Medical Device Link.

Originally Published IVD Technology March 2004

In Person

Hans-Juergen Loyda, PhD, is  group marketing manager, reagents—clinical chemistry and immunoassays in the Centralized Diagnostics Division of Roche Diagnostics (Basel, Switzerland).  He can be contacted here.

As new disease targets are discovered and new diagnostic technologies emerge, IVD companies must deliver clinically valuable and user-friendly tests to the marketplace. In order to make use of new discoveries while meeting the needs of those who perform the tests, IVD manufacturers must take both a strategic business and knowledgeable scientific approach to assay development. Such a fine balance of industrial expertise and marketing know-how serves as a fundamental component of the success of IVD market leaders such as Roche Diagnostics (Basel, Switzerland).

In order to discover the central ideology behind how major IVD companies pursue their assay development programs, IVD Technology editor Richard Park spoke with Hans-Juergen Loyda, PhD, group marketing manager, reagents—clinical chemistry and immunoassays at Roche Diagnostics. In this interview, Loyda discusses criteria IVD manufacturers should consider when deciding whether to develop a new assay target into a marketable test, the challenges manufacturers face when developing new tests, and upcoming trends in assay development. 

IVD Technology: What have been the biggest technological advances in assay development during the past few years? 

Hans-Juergen Loyda: That question can be answered from two perspectives. First, we must consider what tests will have a significant diagnostic impact on the way we assess diseases, manage treatment, and practice medicine. Because of such an impact, diagnostics like natriuretic peptide testing have seen a tremendous growth in the marketplace. The market for that type of test is estimated to be hundreds of millions of dollars. Within the last three years, we have seen at least $150 million growth in natriuretic peptide testing alone. Overall, we expect the market for cardiac tests, the category in which natriuretic peptide testing falls, to be $200 million to $350 million. So, in the cardiac market segment, there has been almost a 50% increase in revenue overnight. The end of that growth trend is not yet foreseeable due to the value that the parameters generated by the tests offer to the marketplace. 

The second perspective to consider is where the basic technological advances have been. From a technological standpoint, we have new chip-based nucleic acid tests, which are now moving from research to a demonstration of clinical relevance. These technologies will bring about more personalized treatments. For instance, HIV-resistance testing will show us the resistance of a specific patient to a specific treatment. Nucleic acid testing will have an impact both in terms of pure technological advancement, and in the way in which and the effectiveness of how medicine is practiced. 

Evaluating a Test’s Potential

How do you determine the total size of the market for a particular diagnostic assay, and how do you assess the potential growth of that market?

Let’s consider the example of natriuretic peptide testing. Both the research community and the IVD industry have been able to show that C-type natriuretic peptide (CNP) has implications for acute myocardial infarction, which will allow the test to be of use to patients with chest pain. 
We have done some initial estimations and have found that the annual testing volume should be 70 million tests. We then consider what prices are achieved in the marketplace. The cost of the assay is between $20 and $25 for each test, so if you multiply the number of tests by the price per test, you will have calculated the potential revenue of the assay. 

We also have to be aware that with increased demand, prices will go down. And the value of the test results we can convey to the healthcare community, in terms of the healthcare cost savings versus the test price, will have an impact on slowing or avoiding price erosion. 

There is concern that with this advanced testing, cardiologists will lose that income. But at the end of the line, I do not think so. This approach will put the critical patients in front of the cardiologist earlier, and the cardiologist will be able to treat those patients earlier. They will see more patients when they can intervene much more effectively to prevent progression of the disease. 

So if I understand what you are saying, the value of a new diagnostic assay lies in how it will benefit the patient, the healthcare provider, physicians, IVD manufacturers, and probably healthcare in general. 

Yes. The real challenge is to deliver information to healthcare professionals that will allow them to better deal with disease. The information should allow them to better manage patients through the progression of disease, detect diseases earlier for earlier intervention, and in the case of genetic testing, to identify a predisposition for disease before the onset of the disease. The real value of any test can be determined by whether it provides a physician with actionable healthcare information. If a manufacturer can demonstrate this, then the test will be successful on the market. If not, the test will be just an academic exercise. 

From a fiscal standpoint, what factors must major IVD manufacturers consider when developing assays that are going to be used on their instrument systems?

The first and most important factor is whether the test has clinical validity and whether the information it generates will add value to the marketplace in general. Once this has been determined, it really is critical to determine whether the test will generate the return our shareholders need us to generate. The bigger the opportunity and the lower the risk, the more likely it is that we will take on a new project. 

At the end of the day, the industry is in the business to make money. And as long as we keep that in mind and we have the proven clinical utility, then we have to be able to make it big. Otherwise, the cost required to produce a new test, to invest in our infrastructure, and maintain and distribute the test on a worldwide basis may outweigh its clinical benefit. Sometimes production can be scaled down and geared specifically toward a certain country. But at the end of the day, we must deal with the demands of the economy. If we can generate a return for the investors, the test will fly. If not, it might appear for a short period of time, but it will go away.

Staying Ahead of the Curve

What have been the latest trends in assay development? 

Making the sample size for each test smaller so that as much information as possible can be taken from each sample. The smaller the necessary sample size, the better the test. That calls for the miniaturization of devices. As chip technology is developed for nucleic acid testing, the amount of sample we need from a patient is getting smaller and smaller. 

There are even some trends emerging with regard to noninvasive technology. Today we need to take blood or some other sample from the patient. Down the road, the vision is to develop technologies that do not require extraction of a sample. Such technologies have been in discussion for a long time without a breakthrough in technology. An awful lot of research and development work still needs to be done, but noninvasive IVD testing still is on the drawing boards of the industry. The more we learn about the functionality of the body, the energy of a working body, the bioelectricity, the more insights we are likely to gain. But as of yet, I am talking really science fiction.

What primary challenges do IVD manufacturers encounter in assay development? 

The primary challenges for the IVD industry are really in the demonstration of clinical validity—in generating rock-solid clinical data. That challenge is particularly relevant for genomics and proteomics, those technologies that will allow us to determine which patient is resistant to what type of therapy. 

Exciting things are happening technologically in that arena, but at the end of the day, we need to demonstrate the clinical usefulness of those tests. We are just starting to get a handle on the technology. We are now able to use diagnostic technology to find those proteins that allow us to see if certain genes are turned on or turned off. When the genes are turned on, the patient might show a resistance to a certain drug. That type of information will be very valuable to practitioners, and to the efficacy of drug therapy in general. 

Today, the only way to discover a patient’s resistance to a drug is when you apply a drug to a patient and the patient does not improve. Genomics and proteomics will eventually allow us to identify drug-resistant patients before very expensive therapies are applied to them, and to identify patients for whom therapies will be particularly effective. 

Is providing rock-solid clinical data essentially assuring your buyers of the sensitivity and the specificity of the assay?

That is only covering the analytical part of it. We need to be very careful not to assume that analytical performance is equivalent to clinical performance. For example, there is one parameter that, in theory, can help us to identify the 1% of the population with a particular genetic defect that predisposes them to developing myocardial infarction. These are people who may die in their 30s of a heart attack. For a long time, it has been suggested to the community that the marker identifies an at-risk population, but when looking into the clinical data, I have never seen a strong connection. 

When high-sensitivity C-reactive peptide (hsCRP) testing was developed, the developer not only created the test, but also was able to show that hsCRP has clinical relevance for those patients with no cholesterol problems, but who developed cardiac disease. The clinical relevance was essential to the success of the test.

Seeds of Innovation

What impact have collaborations between IVD manufacturers and academic researchers had on developing assays? 

That is actually a very exciting topic. Even in a large company like Roche, we need to be realistic. We only have limited resources in terms of basic discovery. There are only a few IVD companies that are, from a financial standpoint, healthy and expected to survive the next 10 to 15 years. So in that environment, the resources for research and development are really limited. 

We need academics for target discovery. We need them to find new markers that have the potential of showing clinical validity. Academics discover those targets and provide the preliminary validation, and then IVD manufacturers use the targets to develop a product that will be used easily in a lab without disrupting any workflow. The easier a manufacturer can make an application, the better. When you look at the majority of new tests, academics are a strategic component of discovering and further developing an IVD manufacturer’s diagnostic portfolio. 

The number of innovative ideas coming into the marketplace that have found a role in the diagnostic world is exploding. Ten or 20 years ago, we probably had 60 different tests to work with. Today, practitioners might have up to 2000 different tests. In order to make that level of innovation possible, we absolutely cannot rely only on the industry.

Often when academics recognize the relevance or the potential relevance of a particular marker for a diagnostic test, they will form a startup company. Many of those startup companies develop their tests only to a certain level until a large company like Roche takes the pilot product and makes it a large-scale marketable product. This is one way in which industry and academia work together. 

As a result, we no longer see a large separation between academics and industry. There is this in-between area where a healthy group of small biotech startup companies serve as the breeding ground for innovation—innovation not only from an intellectual standpoint, but also from a commercial standpoint. 

What type of formal agreement or relationship do large companies such as Roche make with researchers and academics? 

A relationship may begin with a company, such as a clinic or academic institution, that starts out as a customer. Other examples of relationships between academia and industry are when large companies like Roche acquire startup companies, as I mentioned earlier. In addition, there are other possibilities where Roche will simply license a technology from a smaller firm or an academic institution. 

The path we take depends upon the value we see the technology generating for our shareholders. If we believe that we can generate a strong return for our shareholders, then we will take a more aggressive approach to acquiring a company so that we have exclusive access to the technology. If we see that the technology will simply generate a nice complementary product to our product line, we will probably take a more laid back approach and just take a license or something in-between. 

IVD companies have to be flexible, and they have to respond in an appropriate way to the people who are offering them the technology. Manufacturers can’t approach partners with a “one way or the highway” attitude. 

When entering into a technology development partnership, IVD manufacturers are talking to individuals who are proud, and have all the reasons in the world to be proud, of what they have accomplished. In general, it is my experience that the more flexible a company is in responding to its partner’s need, the more successful it can be. Manufacturers need to view technology partners like they view their customers. The customer tells us what it wants, and we had better deliver if we want to be successful.

When working on diagnostic assays, do you have to coordinate work between an assay development and an instrumentation division to decide whether an assay should be developed for a particular instrument, or whether a whole new instrument has to be developed? 

Yes. What we are talking about here is economy of scale for our laboratories. If you have a brilliant test and you need to develop an expensive piece of equipment to perform the test in the laboratory, I can guarantee that your customers will resist this. Today there is labor shortage in this marketplace and when new tests are complicated to perform, they have to be extraordinarily good to be successful. 

The first consideration for developing a new assay is whether it will be adaptable to the large-scale analyzers we have. If we cannot run it on our analyzers, then we will need to find a more assay-specific route for instrumentation. For many years, that was the challenge we faced when developing any kind of genetic testing. The genetic testing could not be automated to the point of being hands-off.

The more hands-off testing can be, the better. Ideally, you want a laboratorian to be able to drop a tube on an analyzer and generate a result. From an instrumentation standpoint, we need to be able to apply new tests to an instrumentation technology that will allow us to run the test on a large-scale basis. 

How do you find out what laboratories and your customers need the most from their assays? 

In a laboratory’s day-to-day challenges, laboratorians or pathologists will know very well what their challenges are, and be able to advise us of them. So, we use focus groups and we use routine surveys. We use our day-to-day contacts with our customer. We also hold customer feedback meetings, which provide us with lots of ideas and concrete projects for how to improve products. 

However, when we take on innovative projects, such as natriuretic peptide testing, we take less of a broad, customer-suggestion-oriented approach. More often, such innovative projects will be developed by talking to experts. Those experts have minds that will never rest until they find the specific solution to what they envision as a major improvement in diagnostics. From my perspective, we need input from both sources. 
We need to care for the routine needs of our customers, even as those routine needs are changing. When we incorporate those ideas into the refinement of our existing products, I would call this product portfolio optimization. 

When you look at the IVD marketplace, most of the assays generate results that will be relevant to our entire population. Even some tests that have a relatively small testing volume, like AIDS tests, still have a large number of patients every year who need to be tested—too many to be able to afford a cumbersome technology. 

Breaking New Ground

How have developments, or even a lack thereof, in molecular diagnostics affected assay development efforts? 

For a long period of time, the lack of automation was a hindrance to fast market penetration. Today, I do not see the hindrance any more. In fact, molecular type testing has become an integral part of practitioners’ approach to treatment. 

When you are looking at the convenience to the end-user, there is still a difference between traditional in vitro diagnostics and molecular. But molecular has found its way into the routine laboratory. From Roche’s perspective, these tests are part of our diagnostic activities and one of the fastest growing areas in our portfolio. This is one of the reasons why we are a major player in the world market, because we made these cutting-edge developments happen for the marketplace. 

A more recent area of active development for IVD technologies has been biodefense and bioterrorism concerns. How have the increased interest and concerns over the past several years affected assay development? 

When I consider centralized diagnostics, I would say that these efforts have not affected development at all. However, it has impacted our company overall. We have collaborated with some key customers like the Mayo Clinic (Rochester, MN) to develop a quick response test that could be used to address bioterrorism concerns. But such efforts are clearly short-term responses to a need in the marketplace. 

Most of these tests will not have a broad diagnostic use from the traditional standpoint. I am proud of the responsiveness we have to the needs of our applied science divisions. But the development of bioterrorism preparedness products has not proven to be a large-scale product line. From that perspective, this type of test development is more a niche activity. 

The real difficulty when developing products that will be used as protection against bioterrorism is determining what you are testing for. When you think about all the crazy ways a person can go about performing acts of bioterrorism, you realize that there are thousands of approaches. 

Once a company has developed a test, unfortunately, there will be bright minds finding a way around that test because that weapon was developed to hurt and kill people. And as soon as you develop a defense for a biothreat, other people will find a way around it. That is the challenge here. I am not saying that developing effective tests is not possible or that it is irrelevant, but the test needs to be usable. We cannot put out something that eventually captures 1% or even less of the potential threats, because still we are exposed to a tremendous risk. 

I am not trying to minimize the problem and I am not trying to discourage efforts toward innovation. I’m just trying to describe the challenge of determining what is important for clinical utility. And it does not mean any good to our country, to the society, if we just keep generating an idyllic image and calling for comfort in the form of warm fuzzies. We need to develop tests that can really help to save people’s lives. And there is the challenge.

What future challenges will emerge in assay development and what new trends can we expect to see in the future for assay development? 

There are three major areas of focus for the future of assay development. One area is test sensitivity. This applies to all IVD testing, from a normal blood test to genetic testing. Ideally, we will want to be able to find one gene in one sample that has the mutation you are screening for. In essence, we should be able to detect one molecule that will have a devastating impact on whatever it does in the body via its effect on the cell metabolism. Thus far, we have driven sensitivity down to a few molecules. 

Another area of focus for assay development is to learn more about how the body changes on a molecular level over time, with regard to genomics and proteomics. Our body is constantly being rebuilt and we continually have new mutations and isoforms. Over the lifetime either of a patient or an entire population, one molecular target might change. As a result, we have to recognize the nature of the targets we try to detect. If they keep changing over time due to their biological makeup, we need to be able to adjust our tests so that they keep their validity. 

Lastly, when we develop multiparameter, multiplex test chips, or when we run several tests out of one tube, we need to avoid interference between the tests. We need to have a distinct result—a specific answer for each test on the chip. The specificity for each individual result and the lack of interference between the different tests is very critical. 

Copyright ©2004 IVD Technology