In conversation with Gailina Liew

As president and COO of GeneNews (TSX:GEN), Gailina Liew established the initial intellectual property strategy and organizational infrastructure for the company over the past dozen years. More recently, she has led the commercialization effort for ColonSentry, a new patient friendly blood test to assess an individual’s current risk of having colorectal cancer. ColonSentry is now available in Canada, the U.S., Malaysia and China. The test is powered by GeneNews’ Sentinel Principle, which uses a blood sample to identify telltale RNA biomarkers for early risk stratification of disease, making it a stepping stone to the delivery of personalized health care. In this interview with, Ms. Liew discusses the recent launch of ColonSentry in the U.S. and plans for expansion in the U.S. and China, pipeline development, U.S. compliance with colonoscopy, a recent equity financing, stock consolidation and plans for a U.S. listing.

Undoubtedly, your biggest development in 2012 was launching ColonSentry in the U.S. What has the response been like?

Our U.S. marketing partner, Enzo Clinical Labs, launched ColonSentry in New York and New Jersey in April in a controlled launch with a small group of doctors and met a very positive response, both from patients and doctors. Enzo has been slowly introducing the test to more doctors. To date, the Enzo lab has processed over 3,500 tests and it continues to be well received. We expect Enzo will intensify its marketing efforts as 2013 goes along.

Are you seeking additional marketing partners in the U.S.?

We’ve been in discussions with other groups in the U.S. to expand the distribution footprint of ColonSentry beyond New York and New Jersey, and a number of those discussions are quite advanced. We’re optimistic we’ll be able to bring on another partner in 2013 to help us get ColonSentry into a broader number of regions in the U.S.

What about your efforts outside of the U.S.?

Last year, we also signed an agreement with Shanghai Biochip that has two elements. The first is to accelerate pipeline development and applications of the Sentinel Principle to products that will address some of China’s high priority disease areas. The second portion of the agreement grants Shanghai Biochip non-exclusive rights to market ColonSentry in China. The lab that we’re running in collaboration with Shanghai Biochip has been established in Shanghai and we’re in the process of staffing up to get it off the ground this year. This is very exciting because the lab is funded by Shanghai Biochip and we’ll be able to access patients for pipeline development work as well as market ColonSentry.

Interest in ColonSentry from other parts of the world also seems to be strong. Currently, we’re in the process of vetting a lot of requests and proposals from organizations that want to work with us to introduce ColonSentry into other markets, including Central and South America, Europe and Southeast Asia.

How big is the Chinese market for your company?

It’s potentially significant but as many companies have learned, realizing the potential is challenging due to the rapidly evolving nature and complexity of the Chinese healthcare market and business environment. Nevertheless, the mindset of maintaining wellness and preventative care is ingrained in the culture and is the basis of traditional Chinese medicine. So the mindset is there for a risk stratification tool like ColonSentry. In addition, access to healthcare in China is evolving rapidly and now more than two-thirds of the population has access to some level of healthcare either through an employer or a state-funded plan. So the opportunity is there to work with the right partner. Our partner, Shanghai Biochip, is a well-established CRO and has established relationships with many hospitals and clinics. So this is a good opportunity to see if that network can translate into a base of business for ColonSentry.

Since our relationship with Shanghai Biochip is non-exclusive, we are looking at other potential partners in China that can access population bases through different channels such as personal health clinics and corporations with benefit plans for their employees.

Taking into account the evolving market and the opportunity to be creative and innovative, the population over the age of 50 that could hypothetically benefit from ColonSentry is in the hundreds of millions. In terms of the addressable market though, this is where the evolving healthcare landscape has to be taken into consideration. As another region to focus on besides the U.S. market, China holds a lot of promise.

Can you describe how the lab in China works?

The lab in Shanghai is under our direction. We bring staff on board and train them in conjunction with the Shanghai Biochip staff. So, we will be transferring our knowledge and training to have a staff there that is knowledgeable to pursue development of our Sentinel Principle technology with resources supplied by Shanghai Biochip.

Tell me about the improvements you’ve made to the website.

We’ve worked on sharpening the message of the website to position ColonSentry as a tool to assist in risk stratification of patients for colorectal screening. The compliance rate with colorectal cancer screening is below 50%, and ColonSentry will be particularly useful for patients who are currently non-compliant.  We’re pleased with where the website is now, and as the business evolves, we’ll continue to refine it.

What is in the pipeline with the Sentinel Principle?

The program we’ve completed in liver cancer was funded by the Malaysian Ministry of Health, and data were presented at the ASCO meeting last year. In parallel to that, we finished work on a prostate cancer application using the Sentinel Principle that was recently published in the journal PLOS. That work was funded by a consortium of private investors in Malaysia. Additional work for the pipeline is now part of our research plan with Shanghai Biochip. At the top of the list is applying the Sentinel Principle to lung cancer, which is one of the major health concerns in China.

What do you hope to achieve in your study with Geisinger Health System?

In the third quarter of 2012, we initiated a prospective study with Geisinger, a Pennsylvania-based healthcare system, to determine whether ColonSentry as a blood test will facilitate greater compliance with colonoscopy than the stool-based test now used in the Geisinger system. Patient enrollment will likely begin in the current quarter.  We would expect to see early data in the fourth quarter and completion of the study in 2014. The significance of a positive outcome would provide additional evidence to demonstrate the clinical utility and benefits of ColonSentry, which is important for long-term reimbursement of our test.

One of the challenges of colorectal management is compliance with recommended screening guidelines for colonoscopy, which is the gold standard as a diagnostic and therapeutic. U.S. estimates indicate that more than 50% of eligible patients do not get screening colonoscopies even though colorectal cancer is among the most preventable and treatable cancers. So getting people to focus on colorectal health early is the most cost effective way of getting this disease under control. That’s why generating clinical utility and benefit data around ColonSentry as a relatively non-invasive blood test is important and could translate into additional adoption by healthcare systems as an early risk stratification tool.

Has GeneNews been impacted by the U.S. Supreme Court’s recent rulings on patents?

Without getting into a lot of technical detail, the recent activity and rulings were giving rise to concerns about the patentability of diagnostic method claims. The consensus that has emerged indicates that these types of claims are still viable, but you must be very careful about how your patent claims are constructed.   Our patents have not been impacted by these rulings, and we’ve had several additional issuances of diagnostic method patents after those Supreme Court decisions—which is important, because it means our portfolio and claims strategy has been sound all along.

Who participated in your recent private placement?

We had strong participation from new and existing investors in our recent $7.7-million financing.  Roughly $5.5 million came from new investors, including a number of U.S. strategic investors with diagnostic expertise.  With a strengthened balance sheet, a positive response to ColonSentry from the initial U.S. launch into New York and New Jersey just a few months ago and a revenue stream that is starting to grow, we can move forward quickly to expand the distribution of ColonSentry into additional regions of the U.S.  One of our goals is to generate sufficient revenue from ColonSentry sales to put GeneNews in a position to be self-sustaining. That milestone is not too far down the road for us if the positive response we’ve encountered initially can be multiplied through distribution into other regions of the U.S.

What are your plans to list in the U.S.?

In conjunction with the financing, we consolidated our stock to improve our capital structure as a first step for broader exposure and activity in the U.S. The next step is to pursue a QX listing of our shares in the current quarter to facilitate trading in the U.S.