Tustin,CA based Oncotech, Inc. a wholly owned subsidiary of Exiqon AVS, closes its doors!
Until 9:00am this morning, June 4, 2010 Corinne (my wife) was in terms of tenure the senior employee of Oncotech, Inc. In fact she was the longest tenured employee Oncotech had ever had. At that time the parent company, Exiqon AVS (a Danish Corporation) released the following press release announcing the immediate closure and suspension of company operations. This was done without notice or official warning as specified in either the Federal or California Warn Acts!
No Severance in lieu of notice was extended to the employees. Her 20+ years of service were not even rewarded with a simple thank you! No COBRA benefits are being offered to the terminated employees even though Exiqon has another wholly owned subsidiary in the United States. And it bears noting that Exiqon had changed Oncotech’s company name to Exiqon (also without notice until that decision was scrutinized). And the building wears the Exiqon name rather than Oncotech. Exiqon was quick to make that change after its acquisition of Oncotech.
Customers (cancer patients) having had biopsy samples taken on June 3, 2010 and then assumed to be sent via FedEx for delivery on 6/4 were advised that the company's FedEx account had been closed.
Oncotech is, or should I say was, a clinical laboratory. The operation of which is subject to very strict operating criteria. Little questions I have involve patient records, HIPPA regulation as well as the company’s rather extensive tumor bank; a treasure trove of personal DNA samples not to mention substantial biohazard waste if the decision to dispose of the material is reached. Given the lack of thoughtfulness to this point I’d not be surprised to find this to be Exiqon’s chosen path!
I am convinced that Exiqon acquired Oncotech under the apparently erroneous assumption that by owning a clinical laboratory in the United States it could easily bring its Danish products to market in the USA! While personally I do find Palmetto GBA’s decision to halt payment to Oncotech for its Extreme Drug Resistance Assay unjust. I also feel Health Care Reform and its goal of reducing Medicare “Waste” just as troubling, Oncotech had fought that battle successfully numerous times in the past.
In all my years of involvement with U.S. businesses I have never seen a more insensitive callous corporate end. OK there was Enron, but I didn’t see that happen!
June 4, 2010, 12:10 p.m. EDT · Recommend · Post:
Exiqon is Closing Down Operations at Oncotech, Inc.
VEDBAEK, Denmark, Jun 4, 2010 (GlobeNewswire via COMTEX) -- Exiqon A/S (Copenhagen:EXQ) today announced that its wholly owned subsidiary, Oncotech, Inc. ("Oncotech"), will be pursuing an out-of-court liquidation conducted by a common law Assignment for the Benefit of Creditors.On 17 December 2009, Exiqon announced its intention to divest Oncotech. Exiqon has since been engaged in discussions with numerous parties regarding a possible sale of Oncotech. However, effective May 31, 2010, the Medicare Administrative Contractor in California, Palmetto GBA, has issued an LCD disallowing coverage for Oncotech's EDR tests. In light of this decision by Palmetto GBA, Exiqon has concluded that a divestment cannot be achieved and has decided to discontinue operations at Oncotech.
The decision by Palmetto GBA to disallow coverage for Oncotech's EDR testing is contrary to the policies of contractors' in other regions of the U.S., including for example Pennsylvania which allows similar drug resistance testing by a competitor of Oncotech. The effective date of Palmetto GBA's decision was subsequently extended until end July 2010, but effectively undermines Oncotech's ability to conduct its business on competitive terms.
Exiqon has been in negotiations with multiple parties regarding their potential acquisition of Oncotech. Despite interest and extensive efforts to conclude a transaction on agreed terms, negotiations have been terminated, with the reason given being the uncertainty created by the LCD. Due to the termination of negotiations and the absence of interest from other parties, Exiqon has concluded that a sale of Oncotech, Inc. cannot be achieved in light of the recent circumstances created by Palmetto GBA's decision to discontinue coverage for Oncotech, Inc.'s EDR testing.
The effect of Oncotech on Exiqon's full year's guidance, which includes Oncotech as discontinued business, is adjusted from previously announced expectations of DKK 0.00 to approximately DKK -2 million. The full year guidance for continued business remains unchanged:
For 2010, Exiqon expects total revenue of DKK 80-90 million excluding discontinued operations.
The net loss for the year 2010 is expected to be approximately DKK 40 million including non-cash costs of current incentive programs and depreciations expensed in the amount of DKK 15 million.
The effect of discontinued business, Oncotech, Inc., is expected to be DKK -2 million including reclassification of related exchange rate adjustments of approximately DKK 15 million.
All of the above expectations are based on an average USD/DKK exchange rate of DKK 5.25 for 2010.
Exiqon A/S is exploring available options for securing an optimum financial position in light of the abandoned plans for divesting Oncotech, Inc.
See the full announcement in the attached PDF or at www.exiqon.com/investor/portal
This news release was distributed by GlobeNewswire, www.globenewswire.com
SOURCE: Exiqon A/S
Categories: Cancer, HIPPA, Health Care Reform
Tags: Cobra Warn Act Exiqon Oncotech Palmetto GBA
This makes me sick....... happened to another friend of mine....... no cobra..nada
This has been a double sign of irresponsibility, not only on what Oncotech did, but on what Palmetto GBA did.
The previous CMS administrator for Medicare in Southern California (NHIC) spent almost the entire 2006 doing a extensive, transparent tech assessment of chemoresponse assays and made the decision that the assays were a perfectly appropriate medical service, worthy of coverage on a “non-investigational” basis.
What was of particular significance this time (as compared to approval for the resistance part of the testing in 2000) was that they abandoned the artificial distinction between “resistance” testing and “sensitivity” testing and provided coverage for the whole FDA-approved kit.
Why it was a local coverage decision (LCD) and not a national coverage decision (NCD)? Medicare has only about 20 doctors and 40 total clinicians working in its coverage office.
Also, Medicare doesn’t have a single oncologist on staff, yet since the year 2000, they issued 165 restrictions and directives on the use of cancer drugs and diagnostic tools. Private insurers (like NHIC), on the other hand, employ thousands of doctors and nurses to do this.
Medicare wants to put off-lable drug decision making (which some 60% of cancer drugs are) in the hands of compendia writers in the private sector, many of whom are on the payrolls of the companies that make the drugs. I am just wondering if this had anything to do with what Palmetto GBA is doing?
It amazes me that they don’t emphatically mandate this testing as a requirement for obtaining chemotherapy reimbursement against ill-directed treatments.