BEYOND CLINICAL APPLICATIONS
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Researchers at the California Animal Health and Food Safety Laboratory and Lawrence Livermore National Laboratory demonstrated that the Newcastle disease virus could be detected using an environmental air sampling system, which is much less labor-intensive and time-consuming than conventional swab sampling.
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Notable for their slightly more prosaic origins, similar stories of viral, toxic, or bacterial misadventures have made news of late. In France, government authorities reported finding cases of a possibly deadly strain of H5N1 bird flu on a turkey farm. In the United States, 60% of Americans are worried about the spread of the virus, according to a new poll. A cat in Germany died after reportedly eating an infected bird. And in early February, at least a dozen U.S. senators and 200 staff members were quarantined in a parking garage of a Senate office building after a nerve gas alarm sounded. They were permitted to leave three hours later when tests proved negative.
A routine cleaning substance may have triggered the attic sensor that set off the alarm at the Russell Senate Office Building. However, the false alarm points to just one of several challenges facing nonclinical diagnostic testing: getting the right reading in a rough, uncontrolled environment. By the same token, a senator’s spokesman mentioned in a newspaper account of the evacuation that false alerts have become a fact of life for lawmakers and their staffs. “We get a few of these a day,” the spokesman told the Houston Chronicle.
As these stories attest, challenges and opportunities abound for IVD firms in a world where infectious diseases and bioterrorism agents are just a plane flight, mail drop, cargo dock, or car ride away. Market applications include tests for biodefense, avian flu, West Nile virus, food, animals and pets, water quality, and genetically modified food. Testing formats include ELISA, rapid lateral-flow technology, and real-time polymerase chain reaction (PCR).
Market Analysis
In a report on the IVD market, Kalorama Information (New York City) provided an in-depth look at three of these nonclinical market segments. Among the highlights are the following:
• Environmental and biowarfare. The report noted that new technologies have emerged since the 9/11 attacks to improve the detection, prevention, and surveillance of bioterrorist attacks. These technologies include rapid tests for smallpox, anthrax, and salmonella, as well as improved vaccines and information-awareness networks to expedite tracking the symptoms of chemical and biological events.
• Food microbiology. In 2003, the global market for food microbiology tests was an estimated $864 million with an annual 9% growth rate. A worldwide emphasis on production of safer foods has sparked a sharp increase in the number of tests performed, according to Kalorama. In 1999, users ran 440 million tests. The 2003 report estimated that by 2005, the numbers of tests run would reach 625 million, a 7% annual increase. Listeria monocytogenes, Escherichia coli, and Vibrio parahaemolyticus are among the microorganisms that can cause food-related illnesses.
• Veterinary medicine. Global concern about the spread of bovine spongiform encephalopathy (BSE), or mad cow disease, has increased the market for BSE test kits, the research firm says. In 2003, the market in Europe and Japan for postmortem kits stood at approximately $140 million. Kalorama forecasts the market will double between 2007 and 2009. More than 1500 cases were detected in Europe in 2002. Canada, which exports more than 70% of its beef to the United States, performed BSE tests on approximately 900 of 11 million cows in 2003. The United States tested 19,900 of 96 million cows in the same year. In March 2004, the U.S. Department of Agriculture (USDA) said it plans to expand its BSE surveillance program with rapid-test kits from Bio-Rad Laboratories (Hercules, CA), Idexx Laboratories (Westbrook, ME), and other IVD manufacturers.
Given the state of the world these days, the environmental and biowarfare sphere presents a world of business opportunities. In its report, Kalorama cited the U.S. Project BioShield program, a $5.6 billion program featuring expedited approvals and government procurement. The goal of the 10-year program is to create “a medical arsenal to combat bioterrorism.” The United States spent $890 million in 2004 and authorized an outlay of $2.5 billion in 2005 for products such as vaccines, therapeutics, and testing devices.
Since the 9/11 attacks, demand has increased for tests that can detect anthrax, botulism, malaria, ebola virus, ricin, and other bioterrorist agents, Kalorama noted. However, few tests are available for these pathogens. The critical need for new tests has spurred “research for highly sensitive, field-type techniques for pathogens that are likely to spill over into clinical testing in microbiology and virology.”
In addition, no rapid assays to test individuals for infection by biowarfare agents or other similar pathogens are on the market, Kalorama said in the 2004 report. Many IVD companies have been working with various U.S. federal agencies to develop rapid-response diagnostics and environmental sensors in order to detect biological or chemical agents at very low concentrations. However, the research firm said that such tests or devices have not reached the market, and no such products are expected to be commercially available before 2009.
IVD companies working with U.S. government agencies to develop rapid tests for biowarfare agents include Invitrogen (Carlsbad, CA) and MicroFluidic Systems (Pleasanton, CA). The former company launched Biological Defense Systems (BDS) in July 2004 to further explore biosecurity applications based on the company’s pathogen research, according to Kalorama. MicroFluidic Systems received a $4.5 million contract from the Advanced Research Projects Agency at the U.S. Department of Homeland Security (DHS) to develop an automated system for identifying airborne bacteria, viruses, and toxins.
Kalorama said the market for biowarfare-based molecular tests, which reached approximately $31 million in 2003, will grow 2% annually and reach $34 million in 2008. The tests are being used by the U.S. government at post offices and federal buildings to detect anthrax.
Preparing for Bioterrorism
Although no rapid assays exist for biowarfare agents, other such tests to detect anthrax, ricin, and other bacteria have been developed by a number of IVD companies. Cepheid (Sunnyvale, CA) is the main supplier of tests for the U.S. post offices. Genelex (Seattle), Ocean Optics (Dunedin, FL), and Response Biomedical (Vancouver, BC, Canada) also offer rapid tests.
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The Ramp biodetection field testing system by Response Biomedical Corp. (Vancouver, BC, Canada).
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Increased demand for its point-of-care Ramp system, test cartridges for West Nile virus, and on-site detection of anthrax, smallpox, ricin, and botulism toxin has bumped Response Biomedical’s revenues to $1.4 million in 2003, according to Kalorama’s 2004 market report. Response sold more than 125 Ramp systems in 2003. More than 70 of the biological field detection kits have been sold to the U.S. Marine Corps, South Korea, the University of California at Los Angeles, the New Jersey state government, and the city of Philadelphia, as well as other public health and first-responder agencies throughout the United States.
Response Biomedical says the handheld system is 100% reliable at detecting anthrax at the 4000-spore level with no false positives. Results are available in 15 minutes instead of the two days it takes to receive results from culture-based tests, according to the company.
Joanne Stephenson, vice president of business development at Response, says it is difficult to track the growth of nonclinical diagnostic tests because “it’s such a segmented industry,” and point-of-care and rapid field tests tend to get lumped in with their laboratory- and hospital-based counterparts.
Although market numbers may be hard to differentiate, the market for nonclinical testing products is definitely growing because of recent governmental regulations, Stephenson says. “I know from a biosensing point of view, there are now specific mandates in different areas that different organizations and facilities need to be prepared to respond…to a biological attack and to diagnose it and have some sort of plan in place for decontamination. That’s where we’re seeing a lot of the growth.”
These mandated plans apply to entities such as universities and hospitals in the United States, she says, adding that the new rules have come into effect only within the last two years.
Response’s customers are looking at its testing kits “from a productivity point of view,” Stephenson points out. Large organizations with big mailrooms, for example, “have a lot of potential for white-powder incidents.” If they rely on the local hazardous materials team, they can lose at least half a day of productivity following an incident. By setting up an in-house response team, a business can maintain productivity following a negative reading, she asserts.
One of the key differences between clinical and nonclinical diagnostics is the uncontrolled nature of the environment for nonclinical tests, Stephenson says. In fact, both the environment and training are uncontrolled. There is no consistent competency training and generally no regulatory requirements, or very low regulatory requirements, she notes.
Regarding the Canadian supplier’s success with public first responders, Stephenson notes that once a rapid on-site testing system becomes accepted in the world of hazmat teams and fire departments, it becomes an entrenched part of the equipment base.
“You’re looking at a 20-year life span for anything they institute when they start taking on new pieces of equipment or new actions,” she says. “They’re responsible for preparing for the long term. They’re continuing to train. In that world, there’s no fly-by-night. Nothing comes and goes in two or three years. Once it’s been accepted, it’s in their psyche from a business standpoint.”
Meeting User Skill Sets
David Persing, MD, PhD, executive vice president and chief medical and technology officer at Cepheid, knows firsthand the benefits of business acceptance on a grand scale. Cepheid is the main supplier of molecular surveillance test cartridges to the U.S. Postal Service. Its GeneXpert system uses real-time PCR to analyze crude samples in minutes. The tool integrates sample preparation, DNA amplification, and detection, and can draw results from a raw sample in 30 minutes or less in the field, according to the company.
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A lab technician using the GeneXpert system by Cepheid (Sunnyvale, CA).
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The GeneXpert uses 13-chamber cartridges for sample preparation, combined with amplification and detection in an automated instrument with a rapid nucleic acid analysis capability, the company says. Skilled technicians using current manual techniques over the same set of analytical procedures require from six hours to three days to accomplish the same task.
The system forms the detection engine of the biohazard detection system which was developed in collaboration with Northrup Grumman and Applied Biosystems. This system is used in post offices across the United States for anthrax testing in mail-sorting facilities. “According to U.S. Postal Service reports, the system has used over 2.1 million GeneXpert cartridges in screening more than 25 billion pieces of mail being sorted at about 275 different centers,” Persing says.
He believes the GeneXpert system is a good example of a test module design for nonclinical diagnostics. “It’s a model for how to implement the various sophisticated technologies in an environment that’s challenging,” Persing says. “In the industrial setting, you don’t have access to highly trained and skilled personnel on a 24/7 basis. You have to use the skill set that’s already there. The challenge is designing the test to meet the skill set of the people you’re trying to market to. The most remarkable statistic is that despite these challenges, we’ve never had a false positive. Given the reputation of PCR as contamination-prone, the GeneXpert demonstrates that integration of sample prep and detection within a closed system can overcome technical problems on multiple fronts.”
The biothreat system is also installed at Northrup Grumman facilities and in offices at the U.S. State Department, Persing notes. In February, Cepheid announced that the state regional hazmat response team in Oakland County, MI, and the city and county of Honolulu’s bioweapon illness prevention program and EMS medical strike team chose the GeneXpert system for mobile anthrax detection.
The new customers are “a testament to that fact that we appear to have done exactly as I said, which is to meet the skill set that’s on the ground,” Persing notes, adding, “the trick is to always maintain the expected level of sensitivity and specificity that folks have come to expect.”
Looking for a Smoke Detector
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Dosing test strips for evaluation in the Guardian reader system by Alexeter Technologies LLC (Wheeling, IL).
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For Alexeter Technologies (Wheeling, IL), postal-related events in 2001 after 9/11 proved a boon for business, says James Whelan, president and general manager. “We had the big event, which was the anthrax letter attacks in 2001. That was where we saw our really big spike in sales and in moving the equipment. Subsequent to that, it’s been a nice steady rise to get new customers, but it’s been nowhere near that rate.” Today, Alexeter has installed more than 1200 systems to detect anthrax, ricin, botulism, tularemia, brucella, and other bacteria and toxins in sites around the world.
Whelan says sales rose “probably 20-fold in the course of the four months after the anthrax attacks.” Customers are primarily hazmat responders, first responders, and “some private-industry customers.” While sales gradually decreased within a year, he points out that even though customers have the company’s tabletop optical Guardian Reader or the Defender handheld reader, they still incur costs in maintaining the BioThreat Alert test strips. The strips are made by Tetracore (Gaithersburg, MD), a reagent developer signed to an exclusive partnership with Alexeter.
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The Defender TSR by Alexeter Technologies LLC is a handheld biological detection-and-identification device that uses an optical reflectance algorithm.
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“We built the optical reader that goes with the strips,” Whelan says, or as he puts it, “we make the razors, they make the razor blades.” The lateral-flow assay strips usually last 18 months or sometimes a bit longer. They are specified to any number of agents, he says, and work “just like a pregnancy test strip in the clinical market.”
Whelan says the trend and the dollars on the biowarfare side of nonclinical diagnostics has been moving toward faster operations and fewer consumables. The beau ideal in that regard is the radiation or smoke detector, he says. “This is what the world wants. They want a test that doesn’t use a consumable and that doesn’t need an operator or constant maintenance and can just sniff the air. They want the magic bullet.”
The industry has a saying, relates Whelan: “Everyone wants the smoke detector. But it doesn’t exist. Our customers get called in because there’s a pile of white powder that’s fallen out of an envelope. The big investment money is aimed at ways of monitoring either a single point, a high-visibility security installation, or a national museum with something on the roof that just tells you a biological attack has occurred.”
Ultimately, Whelan believes, these technologies “are going to come from the clinical diagnostics arena,” and he looks askance at the federal government’s role in developing such breakthroughs. “I look to the clinical chemistry arena for advances in this field, and I don’t see them. That’s what always gives me pause when I hear about the next best government invention.” If someone were to invent an innovative diagnostic test “that was low maintenance and gave highly specific results, we’d see it,” he maintains.
Regarding the case of that unfortunate drummer in New York, Whelan points out that “as squirrelly as that sounds, we are surrounded by naturally occurring biological threats.” The industry will need to become more adept, he says, at “human testing challenges for esoteric media or matrices. We’re going to have to get better at testing odd things.” He notes that every year a new biological threat appears that isn’t related to biowarfare. “We went from severe acute respiratory syndrome (SARS) to the West Nile virus. This year, it’s bird flu.”
Sturdiness Required
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The Veratox test kit by Neogen Corp. (Lansing, MI), which is used for determining aflatoxin levels in grain.
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Neogen (Lansing, MI), which had revenues of $63 million in its last fiscal year, has a diverse portfolio of primary products for detecting a range of food and animal bacteria and allergens. The company’s food safety division sells dehydrated culture media and diagnostic test kits for foodborne bacteria, natural toxins, allergens, genetic modifications, drug residues, plant diseases, and sanitation problems, according to the company. Its animal safety division markets diagnostics, veterinary instruments, veterinary pharmaceuticals, and related products.
Ed Bradley, Neogen’s vice president of sales and marketing, food safety, says the main difference in nonclinical diagnostics for its wide-ranging product line is the hardiness required. “Ruggedness is an important part of our design specifications,” he notes. “It has to be rugged both from an environmental standpoint because tests are not always used in a controlled setting, but also from a user standpoint so that users who don’t have the training of clinical lab technicians can use them and still get accurate results.”
Neogen’s most recent success has involved allergen testing kits, a relatively new market that the company jumped into early enough to capture a strong leadership position in the United States, Canada, and western Europe. The company also has a presence in the major countries with agricultural food markets, such as Japan, Australia, Brazil, Argentina, South Korea, and Thailand.
Recent U.S. regulations are fueling the strong sales of Neogen’s allergen test kits, Bradley says. The FDA regulations, which went into effect in January 2006, require food companies “to clearly state if food products contain any ingredients that contain protein derived from the eight major allergenic foods.” The identifying label must be written in language that can be understood and recognized by the average consumer, he says.
Government Involvement
The role of regulatory and federal watchdog bodies such as FDA, USDA, the Association of Analytical Chemists (AOAC), and the Centers for Disease Control and Prevention (CDC; Atlanta) in guiding developments of nonclinical diagnostics is slight and in some cases vexing to some of these companies.
FDA has no regulatory say in the nonclinical side of the business, Whelan points out. “None. There is no official government regulatory agency for testing in the environment. This is environmental testing, and it falls between the cracks, not to say that there’s not a lot of interest on the federal side.” The CDC has some interest, he says, because the center runs a lab response network, “which 160-odd state and local labs tie in to if there’s a biological event.”
DHS is the federal agency that is supposed to develop equipment standards, an effort that has been ongoing since 2002, according to Whelan. “They’ve made some progress in coming up with laboratory-based screening tests, but nothing for field-based screening tests, which of course is a little disappointing for us as taxpayers.” A recent research proposal released by DHS calls for the development of a field assays pilot program with the CDC by 2008, he says.
Bradley also downplays the effect that organizations such as the CDC have on the industry. “Are they driving or having any real impact on the development of this industry? I don’t think so. I think it’s driven much more by the food companies protecting their brand and avoiding recalls, avoiding bad publicity, and avoiding any injury to their customers.”
AOAC describes itself as “a 120-year-old not-for-profit scientific association committed to worldwide confidence in analytical results.” The association is an independent, third-party approval body that’s “funded by people like us,” Bradley says. It also receives some FDA funds for approval of certain test methods. However, the organization has no enforcement powers, and diagnostic test providers are not obliged to participate, he points out, unless “the customer tells you to.”
After the 9/11 attacks and the anthrax mail scare, the Food Emergency Response Network (FERN) was created in 2004 by USDA’s Food Safety and Inspection Service in cooperation with FDA. FERN has been trying to establish a network of U.S. testing laboratories on the local, state, and federal levels.
The AOAC did advise FDA during an evaluation process for anthrax, notes Stephenson. One of the puzzling aspects of AOAC requirements is the amount of time needed to complete them, she says. “There is 10 times as much testing than an FDA clearance for a clinical test. We still haven’t figured that out.” The cost of running the tests for anthrax “just makes for a different market dynamic,” she points out, noting that Response had to run 300 tests for a troponin heart attack trial and 2600 for an anthrax trial in order to get AOAC approval.
The two markets also diverge in terms of price pressures put on manufacturers by customers, Stephenson says. “In the clinical world, if you come up with something better or more accurate, they pay more for it. In the nonclinical world, if you come up with something better, you pay a competitive rate. It’s much more of a commoditized market. There’s a very limited premium on brand. In the clinical world, you would pay more for the brand. If you came from a well-respected company, the test could command a slightly higher premium. That makes no difference in the nonclinical market.”
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John Conroy is a freelancer writer in Los Angeles.
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Conclusion
Asked whether he sees a bright future for nonclinical diagnostics, Persing is upbeat and quick to reply. “Absolutely, extremely promising. The decentralized model is gaining a lot of support, mainly because it shaves time-to-results in a dramatic way. It doesn’t depend on batch-mode processing. It’s sort of like what one of our analysts said: It’s like comparing a mainframe computer to an IBM PC, or to Apple Macintoshes. You’re not waiting for transport to a central facility, and you’re not subject to bottlenecks on the processing side.”
