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AltheaDx, with Personalized Medicine Diagnostics, Files for IPO

Xconomy San Diego — 

San Diego-based AltheaDx, which uses diagnostic tests and bioinformatics to help doctors identify the optimal drugs based on a patient’s genetic make-up, plans to raise as much as $69 million in an IPO.

The company, which began operating in 2008, says in its IPO filing that it has used its IDgenetix technology to complete tests on more than 13,500 patient samples through the first nine months of the year. More than half of those were done in the third quarter.

AltheaDx has financed its operations primarily through private equity deals, debt, and by generating revenue from its R&D services to numerous biopharmaceutical partners, primarily in cancer diagnostics.

The company generated about $13.6 million in revenue through the first nine months of 2014, and has about $7.5 million in available cash. However, AltheaDx says it also has incurred significant operating losses since inception. At the end of September, it had an accumulated deficit of $19.2 million, and had borrowed $12.4 million against a $20 million credit facility held by Silicon Valley Bank.

According to the filing, IDgenetix assesses the genes involved in both the metabolism and pharmacological effect of numerous drugs. The company currently offers 13 tests for cardiovascular disease, neuropsychiatric disorders, and pain. Additional tests are under development in neurology and rheumatology.

The company offers its commercial IDgenetix services to multiple healthcare providers, and says reimbursement for its testing services comes from third-party payers, including Medicare and Medicaid, private health insurance plans, hospitals, and managed care organizations, as well as individual patients. Medicare patients accounted for 59 percent of all IDgenetix tests done through the first nine months of the year.

AltheaDx says its technology addresses the current “trial and error” process that doctors use to find the particular drug that works best for each patient. The diagnostic test identifies key metabolic enzymes and other applicable biological drug targets that vary among individuals. The company says its bioinformatics technology also screens for unfavorable metabolic interactions that can arise when multiple drugs are prescribed for the same patient.