November 5, 2015).

But the agency did not specify what kind of further studies it wanted. “If they had come back in November saying, we want you to do exactly this kind of study which we know you can complete in X number of months, we might have just done that,” Mr. Taapken says.

Well thought through

Instead, not entirely unreasonably, the group decided that if the FDA could not be more explicit in its demands – and firmly believing that no new studies could make any difference to Epi proColon’s approvability – it would simply ask again.

Despite there being little or no precedent of a successful appeal to the FDA regarding approval of a medical device – and precious few cases with drugs – the company won out.

But devices are rejected, sometimes several times in a row, all the time. What made Epigenomics take this path when there is no record of a medtechcompany making it work before? Mr. Taapken says the company had external consultants who recommended that it take this route, adding that it was “a well thought-through path forward”.

Now Epi proColon is the first blood-based colorectal cancer screening test to reach the US. Epigenomics will sell it under a joint commercialization agreement with Polymedco on a service provision basis. It will be performed at facilities owned by commercial test providers such as Quest Diagnostics (NYSE:DGX) and LabCorp.

That said, it is entering in second place: Exact Sciences’ (NASDAQ:EXAS) DNA-based colon cancer test was approved in the US in August 2014. ButEpigenomics looks like it has two advantages over its competitor.

Convenience, cost and correctness

First is convenience: Epi proColon detects methylated Septin 9 DNA, a biomarker for colorectal cancer, in a patient’s blood whereas Exact’s Cologuardperforms a similar test on fecal samples, which the patients must send to its testing facilities via the post.

The second advantage is cost. Cologuard uses two DNA methylation markers to Epi proColon’s one, Mr. Taapken says, and is reimbursed at $141 per methylation marker. Thus $141 “is a realistic ballpark” for reimbursement of Epi proColon, he says.

The assay was already offered in the US by Quest as a lab-developed test and reimbursed at around this level, Mr. Taapken says, but full approval will allow direct marketing, and the company’s revenues ought to increase as a result.

The real issue for Epigenomics is the availability of much cheaper and similarly effective fecal immunochemical testing (FIT), currently used as a preliminary screen, and the older technique that remains the gold-standard for diagnosing colon cancer, colonoscopy (Double whammy is Exactly the wrong prescription for Cologuard, October 7, 2015).

Perhaps it can beat FIT using the convenience angle, and beat Exact’s test on convenience and cost. But it will never beat colonoscopy, which is use to confirm diagnoses with all these different diagnostics, on accuracy.

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