MONOGRAM REPORTS RECORD 2008 REVENUE AND 2009 GUIDANCE.(Financial report)

Monogram Biosciences, Inc. (Nasdaq:MGRM), South San Francisco, announced that it expects to report revenues of approximately $62 million for the year ended December 31, 2008, an increase of 44% over the prior year. The company established 2009 revenue guidance of between $66 million and $70 million based on expected growth which, in conjunction with reduction in costs, should achieve cash flow breakeven by the fourth quarter of 2009.

Three separate sources of growth are expected to drive Monogram's 2009 revenues:

Increased sales of Trofile due to its clinically proven high level of sensitivity for selecting appropriate patients for CCR5 therapy and an increasingly positive profile for Selzentry, Pfizer's CCR5 antagonist, as a treatment option for a broad group of treatment-experienced HIV patients. Sales of HERmark for assessment of breast cancer patients' HER2 status, and later in 2009, for assessment of Herceptin resistance pathways for HER2 positive patients.

Use of VeraTag assays for our expanded portfolio in drug development programs focused on EGFR/HER targets.

"We are pleased to achieve revenues for 2008 that are substantially increased over last year and consistent with our prior guidance," said Bill Young, Monogram's chief executive officer. Although 2009 revenue guidance is established at $66-70 million, deferred revenue of $4-5 million from sales of Trofile assays to Pfizer outside of the U.S. could put non-GAAP revenue at $70-75 million. "We expect further revenue growth in 2009 in both HIV and oncology," continued Young. "Our plan for 2009 is tightly focused on those key programs and deliverables that we believe will drive the most significant shareholder value. Capitalizing on the proven strong clinical utility of Trofile and the outstanding progress in our oncology programs are important priorities, as is close management of our cash flow."

Cash Flow Target

"A key financial goal for Monogram is to achieve cash flow breakeven by the fourth quarter of 2009 and then to remain cash flow positive on a sustainable basis," said Alfred Merriweather, Monogram's chief financial officer. "We expect to attain this goal at the low end of our full year revenue guidance range of $66-$70 million."

"We have taken a number of steps to reduce our use of cash," continued Merriweather. "These include reduction of costs related to personnel, programs and overhead activities. Additional steps will be taken if necessary to achieve our goal of cash flow breakeven. Together, our cost reductions have taken over $10 million out of our planned 2009 expenses. These actions have also significantly reduced the level of revenues at which cash flow breakeven is projected from $23-25 million per quarter to less than $20 million per quarter."

Monogram had $16 million in cash at December 31, 2008. "Our goal is to reduce our use of cash to approximately $6-8 million for the year," noted Merriweather.

HIV Update

Key accomplishments in 2008 in Monogram's HIV business include:

Achievement of full year Trofile revenues for selection of patients for Selzentry of over $16 million.

Introduction in June 2008 of assay enhancements that increased Trofile's sensitivity thirty-fold, such that X4 virus can be detected in quantities as low as 0.3% of the virus population with 100% sensitivity. Clinical validation of the enhanced Trofile Assay's ability to further optimize patient selection for CCR5 antagonist treatment in retrospective analyses of two clinical trials - the AIDS Clinical Trials Group 5211 phase II study of Schering Plough's CCR5 antagonist, vicriviroc, in highly treatment-experienced HIV patients and the phase III trial of Pfizer's Selzentry in treatment-naive individuals with CCR5-tropic HIV-1. In this Selzentry trial, an endpoint that had been missed in an earlier analysis was found to be met upon reanalysis with the enhanced version of Trofile. Introduction in August 2008 of Phenosense HIV Integrase, a phenotypic resistance test designed to detect susceptibility to the new class of integrase inhibitors, such as Merck's Isentriss.

"We've seen significant progress in our HIV franchise during 2008," commented Young. "In particular, the introduction and clinical validation of our enhanced Trofile Assay has solidified Trofile's role as the only clinically validated way to select the appropriate patients for CCR5 antagonists, such as Pfizer's Selzentry. Looking to the future, we believe that the CCR5 class of HIV drugs has an important role to play in HIV treatment and we anticipate increased use of Trofile for assessment of treatment-experienced patients for Selzentry therapy. Pfizer's reanalysis of their earlier phase III trial in treatment-naive patients suggests that, in time and after regulatory review and approval, Selzentry may have even broader applicability"

Oncology Update

Key accomplishments in 2008 in Monogram's oncology business include: Commercial introduction of HERmark as a CLIA-validated assay performed exclusively in Monogram's CAP-certified clinical reference laboratory. HERmark provides accurate and quantitative measurements of HER2 total protein levels and HER2:HER2 homodimer levels.

Establishment of an oncology field sales team with an aggregate of 47 years of oncology drug sales experience.

Presentation of clinical evidence for the superiority of HERmark over conventional FISH and IHC testing for predicting patient response to trastuzumab at ASCO in June 2008 and at the San Antonio Breast Cancer Symposium in December 2008. At San Antonio, in an oral presentation, entitled HER2 Protein expression and homodimer levels predict response to trastuzumab in centrally tested FISH-positive metastatic breast cancer patients," Allan Lipton M.D., Professor of Medicine & Oncology at Hershey Medical Center/Penn State University reported on a study (the "Lipton Study") that assessed HERmark as a means to measure HER2 total protein and homodimer levels and to predict the response to treatment with Herceptin[R] (trastuzumab) in patients with metastatic breast cancer. The data indicated that, irrespective of the FISH results, whether positive or negative, patients with low HER-2 total protein expression responded less well to a trastuzumab-containing regimen than patients high HER-2 total expression.

Preliminary results from this study, that were previously presented at the 44th ASCO Annual Meeting in Chicago, Illinois, in June 2008, indicated that HERmark was a better predictor of response to trastuzumab than FISH testing, even when conducted in a central laboratory. These results also indicated discordance between the assessments of HER2 status as measured by HERmark and FISH, such that 14% of FISH-negative patients were determined to be HER2 high expressors by HERmark and 13% of FISH-positive patients were determined to be HER2 low expressors by HERmark. The additional analyses reported at San Antonio clarify that in the specific patients where there is discordance between the two assessments of HER2 status, the HERmark result is the one that is aligned with clinical outcome.

Analysis of HER2 status by HERmark in approximately 900 patient samples from the FINHER study of Herceptin in the adjuvant setting to assess the relationship of HER2 protein and HER2:HER2 homodimer measurements with clinical outcomes. Comparison of HERmark results with both local and central IHC and CISH demonstrated better concordance with centrally performed IHC and CISH assays, with observed reclassification rates of 13-23%. Clinical data from this study have been submitted for presentation at an upcoming oncology meeting.

Submission of two HERmark clinical studies for publication in peer-reviewed journals the Lipton study (described above) and a previous clinical cohort, along with a third submission of a paper detailing VeraTag assay methods. The latter two of these have been accepted for publication. Expansion of Monogram's portfolio of VeraTag assays to include assays for measurement of the levels of:

HER1 total protein

HER3 total protein

HER1:HER1 homodimers

HER1:HER2 heterodimers

HER2:HER3 heterodimers

HER3:PI3K complex, a key downstream signaling complex in the Akt pathway p95, a proteolytically truncated form of the HER2 protein

Presentation of scientific data on the HER1 and HER3 total protein assays, the HER1:HER1 homodimer assay, the HER1:HER2 and HER2:HER3 heterodimer assays and the PI3K assay (at the 20th EORTC-NCI-AACR Symposium on Molecular Targets and Cancer Therapeutics in Geneva, Switzerland in October 2008, at the AACR Targeting the PI3-Kinase Pathway in Cancer meeting in Cambridge, MA in November 2008, and at the San Antonio Breast Cancer Symposium in December, 2008).

In 2008, we established the ability of our VeraTag assays, including our first CLIA-validated product, the HERmark Breast Cancer Assay, to make reliable, accurate and quantitative measurements of a number of proteins and protein complexes in the EGFR/HER family," commented Young. "As many of these markers are believed to be important to the progress of multiple cancers, this positions the VeraTag platform for an important role in patient selection and clinical development across a broad spectrum of cancer therapy." In 2009, Monogram's plans for further developing its oncology franchise include:

Confirm the results of the Lipton Study in an additional patient cohort to further validate the clinical utility of HERmark as a predictor of response to trastuzumab for patients with metastatic breast cancer. A study of approximately 500 patients is underway with the Dana Farber Cancer Institute and additional studies are under discussion. Extend the Lipton Study in metastatic breast cancer by making additional VeraTag measurements, such as those for p95, HER3 and HER heterodimers, in existing patient samples to investigate the relationship between those biomarkers and clinical outcomes, and subsequently submitting study results for presentation and publication.

Print Get the Mag Weekly Updates