China Medical Pins High Hopes on Cancer Drug Test

Nov.11.10 | About: China Medical (CMEDQ)

China Medical Technologies (NSDQ: CMED) was granted approval by the SFDA for its real-time PCR-based Epidermal Growth Factor Receptor Assay. The EGFR PCR Assay is used to detect the 28 most common mutations in the EGFR gene in patients with non-small cell lung cancer, predicting the efficacy of targeted cancer drugs.

China Medical’s EGFR PCR Assay is the first such assay to be given SFDA approval. Developed internally by China Medical, the assay is designed for use in conjunction with companion diagnostic tests for personalized medicines for cancer patients.

Citing articles in medical journals, China Medical said EGFR abnormalities have been found in approximately 85% of NSCLC patients who responded to AstraZeneca’s (NYSE: AZN) Iressa or the Genentech/Roche (OTCQX:RHHBY) drug, Tarceva. Both drugs are approved worldwide for patients with NSCLC.

China Medical Technologies offers molecular diagnostic technologies on the Fluorescent in situ Hybridization and Surface Plasmon Resonance platforms and immunodiagnostic tests on the Enhanced Chemiluminescence Immunoassay platform.

China Medical’s financial results have been sliding lower since September 2009, when it was forced to cut the price on its ECLIA tests due to competitive pressures.

For its fiscal year 2010 (ended March 31, 2010), the company reported a revenue drop of 13% to 723 million RMB ($105.9 million). Sales of molecular diagnostic kits actually climbed 18% during the period to 385 million RMB ($56.4 million). However, revenues from the ECLIA platform took the entire company’s results lower by dropping 33% to 338 million RMB ($49.5 million). China Medical recorded a net loss for 2010 of 57 million RMB ($8.4 million).

China Medical has high hopes for SPR-based tests, which it expects to turn its fortunes around. In October 2008, it paid a huge $345 million to acquire the rights for a human papillomavirus test and its accompanying Surface Plasmon Resonance-based Analysis System. China Medical is beginning to roll out the system in fiscal 2011, following SFDA approval, but it did not break out separate figures for SPR in its Q1 2011 announcement. Its Q1 results remained below year-earlier numbers.

Disclosure: none.