02 Feb Aspira Women’s Health: Improving Ovarian Cancer Detection
Aspira Women’s Health Inc. (NASDAQ: AWH) is a bio-analytical-based women’s health company focused on developing gynecologic disease diagnostic tools. The Company aims to eradicate late-stage detection of ovarian cancer and to ensure that its solutions will meet the needs of women of all ages, races, ethnicities, and stages of the disease.
Aspira Women’s Health Inc. (NASDAQ: AWH)
Market Cap: $54.48M; Current Share Price: 5.27 USD
Data by YCharts
The Company and its Products
Aspira currently markets and sells the following products and related services: (1) Ova1, a blood test intended as an aid to further assess the likelihood of malignancy in women with an ovarian adnexal mass for which surgery is planned when the physician’s independent clinical and radiological evaluation does not indicate malignancy; (2) Overa, a second-generation biomarker reflex test intended to maintain Ova1’s high sensitivity while improving specificity; (3) Ova1Plus, a reflex offering which uses Ova1 as the primary test and Overa as a confirmation for Ova1 intermediate range results and leverages the strengths of Ova1’s multivariate index assay (MIA) sensitivity and Overa’s (MIA2G) specificity and as a result reduces false elevations by over 40%; and (4) OvaWatch, a lab-developed blood test intended to assist in the initial clinical assessment of malignancy risk in all women thought to have an indeterminate or benign adnexal mass. Collectively, these tests are referred to and marketed as OvaSuite.
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Aspira’s products are distributed through its own national sales force, through its proprietary decentralized testing platform and cloud service marketed as Aspira Synergy, and through a marketing and distribution agreement with BioReference Health, LLC (formerly known as BioReference Laboratories, Inc.), a subsidiary of OPKO Health, Inc.
We will discuss the rationale for covering this Company.
- Commercial Products with Rich Pipeline
Commonly known as the “silent killer,” ovarian cancer leads to nearly 13,000 deaths each year in the United States. In 2022, The American Cancer Society (ACS) estimated that almost 20,000 new ovarian cancer cases were diagnosed, with the majority of patients diagnosed in the late stages of the disease in which the cancer has spread beyond the ovary. Unfortunately, ovarian cancer patients in the late stages of the disease have a poor prognosis, which leads to high mortality rates. According to the National Cancer Institute, when ovarian cancer is diagnosed at its earliest stage (stage 1), patients have up to a 93%, 5-year survival rate following surgery and chemotherapy. The 5-year survival rate falls to as low as 31% for ovarian cancer patients diagnosed in the late stages of the disease.
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Accordingly, there is a clinical need for a diagnostic test that can provide adequate predictive value to stratify patients with a pelvic mass into those with a high risk of invasive ovarian cancer versus those with a low risk of ovarian cancer, which is essential for improving overall survival in patients with ovarian cancer. The goal is to catch the mass early before it becomes late-stage cancer.
Ova1Plus and OvaWatch, offered by Aspira, improve the chances of identifying ovarian cancer.
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So far, OvaSuiteSM, the Company’s portfolio of multi-marker ovarian cancer blood tests, has been ordered over 194,000 times to assist healthcare providers in making informed treatment decisions for the 1.2 to 1.5 million American women diagnosed with adnexal masses each year. The domestic market opportunity for OvaSuite is estimated at $600 M to $715 M.
Aspira is also developing EndoCheck – a first-generation noninvasive protein-based blood test to aid in detecting endometriosis. There is a significant unmet need for patients and pharma to identify patients with endometriosis.
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EndoCheck is the first-ever protein-based assay for diagnosis of ovarian endometriosis.
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Overall, there is a $1B pipeline opportunity for blood tests in ovarian cancer and endometriosis.
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Thus, there is a significant market opportunity for tests for ovarian cancer and endometriosis, and Aspira stands to gain substantially as it offers the first-of-its-kind, noninvasive tests for identifying gynecologic disease.
- Key Growth Drivers
The Company is focusing on the following strategy to drive growth in 2024:
- OvaSuite Adoption and Growth: Aspira aims to complete a commercial refresh to capture the large patient population of women with adnexal masses. The Company has a commercial infrastructure, including sales, marketing, and reimbursement expertise. It also operates a national CLIA-certified clinical laboratory, Aspira Labs. Aspira’s sales representatives work to identify opportunities for educating general gynecologists and gynecologic oncologists on the benefits of Ova1.
In February 2015, Aspira received ISO 13485:2003 certification for its quality management system from the British Standards Institution (BSI), one of the world’s leading certification bodies. The Company currently holds CE marks for Ova1 and Overa. Now that Overa has been cleared on the Roche Cobas platform, which is available globally, Aspira is targeting markets outside the United States.
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- Market Access and Coverage: Aspira aims to expand OvaSuite payer adoption and improve average unit price. Medicare reimbursement of OvaWatch and Ova1Plus® has been established at $897 per test Reimbursement by several national/regional commercial and state Medicaid plans.
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- Accelerate Innovation and R&D: Innovation is fundamental to the long-term success of any diagnostics company. For Aspira, it starts with expanding the ovarian cancer portfolio, which is now branded as OvaSuite. The first Lab Developed Test (LDT), OvaWatch, is a noninvasive ovarian cancer risk assessment for women with adnexal masses to be used by physicians as part of initial clinical assessment.
The Company plans to accelerate the development of the endometriosis product portfolio by supplementing its internal development and validation program with its partnership with Harvard’s Dana-Farber Cancer Institute (DFCI), Brigham & Women’s Hospital (BWH), and Medical University of Lodz through a sponsored research agreement that it entered into in the third quarter of 2022. The Company’s 2024 product development milestones are shown below.
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Aspira’s competitive positioning is superior to other diagnostic companies as its processes to develop and validate new LDTs are performed in a CLIA laboratory environment. This allows for the acceleration of assay commercialization without sacrificing patient care.
- Collaboration Opportunities: In 2021, Aspira entered into decentralized arrangements with large healthcare networks and physician practices for the Aspira Synergy platform, the Company’s decentralized testing platform and cloud service for decentralized global access to protein biomarker testing. Ova1, Overa, and Ova1Plus are available through the Aspira Synergy platform.
The Company has entered into four technology transfer agreements since the launch of Aspira Synergy. Two agreements are with independent regional laboratories and are being launched and piloted. One of the agreements is with one of the nation’s largest and leading independent women’s healthcare groups, which has already launched and is contributing to our Ova1Plus volume. The customer canceled the last of the four agreements with Axia Women’s Health, intended to deliver genetics carrier screening in the third quarter of 2022.
Nevertheless, the Company is working on securing additional development and commercial partnerships.
- Financial Performance
For Q3 FY23, Aspira reported product revenue of $2,217,000, an increase of 9%, compared to $2,037,000 for Q3 FY22. The increase in revenue was primarily due to an increase in OvaSuite test volume compared to the prior year, and the addition of the Company’s OvaWatch product, as well as an increase in the Average Unit Price (AUP) of OvaSuite to $383 per test compared to $369 for the same period in FY22.
Gross profit margin for Q3 FY23 was 59.0%, compared to 55.8% for Q3 FY22.
Product revenue for the nine months ended September 30, 2023, was $7,023,000, an increase of 19%, compared to $5,890,000 for the same period in 2022.
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Total revenue was $8.2 million for FY22, an increase of 20% compared to $6.8 million for FY21. The increase in revenue was primarily due to the rise in OvaSuite test volume compared to the prior year, which increased 23% to 21,423 tests for FY22 compared to 17,377 tests for the same period in 2021.
Gross profit margin was 53% for FY22 compared to 45% for FY21, primarily attributable to targeted cost control measures in laboratory and information technology spending.
Aspira has achieved steady revenue growth and significant gross margins over the last few quarters. The growth trajectory is likely to remain consistent due to the unmet need for ovarian cancer and endometriosis predictive tests and the Company’s first-of-a-kind product offering.
Risks
Aspira is subject to certain risks. Firstly, the Company has experienced significant operating losses each year since its inception and expects to incur a net loss for fiscal year 2023. If Aspira cannot increase the volume of OvaSuite sales, its business, operations, and financial condition will be adversely affected.
Secondly, the Company has implemented strategies to expand payer coverage for its ovarian cancer risk assessments, including securing coverage for OvaWatch consistent with existing coverage for Ova1Plus. However, the Company cannot guarantee that it will be able to secure additional payer coverage for Ova1Plus or that comparable coverage will be available for OvaWatch. Failure to expand payer coverage may significantly negatively impact product adoption and results of operations.
Conclusion
Aspira has a $1B pipeline opportunity for blood tests in ovarian cancer and endometriosis, and the Company is likely to see increased revenue growth due to its one-of-a-kind predictive tests. However, the Company has a history of losses, and its inability to expand OvaSuite sales may negatively impact its prospects. Hence, investors must proceed with caution.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
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Reference:
https://ir.aspirawh.com/wp-content/uploads/2022/06/AWH-Investor-Deck-January-8-2024-FINAL.pdf
https://ir.aspirawh.com/wp-content/uploads/2023/12/3Q23-AWH-FactSheet-FINAL.pdf
https://www.sec.gov/ix?doc=/Archives/edgar/data/926617/000092661723000026/awh-20221231x10k.htm
https://www.sec.gov/ix?doc=/Archives/edgar/data/926617/000092661723000095/awh-20230930x10q.htm
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