How does Cancer Genetics’ merger with StemoniX fit with the company’s new strategy?

The announcement of the Cancer Genetics-StemoniX merger took place in late fall of 2020. In the middle of a pandemic, we were able to identify a perfect partner and work through the early stages of a merger, doing everything virtually.  Our strategic thinking pivoted from diagnostics to focusing on drug discovery where we are bringing scientific and data innovations together with Cancer Genetics’ existing preclinical business; wholly-owned subsidiary vivoPharm.  The adjustment in our business plan allows us to focus on solving the challenges of drug discovery and translational decision making which has traditionally been so expensive and risky. The pending merger with StemoniX is important to us, because between StemoniX and CGIX-vivoPharm, we will now be able to bring meaningful data science and analytics together with a human-first approach to interrogate the impact of innovative therapeutics on human cells. StemoniX has developed a spheroid and organoid technology platform that allows us to look at very specific disease categories, to then be highly predictive in understanding the impact on humans when identifying drug candidates before a drug gets into clinical trials. Given our respective capabilities across the two companies, we believe this merger allows us to think about target identification and everything that happens from that point on in very early discovery, all the way through IND readiness or enablement. The combined companies have amazing scientific teams with great expertise running from target ID to IND regulatory approvals. StemoniX has created a highly functional, standardized, and almost industrialized approach to the development of creation of spheroids and organoids to be used in high-volume drug candidate screening. That allows us to identify drugs that we think are predictive in humanized cell-based assays, allowing us to better design our in vivo preclinical research protocols.

What makes Cancer Genetics a more appealing company to invest in today than in previous years?

Over the last couple of years, we have taken Cancer Genetics through a meaningful business strategy transformation. We divested a number of business units. As we did that, we raised cash and eliminated a significant amount of debt on our balance sheet, and simultaneously simplified our cap table. By the beginning of 2020, we had multiple options about what to do next. We had vivoPharm, which was profitable, very secure, and exceptionally well run.   As we looked across the universe of what to do next, we took a very careful look at drug discovery and translational science. Around that time, the pandemic came, and it was a meaningful event in the sense that we realized how difficult it was to develop a vaccine. This was an impetus for us to drive our strategy forward. We recognized that not only is there a huge unmet need, but also, we are among a small number of companies addressing the challenges of drug discovery using innovative, science-based technologies and a highly-developed focus on the regulatory community. We believe that we are amongst a small group of leaders in this area, and our approach of bringing human cell-based assays into the discovery cycle, alongside traditional preclinical research makes us very unique. Ultimately, while it is important to have strong capabilities in the science of biology and chemistry, we now are positioned so that we can be where science and technology meet. Thus, we leverage the benefit of being insightful with large volumes of data. We are thinking about genomic and genetic data that is available and how to bring that back into the discovery cycle. This gives us much better insight in terms of how to predict and identify drugs that will be successful in the clinic.

How does Cancer Genetics cross validate its data?

We believe that bringing forward data through multiple modalities is the right answer. We know companies are developing and discovering drugs using computer models. This is important, and some companies have designed unique and interesting in vitro research. We combined both our in vivo animal research with in vitro high-volume and standardized screening that we can do with the StemoniX human disease models, along with in silico algorithms and data modeling. Combining the three allows us to control the experimental parameters and ensure that the data provides greater clarity around the translation of in vitro outcomes to in vivo outcomes, and ultimately clinical outcomes. Doing that enables better understanding and insight associated with which modality is more useful in determining whether drugs are safe and effective. We are combining these across a unique drug discovery engine, which is distinctively positioning us in the market.

How is Cancer Genetics positioned to grow moving forward?

Our new business model allows us to enter into partnership relationships with both pharma and biotech companies. Those partnerships lead us to exclusively license access to our platforms at the individual disease level. We are licensing access to our technology into our drug discovery engine, but then we will also be able to identify potential repurposed therapeutics that will become our assets, which our combined company will take through the discovery cycle. From there it is about making good business decisions about when it is time to out-license various repurposed therapeutics to partners. That is a big part of our strategic plan going forward.

We also believe that being at the table with the global regulatory community is important. I have had a lot of experience around global regulations based on over 10 years as a member of the Drug Information Association (DIA) board of directors, which made me recognize how important it is to be a thought leader focused on the regulatory community. Cancer Genetics has a team of people that have expertise in this area, and it is very much in front of our strategy, so that our work allows us to uniquely bring science and technology together. We will continue to focus on the fact that we are creating highly standardized and very predictable data. Ultimately, the regulatory community is depending on the quality and integrity of the systems that bring the data forward in order to use that for purposes of more predictable and faster approvals.