Business Overview and History
Aspira Women's Health Inc. was founded in 1993 with a focus on developing diagnostic tests for gynecologic diseases, particularly ovarian cancer. The company achieved a significant milestone in 2009 when it received FDA de novo classification for its Ova1 test, the first FDA-cleared blood test for assessing the likelihood of malignancy in women with an ovarian adnexal mass planned for surgery.
In 2016, Aspira received FDA 510(k) clearance for its Overa test, an updated version of Ova1 designed to maintain high sensitivity while improving specificity. These tests are marketed as the OvaSuite product line and distributed through Aspira's national sales force and partnerships with BioReference Health and ARUP Laboratories.
The company has faced challenges, including a decline in revenue and increased operating expenses in 2022, partly due to the COVID-19 pandemic's impact on healthcare utilization. In response, Aspira implemented a revised commercial strategy in the second half of 2023, focusing on enhancing its sales and marketing teams' profitability, efficiency, and effectiveness.
Aspira operates its own CLIA-certified laboratory, Aspira Labs, which specializes in applying biomarker-based technologies to address critical needs in gynecologic disease management. The company continues to invest in research and development, including the development of new diagnostic tests for conditions such as endometriosis.
Financial Performance and Liquidity
Aspira's financial performance has been characterized by steady revenue growth coupled with persistent net losses, a common trend among diagnostic companies investing heavily in R&D and commercial expansion. In fiscal year 2023, the company reported revenue of $8.18 million, up from $6.81 million in 2021, while net losses totaled $29.89 million and $31.66 million, respectively, for those years.
For the third quarter of 2024, Aspira reported revenue of $2.26 million, representing a 2% increase year-over-year. This growth was primarily driven by the success of the OvaWatch test, which saw a 27% increase in test volume compared to the same period in 2023. The average unit price (AUP) for OvaWatch also improved, rising 4% to $360 from $347 in the prior year quarter. Despite the revenue growth, the company reported a net loss of $3.55 million for the quarter.
The company's gross margin improved to 60% in the third quarter of 2024, up from 59% in the prior year quarter. This improvement reflects the company's efforts to enhance operational efficiency and reduce costs. For the nine months ended September 30, 2024, the gross profit margin for product revenue increased to 58.4%, up from 57.5% in the prior year period, driven by a decrease in the cost of product revenue.
Aspira's liquidity position has been bolstered by several strategic financing transactions in recent years, including a $48.23 million common stock offering in 2021 and a $5.56 million registered direct offering in 2024. As of September 30, 2024, Aspira had $2.13 million in cash and cash equivalents, with an accumulated deficit of $530.01 million. The company also has a $4.45 million at-the-market equity offering program, of which $4.1 million remains available as of November 18, 2024.
The company's debt-to-equity ratio stands at -0.85, while its current ratio is 0.752 and quick ratio is 0.699. These metrics indicate that Aspira faces some challenges in terms of short-term liquidity and financial leverage.
Despite the company's ongoing net losses, management has stated that revenue from its OvaSuite product line is expected to be the primary, recurring source of cash in 2024. The company has also secured non-dilutive funding through the ARPA-H award, which it expects will help accelerate the development of its endometriosis diagnostic.
Product Portfolio and Pipeline
Aspira's current commercial product portfolio consists of the OvaSuite, which includes the Ova1Plus workflow and the OvaWatch test. The Ova1Plus workflow combines Ova1, a qualitative serum test, and Overa, a second-generation biomarker test, to aid in assessing the likelihood of malignancy in women with an ovarian adnexal mass. This helps guide surgical decisions when a physician's initial clinical and radiological evaluation does not indicate malignancy.
The OvaWatch test, launched in 2024, has been a key driver of Aspira's recent growth. OvaWatch is a non-invasive blood-based risk assessment test used in conjunction with clinical assessment and imaging to determine ovarian cancer risk for patients with an adnexal mass deemed indeterminate or benign by the physician's preliminary evaluation. It is the only commercially available blood test for this specific application.
In the third quarter of 2024, Aspira delivered over 6,000 OvaSuite tests, representing a 4% increase compared to approximately 5,783 tests in the same period of 2023. The company has also improved its sales efficiency, with the number of tests per sales representative increasing by 21% for the nine months ended September 30, 2024, compared to the same period in 2023.
In October 2024, Aspira announced that it had received approval from the New York State Department of Health for OvaWatch, a significant milestone that expands access to the test in one of the country's largest healthcare markets. The company has also partnered with BioReference Health to add OvaWatch to its test menu, further bolstering the test's commercial reach.
Looking ahead, Aspira's pipeline is anchored by two key initiatives: OVAinform and ENDOinform. OVAinform is a multi-marker test that combines serum proteins, clinical data, and microRNA (miRNA) biomarkers to improve the assessment of ovarian cancer risk in women with adnexal masses. The company has collaborated with researchers from Harvard's Dana-Farber Cancer Institute and Brigham and Women's Hospital to develop this test.
The company's most significant pipeline project is ENDOinform, a non-invasive, multi-marker blood test for the detection of endometriosis. In October 2024, Aspira announced that it had been selected by ARPA-H to receive a $10 million award to fund the development and commercialization of ENDOinform. This prestigious grant not only provides crucial capital but also validates Aspira's capabilities in women's health diagnostics and positions the company as a leader in the endometriosis testing market, which is currently underserved. The company expects to complete and commercially launch ENDOinform within a 2-year timeframe, supported by the ARPA-H funding and access to subject matter experts and advisors.
Competitive Landscape and Risks
Aspira operates in a competitive women's health diagnostics market, with several established players and emerging competitors. Key rivals include Myriad Genetics, Vermillion, and Biodesix, all of which offer ovarian cancer risk assessment tests. Additionally, the company faces potential competition from pharmaceutical and biotechnology companies developing novel therapeutics for gynecologic conditions like endometriosis.
One of Aspira's key risks is its reliance on reimbursement from third-party payers, such as private insurance companies and government healthcare programs, for its products. The company's ability to achieve widespread adoption and drive revenue growth is heavily dependent on securing favorable coverage and payment policies. Aspira has made progress in this area, with its Ova1 test covered by Novitas Solutions, a Medicare Administrative Carrier, but continued efforts to expand reimbursement will be crucial.
Another risk factor is the company's history of net losses and the need for additional capital to fund its ongoing operations and product development initiatives. While Aspira has successfully raised capital through various financing transactions, including the recent ARPA-H award, its ability to continue as a going concern is dependent on its success in securing further funding or achieving profitability.
Outlook and Conclusion
Aspira's transformation from a single-product ovarian cancer risk assessment company to a diversified women's health diagnostics innovator has been a remarkable journey. The company's strategic focus on expanding its product portfolio, strengthening its commercial capabilities, and securing non-dilutive funding has positioned it for continued growth and innovation in the years ahead.
The successful launch of OvaWatch, the company's approval in New York State, and the prestigious ARPA-H award for the development of ENDOinform are all significant milestones that underscore Aspira's technological leadership and commitment to addressing unmet needs in women's health. As the company continues to advance its pipeline and execute on its commercial strategy, investors will be closely watching its ability to drive adoption of its current products, secure favorable reimbursement, and deliver on the promise of its innovative diagnostic solutions.
Looking forward, Aspira has reiterated its guidance for cash used in operations in 2024 to be less than $14.5 million. The company expects research and development expenses to increase over the fourth quarter of 2024 as it focuses on accelerating the ENDOinform development plan in connection with the $10 million ARPA-H award. This investment in R&D is crucial for the company's long-term growth strategy and its ability to expand its product offerings in the women's health diagnostics market.
Despite the challenges of operating in a highly competitive and capital-intensive industry, Aspira's steadfast focus on women's health, combined with its growing portfolio of cutting-edge diagnostic tools, makes it a compelling investment opportunity for those seeking exposure to the dynamic and rapidly evolving women's health diagnostics market. The company's ability to execute on its growth initiatives, improve operational efficiency, and successfully commercialize its pipeline products will be key factors in determining its future success and financial performance.