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Originally Published IVD Technology September 2005

Diagnostic Executive Profile

Looking toward the future

IVD executives discuss how emerging industry trends have shaped their companies’ strategic planning.

John Conroy

“Do you want me to call you back?” asks Kenneth Buechler, president and chief scientific officer at Biosite Inc. (San Diego), through the cell phone squall. Buechler has traveled to Chicago from the company’s headquarters to deliver a speech to an audience of investors. A balky connection to IVD Technology makes him sound as though he is standing in a stiff winter wind off Lake Michigan.

Squeezing in an interview before a speech to a growth-stock conference and a well-earned summer vacation is a familiar scenario for any business leader with a data-clogged Blackberry. It is certainly a scenario familiar to the three executives who shared their thoughts here on their respective companies’ fortunes, and wider trends in the IVD industry.

However, unlike other executives with hectic schedules and daily challenges, IVD industry executives have the satisfaction of knowing that their efforts contribute to the making of products that could mean the difference between life and death for a heart attack victim or cancer patient. That potential must make FDA inscrutability, investor skepticism, sky-high developmental costs, and on-the-fly interviews through fading cell phones worth the effort

Rob Lipshutz, senior vice president of molecular diagnostics and emerging markets, Affymetrix Inc.

Will the slogan “Powered by Affymetrix” become the “Intel Inside” of diagnostic technology? Rob Lipshutz, senior vice president of molecular diagnostics and emerging markets at Affymetrix Inc. (Santa Clara, CA), thinks that is already the case.

“I’d like to believe that in the IVD industry, it is the equivalent,” says Lipshutz. “We think of it that way.”
Affymetrix invented the microarray in 1989 and sold its first product in 1994, a year after Lipshutz joined the firm. The company says more than 1200 systems with the patented GeneChip technology have been shipped worldwide.

“We see the Powered by Affymetrix program as a way of demonstrating the quality and power of the microarray technology that’s built into these tests. We’re supplying the underlying platform, and our partners are taking that platform forward,” says Lipshutz.

One of those partners, Roche Diagnostics (Indianapolis), announced in January that FDA cleared a test based on an Affymetrix microarray for diagnostic use in the United States. Called the Roche AmpliChip CYP450 test, the system analyzes cytochrome P450 2D6 and 2C19 genotypes from the genomic DNA contained in a patient’s blood sample. By identifying variations in the drug metabolism genes, the system can help doctors choose the best treatments for diseases such as depression, schizophrenia, and bipolar disorder.

In September 2004, the AmpliChip CYP450 became the first test based on microarray technology to receive the CE mark for diagnostic use in the European Union. Containing glass microchips with tens of thousands of DNA fragments, the microarrays are no bigger than a thumbnail. Affymetrix also launched its GeneChip system 3000Dx, the world’s first microarray system for clinical diagnostics. The test examines genetic variations that hinder the effectiveness of drugs and cause adverse reactions.

More developments followed. In June, Affymetrix launched the next-generation GeneChip scanner 3000 7G. The device scans 5-µm features and enables an increase in genomic content of 500% over the previous arrays. The scanner supports the latest high-density, high-information-content microarrays for tiling, all-exon, and single nucleotide polymorphism genotyping research.

Lipshutz says that when he joined Affymetrix in 1993, he “came in with the view that this is where we were going. But it’s hard to say whether it’s on the schedule I expected.” Recent developments with the P450 genes are based on 20-year-old discoveries, he notes, adding, “I would say it was a combination of the markers catching up to the technology and the technology catching up to the markers.”

The semiconductor industry’s relentless ability to shrink device sizes continues to aid the life sciences, Lipshutz says. “It enables you to look at more and more information and interrogate the genome in greater and greater detail,” he says. “That same aspect of the technology also enables you to pack more information into a smaller space.”

Lipshutz asserts that this factor was one of the reasons Affymetrix chose photolithography over other potential manufacturing methods to make its arrays. The technique, common to semiconductor manufacturing, also enabled the firm to follow a solid good manufacturing practices path when it built its first factory in Sacramento. “We built quality into our entire process up there,” he says. “Over the last couple of years, as we began working with Roche, it was a reasonably straightforward step to meet the quality standards needed for diagnostic products.”

Molecular diagnostics technology is on the upswing, Lipshutz believes, adding, “I think the level of acceptance is continuing to grow.” The new tests have emerged after a long period of basic research into clinical practice. “It’s the gradual build-up of additional scientific information and clinical results in these areas,” he says. “I think we’re going to see an acceleration of those results.”

Lipshutz believes the IVD industry is in the process of prioritizing the vast amount of work done in research labs, clinical research settings, and medical centers. The challenge that the industry must address now is to start picking out the highest-priority signatures and the great unmet needs that people have from a healthcare perspective, and move those forward.

Lipshutz says Affymetrix is “at the very beginning of the rollout of these kinds of technologies and this kind of testing.” He believes the use of microarrays will become a significant component of diagnostic technologies.

Lipshutz notes that Roche has talked fairly broadly about developing multiple tests on the Affymetrix platform over the next five years. He believes the earliest product will address cancer, because the “significant unmet needs are very well matched with the technology.”

Affymetrix continues its developmental pace. In June, the company and one of its partners, ParAllele BioScience (South San Francisco, CA), announced the MegAllele line of assays for SNP genotyping. The launch followed Affymetrix’s May announcement that it was buying ParAllele, which specializes in novel biochemical processes for analyzing variations in the human genome.

Lipshutz says the acquisition “builds on our overall technology base, expanding the portfolio of assays we can host on an array with applications in research diagnostics and applied fields.”

William Kozy, president, BD Diagnostics

Describing the state of research into biomarkers and proteomics, William Kozy, president of BD Diagnostics (Franklin Lakes, NJ), turns to the classic iceberg story. “If you think about the big iceberg, right now people have access with existing technologies to maybe a couple of hundred proteins,” he says. “Well, we know that there are thousands of proteins carrying valuable pieces of information.”

BD Diagnostics’ Free-Flow electrophoresis tool is designed to help researchers peering at that tenth of the iceberg jutting out of the water to discover, identify, and recover the low-abundance proteins in the other nine-tenths. “These are the ones that are way below the waterline, that nobody has been able to get at before,” Kozy says.

Recently, BD Diagnostics has taken further steps to strengthen its capability in this area. In May, the company—a business segment of the $4.9 billion medical technology giant, BD—bought the technology and other assets of FFE Weber of Munich for an undisclosed sum. The German firm specializes in the separation and fractionation of complex proteins.

The acquisition will help BD Diagnostics further compete in the proteomics arena, which has taken on increasing importance in diagnostics and other medical research segments. That growing interest puts more pressure on companies focused in that area to improve protein separation capabilities.

In a statement released at the time of the FFE acquisition, Kozy noted that the need “to improve and eventually standardize the preanalytical process leading to protein analytics is significant.” Calling for new techniques for both clinical sample collection and processing, Kozy believes the acquisition of FFE Weber gives the New Jersey firm a leg up on such separation technology for helping proteomics researchers in their search for new biomarkers.

Proteomics is “purely in the academic and government research laboratories at this point,” Kozy insists. The FFE acquisition “is one step to get ourselves into this industry with a proven technology, and then to move into the other preanalytical opportunities that we’d like to use if this industry evolves the way we think it’s going.” Kozy expects development to take between 5 and 10 years “for true clinical diagnostic applications.”

The clinical diagnostics market does not lack other challenges, the executive says. “Generally speaking, one of the primary hurdles is affordable innovation that brings both favorable economic and patient outcomes,” says Kozy. “It’s just not a world anymore where you say, ‘Here’s a $2000 test. If you run it, it’s going to help.’”

Kozy emphasizes that his biggest challenge as head of the diagnostics business is focusing on innovation in an industry “with several categories of significant maturity” in areas such as chemistry and microbiology. “You’ve got to show that the positive outcomes are not just clinical and not just on the economic side,” he says.

The introduction of the BD Phoenix automated microbiology system in the United States in January is a good example of a product platform that “really touches both of those bases,” Kozy says. “We’re going to tell the customers we can help them with their clinical outcomes and their economic performance as well.” The fully automated system is designed to help labs identify and conduct susceptibility tests for clinically relevant bacteria.

The Phoenix launch was perhaps a case study as well on how an IVD firm navigates the regulatory terrain, particularly with a groundbreaking product. “We have invested heavily in regulatory capability over the last several years,” Kozy says. “I guess like everybody else in the industry, I would call it challenging. I would also call it reasonably predictable.”

Well-established in the business segments they’re in, BD Diagnostics expected the launch of a major new platform such as the Phoenix instrument to have its share of rough moments. Nevertheless, Kozy says, “It took longer and cost us more than we thought it would.

“It’s a very interesting process right now, because the Phoenix met a series of much higher regulatory standards than any previous automated identification and antimicrobial susceptibility testing systems,” he adds. The continual evolution of the regulatory hurdles both delayed the launch and added to the developmental costs for an instrument that aids in bacteriology identification of disease-causing organisms, Kozy notes.

“It took longer than we thought it would and it cost more, but it’s the only instrument right now that meets these new hurdles,” he says, “because they keep raising the bar.” Clearing the hurdles required BD Diagnostics to spend 15–20% more than expected in development costs, Kozy estimates.

The executive notes that the company’s leadership guidelines help keep these matters in perspective. “We challenge people here to think about the patient first, then think about the customer.” Kozy adds: “It’s very easy to take your eye off the ball. I could worry about the regulatory climate, and I do. I could worry about the government’s healthcare policies, and I do. But we ask our leaders here to please not lose sight of whatever they’ve got to do to impact healthcare. It’s really about the patient.”

Kenneth Buechler, president and chief scientific officer, Biosite Inc.

Seven years after the introduction of its first product, the Triage drugs of abuse panel, Biosite launched its Discovery program. The internal research institute works with academic researchers to determine the correlation between protein levels and diseases. Kenneth Buechler, the company co-founder, asserts that the program is one of the keys to the success of the San Diego–based firm.

“We spend about 15% of our revenues on R&D,” says Buechler. “That’s a fairly sizable amount of money. We use it to develop all these products and panels we’re interested in. I think this differentiates us from other companies that do this kind of work.”

The executive says the program opens opportunities for the company. “It’s one of the avenues we have to get panels for markers,” says Buechler. “In addition, we license markers from outside sources, so we have fairly open minds as far as getting markers for these particular disease states.”

Buechler says Biosite lately has trained its sights on three conditions: stroke, acute coronary syndrome, and sepsis. The company’s working hypothesis is that a single biomarker is insufficient to diagnose medical conditions, given the complicated nature of the diseases the company is studying. The diseases have different etiologies and severities, he emphasizes.

Using panels of markers for simultaneous measurement, Biosite takes the different markers in concentration to calculate “a single value called the ‘multimarker index,’” Buechler points out. This index behaves as a single analyte.

Buechler notes that breakthroughs in the proteomics world that Biosite inhabits are hard to predict because “most of the proteins have been identified. These genomes have already been identified. The question is: Is one going to find a new protein? I would never say you’re not going to do that. But there are so many proteins available that, with the ones that exist, we can get a very good handle on these complicated diseases.”

Since the first product launch, Buechler says he has seen “more and more emphasis on point-of-care testing.” Upon its introduction, the drugs of abuse panel “wasn’t really used in point of care. It was used in hospital laboratories.”

No longer used mainly in labs, Biosite’s panels today are found increasingly in emergency rooms and next to hospital beds. The company is seeing between 5 and 10 of its tests in different areas of emergency departments, Buechler notes, adding, “this gives better patient care.”

“We believe that it’s very important to get the diagnostics for the patient much closer to the patient,” Buechler explains. “Because the closer it is to the patient, the quicker the results, and the quicker the results are known to the physician, the better the physician can make an adjustment much more quickly. It’s fairly well-known that the sooner a patient is diagnosed and therapy is given, the better the outcome, particularly for acute conditions such as stroke, sepsis, and drug overdose.”

Medical laboratories are resisting this trend, to the detriment of patients’ well-being. “I wouldn’t say we’re over the hump,” says Buechler. “There’s a trend to increased point-of-care testing, but it’s still a battle because of the dynamics in the laboratories. The laboratories want to dominate testing. They don’t want to lose any revenues to any other departments in the hospital. It’s still a challenge.”

A new product development announced by Biosite in June 2005 reinforces Buechler’s point of view. The company announced that it is developing a second-generation version of its Triage cardio Profiler panel that will include myeloperoxidase (MPO), a biomarker of inflammation in the walls of coronary arteries. The panel is used in emergencies for patients with chest pains.

Citing research conducted at the Cleveland Clinic, Biosite says that a person showing an elevated level of MPO could be at risk for either heart disease or a heart attack. In addition, research published in the New England Journal of Medicine shows that of the 25% of patients studied with the highest MPO levels, at least 38% of them had a heart attack within 16 hours, Biosite says. The company will begin clinical trials of the upgraded panel by September and plans to file a premarket 510(k) notification with FDA by the end of 2005.

Asked how he would characterize the regulatory environment in the United States, Buechler replies, “I think FDA is getting more cautious about what they approve. I think they’re worried about safety, and that’s a good thing. It’s just our duty as a commercial entity to give them what they want in order to make them feel comfortable that what we’re putting in the market is going to actually help people.”

John Conroy is a freelance writer in Los Angeles.

Copyright ©2005 IVD Technology