DermTech, the San Diego biotech making a skin-cancer detecting patch, cuts 15% of workforce – San Diego Union-Tribune

DermTech, the San Diego biotech making a skin-cancer detecting patch, cuts 15% of workforce – San Diego Union-Tribune

DermTech, the San Diego biotech making a skin-cancer detecting patch, cuts 15% of workforce – San Diego Union-Tribune

Author: Natallie Rocha
Published on: 2024-02-06 13:49:36
Source: Technology – San Diego Union-Tribune

Disclaimer:All rights are owned by the respective creators. No copyright infringement is intended.


DermTech, a San Diego biotechnology company that developed a noninvasive melanoma test, is reducing its workforce by 15 percent to shave off operating expenses.

The company announced last week that it would reduce its headcount by about 30 people, most of whom are based in San Diego. Additionally, DermTech parted ways on Friday with its chief operating officer, Claudia Ibarra. She joined DermTech in 2019 and has more than 25 years of experience operating clinical laboratories.

Less than a year ago, the biotech underwent a similar restructuring to cut costs, streamline operations, suspend certain projects and try to boost revenue. In June, DermTech laid off 40 workers, which accounted for about 15 percent of its total workforce of 280 people.

Last year’s restructuring strategy followed a change in leadership in May. The company says the latest workforce reduction, combined with the previous one will save the company about $40 million in operating expenses.

In a statement, DermTech CEO Bret Christensen reiterated the company’s commitment to allocating its money efficiently to boost revenue in 2024.

“Growing revenue remains our primary objective and we began to see meaningful improvement in many of our top-line and operating metrics during the third quarter of 2023,” Christensen said in the announcement. “Our realigned commercial tactics and focus on reimbursed tests has yielded improvement in nearly all of our key performance indicators. We must continue to refine our approach as we learn more and be determined to achieve these goals with a lean organization and by aligning behind only the highest ROI opportunities.”

San Diego’s DermTech trims staff to conserve cash as it pushes scalpel-free diagnostic test for melanoma The restructuring is expected to be complete by the end of March, and it will cost the company about $1.3 million.

The goal is also to focus its resources and revenue growth on the company’s melanoma skin test. The novel, non-invasive genomic approach to detecting skin cancer relies on a smart sticker that is placed on a mole or dark skin patch. Rather than using a scalpel to collect skin tissue, the sophisticated sticker gathers samples from sensitive areas such as the neck, face and chest.

The samples are then sent to a certified laboratory where the results are processed.

The commercial test has not been reviewed or approved by the U.S. Food and Drug Administration. However, DermTech’s melanoma test has gained insurance coverage with a growing number of groups including Medicare, Veterans Affairs and certain commercial insurers.

The tests are marketed to dermatologists, with a focus on areas where DermTech has achieved coverage. The company increased its patient coverage for the test by about 45 percent last year.

DermTech, which went public in 2019 through a reverse merger, is not profitable, though that is not unusual for biotech companies developing novel products. The company is also researching and developing noninvasive skin patches for evaluating inflammatory skin diseases, such as atopic dermatitis and psoriasis.

The company recorded $14.5 million in revenue during 2022 — the most recent full-year results — a 23 percent increase from the prior year. But, it also reported a $116.7 million loss in 2022, compared with a $78 million loss in 2021.

DermTech reported 2023 thirdquarter revenue of $3.9 million, a 10 percent increase from the previous year, during its most recent quarterly earnings in November. The increase was attributed to higher test revenue due to a higher average selling price for the DermTech melanoma test.

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