more than 73,000 cases of skin cancer in 2015, according to the American Cancer Society. That’s a relatively small number compared to the 3.5 million cases of basal and squamous cell skin cancer that are diagnosed in the United States each year. But melanoma alone accounts for nearly 10,000 deaths annually—more than three-fourths of the 13,000 deaths attributed to all skin cancers.
The company is emphasizing the accuracy and reliability of its assay for diagnosing melanoma, but the cost of performing the assay may prove to be a more critical factor for doctors, healthcare providers, and insurers.
Through extensive economic analysis, Dobak says, DermTech has set an average price of $400 for the test. In an e-mail, he writes: “By reducing unnecessary surgical procedures and finding skin cancer earlier we will provide significant savings to the healthcare system between $100 and $250 per patient assessed, which is 100s of millions of dollars in direct costs. Indirect costs are also significantly reduced with the product (~$1,250).”
DermTech also is looking for ways to expand the use of its core gene expression analysis technology. For example, under partnership agreements with Gaithersburg, MD-based MedImmune and Cambridge, MA-based Biogen, the technology is being used to help develop new drugs for inflammatory diseases, allowing researchers to select patients based on their initial skin gene expression profiles, identify biomarkers of specific diseases, and track drug responses.
In October, DermTech said it had begun to enroll patients in a new multicenter study of a second diagnostic intended to detect the RNA expressed by certain genes associated with basal cell carcinoma, the most common type of skin cancer. The company says a growing number of health insurance providers require a confirmation of a basal cell carcinoma diagnosis prior to removal by Mohs surgery, the procedure with the highest cure rate, according to the American College of Mohs Surgery.
DermTech was founded in 1996 as a clinical research organization providing dermatologic services, Dobak said. But the company shifted in 2007 to become more of a life sciences company focused on the current diagnostic technology.
In the years that followed, DermTech raised over $16 million from Jacobs Investment, the fund managed by San Diego super angel Gary Jacobs, a son of Quaclomm founder Irwin Jacobs.
Dobak says Jacobs recruited him to take over as DermTech’s CEO about three years ago. “When I came in, the company was really back at stage zero,” Dobak said. “There were just a couple employees and some good intellectual property.”
DermTech began to raise additional capital this year, and plans to raise a total of $15 million to expand sales and marketing efforts targeting about 800 doctors throughout the United States who are skin cancer specialists, Dobak says.
“Our challenge will be to drive utilization, and we think that’s a very solvable challenge,” he says.
