Verici Dx (VRCI ) went public in November 2020, raising c.$17.6 million (net) to primarily fund the clinical validation studies for Clarava™ and Tuteva™. Today, the Company is on track to ensure its lead products are fully tested for validation by the end of 2021 with publication of trial results planned for 1Q22.
Kidney Disease – A $700m Target Market
Investors may not be aware that 5-10 million people die annually from kidney disease with around 300,000 people around the world are currently on a waiting list for a kidney transplant (Source: WHO) with failure rates costing approximately $10bn - $20bn.
Verici’s kidney transplant assays use bleeding edge next-generation sequencing that can define a personalised risk profile for each patient over the course of their transplant journey, and therefore presents a compelling value proposition for a target market worth approximately $700m per annum.
The Company’s products are planned to be offered as laboratory developed tests (“LDTs”) in the US, due to the lighter regulatory burden of authorisation under the CLIA regime, which is used by CMS (Center for Medicare and Medicaid Services), in partnership with state health departments.
The CTOT-19 study, titled: “Effects of Inhibiting at Early Inflammation in Kidney Transplant Patients’, was initiated in November 2015 with the aim to enrol 300 kidney transplant recipients at 15 transplant centres in the US and Canada, with the study having completed in July 2021.
Pipeline and Partnerships
Taking into account operational highlights both during and post the period end, the Company has now enrolled eleven US and EU clinical validation sites, completed patient enrolment to the clinical validation trials for its lead products, ahead of schedule, and obtained CLIA2 Certification of Registration for the Company’s newly established US clinical laboratory in Tennessee.
The latter should not be overlooked as this provides the Company with some degree of autonomy and control by bringing some capacity ‘in-house’.
Financial Highlights
Albeit rather incidental at this point, the Company closed the period with $14.5m on the balance sheet, post raising $17.6m at IPO. In essence a pre-revenue company at this stage, EBITDA loss for the six month period was $2.52m.
View from Vox
With a $10bn - $20bn failure cost for Kidney disease presenting an addressable market of approximately $700m, there is a clear unmet market need for the Company’s products and services.
Importantly for investors, the Company has delivered significant operational progress during the period despite the obvious impact of COVID-19 and is ahead of schedule on delivering on its IPO promise of getting its tests into the lab this year with 11 sites onboarded to date.
We note the sad passing of Dr. Barbara Murphy during the period. However, progress of the Platform Expansion has not been impacted noticeably and the appointment of Lorenzo Gallon, MD, to the Board certainly shows the attractive industry position of the Company. Lorenzo has extensive experience in nephrology and hypertension and will be an integral advisor going forward.
For investors, we’re pleased to see the Company is on track to deliver initial results on its two leading products, with the conclusion of 3-month biopsy and 6 month outcome trials, for submission by the end of this year with publication scheduled during 1Q22. This milestone and further positive Newsflow expected over the remainder of the year certainly provides plenty of excitement for investors over the next six months.
Reasons to VRCI
Verici Dx is focused on developing and commercialising tests to understand how a patient will and is responding to organ transplant, with an initial focus on kidney transplants.
Leading IP
Verici Dx’s work is underpinned by extensive scientific research into the recipient's immune phenotype and how that impacts on acute rejection, chronic injury and ultimately failure of the transplant.
The company’s immuno-profile signatures also inform clinicians as to the optimal strategy for immunosuppressive and other therapies for the most successful treatment to ensure graft acceptance with the least amount of side effects.
Verici Dx was admitted to trading on AIM on 3 November 2020, with the company also raising £12.05m through an oversubscribed fundraising, to primarily fund the development and commercialisation of its two leading clinical products in the kidney transplant space.
Significant Market Opportunity >$700m p.a.
The waiting list for transplants is significant at around 300,000 globally with US and European governments calling for an acceleration in the number of transplants undertaken each year.
Globally, there are approximately 95,000 transplants per annum, of which approximately 24,000 and 25,000 are performed in the US and Europe respectively.
In the US the average cost of a transplant is $0.44m per transplant and the average annual cost and the average annual cost of dialysis is around $0.09m, with patients faced with being on dialysis from 3 to 5 years.
Positive Development Newsflow
Verici has commenced a multi-centre validation study for each product in 4Q20, with studies expected to conclude in 4Q21 with publication in 1Q21.
Clarava and Tuteva are then expected to be offered as Lab Developed Tests with regulatory approval with first revenues expected during 2022.
Verici expects supportive news flow throughout the remainder of 2021 on commercial partnerships, regulatory news, reimbursement and results from test development programmes. Once approved, it aims to accelerate reimbursement coverage ahead of full clinical utility data in 4Q22.
There is a critical need for more personalised diagnostic information within transplant care, and in particular technologies informing earlier interventions with anti-fibrotic therapies in advance of irreversible organ damage,” commented Sara Barrington, CEO of Verici Dx.
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