Aerocrine’s novel asthma test in search of doctors, insurers [The News & Observer, Raleigh, N.C.]

March 23--The Swedish biotech company that last week picked the Triangle for its North American headquarters has already begun cherry-picking the region's pharmaceutical companies in a strategy to create a global market for a new asthma test that's still unknown to most doctors.

Aerocrine employs seven in Morrisville and plans to bulk up to 52 people in three years, having recently hired several executives from layoff-prone GlaxoSmithKline and Inspire Pharmaceuticals, a Raleigh company since acquired by Merck.

"I wanted to build the A-team," said Aerocrine president Chip Neff, the company's top executive in Morrisville. "That's why I moved the company here."

Aerocrine has never made a profit and is in a race against the clock to get doctors to use its breath test on patients -- and insurance companies to pay for the test -- before it runs out of cash. That's what happened to Aerocrine's chief rival, Apieron, whose assets Aerocrine picked off in 2010 in bankruptcy liquidation proceedings.

With $22 million in cash, Aerocrine is positioned to finance operations through 2012, according to one analyst report, putting a premium on increased sales for its relatively unknown asthma test.

The 15-year-old company, based on a scientific discovery made at a Swedish research institute, has developed a breath test that measures inflammation of the lungs. Existing tests measure a patient's air flow, which helps estimate breathing blockage, but don't measure the inflammation itself and can be imprecise for prescribing corticosteroids and other drugs.

To date, Aerocrine's device has a low rate of acceptance in this country because most private insurance plans don't cover it and only about 31 states cover it for Medicaid patients. The procedure is covered by Medicare.

The company has sold just 1,000 of its devices in this country and about 7,000 worldwide.

"It's a very limited use," said David Brown, president of Allergy Partners, a specialty medical practice in Asheville with 85 offices in the United States. "They've been reimbursement-challenged."

But Aerocrine has made several important breakthroughs in recent months. Last September, the American Thoracic Society validated the concept and issued guidelines for doctors on how to interpret test results. And next month, the nation's biggest insurance company, United Healthcare, will start paying for the asthma test for its 26 million patients.

The company is now trying to get insurers in this state to cover the test, including Blue Cross and Blue Shield of North Carolina, the state's largest insurer. The state-administered Medicaid program is reviewing Aerocrine's asthma test, said Brad Deen, spokesman for the N.C. Department of Health and Human Services.

Aerocrine is contending with the reality that doctors and insurers are inundated with product pitches all the time.

"It's very tough to get meetings with medical directors that are making reimbursements with new technology," Neff said.

The company's long-term strategy involves going beyond asthma specialists and selling the device to primary care doctors, pediatricians and, potentially one day, asthma patients and parents of asthmatic children, Neff said.

Aerocrine is moving to Morrisville from New Jersey. The company will receive $50,000 from the One North Carolina Fund if it meets hiring targets for jobs averaging $69,000 a year in pay, and invests $219,000 in its Wake County facility. Aerocrine CEO Scott Myers, now in Belgium, will move to the Triangle this summer.

Aerocrine's testing device costs $2,995, which is low for medical equipment, but it requires test strips that cost $15 per patient, which drives up the cost over time.

Allergy Partners, with an office in Raleigh and another planned in Chapel Hill, uses Aerocrine's breath-test devices, Brown said. The test is effective in identifying asthma patients who are not taking their medications, he said. It can also help rule out asthma in patients who have asthma-like symptoms.

"If you can promote patient adherence to medication you can eliminate ER visits, acute care and hospitalizations," Brown said. "There are many patients with chronic coughs treated for asthma -- sometimes aggressively and expensively -- and I question whether they have asthma."

Murawski: 919-829-8932

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