EMERGING IVD COMPANIES
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Illustration by iStockphoto
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Being a small to medium-sized company has its advantages. Compared with large conglomerates, such companies have always had the advantage of being flexible and able to make changes rapidly. This flexibility allows these companies to take advantage of perceived market trends quickly and take certain risks accordingly.
In the IVD industry, emerging small to medium-sized companies are no exception, and many of them have demonstrated track records of success to prove it. Such innovative IVD companies have experienced high growth rates by introducing cutting-edge diagnostic technologies and taking alternative approaches to the IVD market.
The editors of IVD Technology asked the editorial advisory board and reader board members to identify small to medium-sized companies that have developed unique and innovative diagnostic technologies, demonstrated strong and impressive growth, and will likely continue to contribute positively to the IVD industry in the future. Among the many responses, the following four companies were the most frequently mentioned.
Cepheid: User-Friendly PCR
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Cepheid Location: Sunnyvale, CA |
When Tom Gutshall and Bill McMillan founded Cepheid (Sunnyvale, CA) in 1996, real-time polymerase chain reaction (PCR) and closed detection systems had already replaced more-laborious and contamination-prone open analytical techniques. However, a gap still needed to be bridged. “Tom and Bill recognized early on that a critical but often overlooked step in getting automated PCR systems to really work was the sample preparation part of the process,” says David H. Persing, MD, PhD, the company’s executive vice president and chief medical and technology officer.
The question was how to isolate material from raw clinical specimens such as milliliter volumes of sputum, whole blood, stool, and tissue; concentrate the targets of interest; obtain concentrated, purified nucleic acid; and transfer the target into a PCR reaction within a closed system. The answer was the GeneXpert.
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The GeneXpert 16-site system with laptop by Cepheid.
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The GeneXpert represents a “technological triumph,” according to Persing. Once the user inserts the specimen and adds liquid reagents, the cartridge handles sample concentration, elution, and real-time PCR detection invisibly. “Like with a plasma TV or an iPod, all of that incredibly sophisticated technology is invisible to the user,” Persing says. The cartridge allows the concentration and purification of genetic target material from large-volume specimens, which is critical to getting good sensitivity in many settings, he explains.
The GeneXpert cartridge-based technology has allowed Cepheid to break through a regulatory barrier to implementation of PCR technology. The company’s Group B strep test has received the first-ever moderate-complexity clinical laboratory improvement amendments (CLIA) rating for a PCR test. In clinical trials, in which the test was administered by nurses in labor and delivery units, it performed as well as when administered in clinical labs. The company intends to take its success a step further. “We actually have our sights on CLIA-waived testing,” says Persing, allowing Cepheid to supply approximately 100,000 U.S. labs capable of running CLIA-waived tests.
The Centers for Disease Contol and Prevention is supporting Cepheid in developing a CLIA-waived influenza test that would screen for both seasonal and avian influenza. The test is designed to be as simple to administer as a pregnancy test, and would bring the power and sophistication of high-complexity PCR tests to physician offices, urgent-care clinics, and at point-of-entry areas such as airports. The company expects to be in alpha studies in about six months, with a goal to have product rollout by the start of the 2008–2009 flu season.
Cepheid is also working on a program with support from the National Institute of Allergy and Infectious Diseases (NIAID), and the Bill and Melinda Gates Foundation to produce a rapid-results test for tuberculosis. “There has been a real emphasis on trying to improve speed of testing for tuberculosis,” says Persing, adding that rapid detection of drug-resistant strains of TB is becoming an increasing concern of hospitals and clinics around the globe. Another global product—the world’s first on-demand molecular test for methicillin-resistant Staphylococcus aureus bacterial infections—was launched in Europe late last year.
While infectious-disease applications represent Cepheid’s current focus, the company’s acquisition of Actigenics (Maurens-Scopont, France) in 2006 gives them access to the microRNA market, a new class of highly informative diagnostic markers. In the area of oncology, microRNA appears to allow tumor classification with a smaller number of markers than would be required with a full gene expression panel. “MicroRNAs are showing a lot of potential as being more reliable and more robust diagnostic markers in oncology,” Persing says. The company is currently focusing on breast, prostate, and lung cancers, and on inflammation applications such as sepsis, lupus, and rheumatoid arthritis. The technology is new and up-and-coming, with products likely beginning their development cycles in two to four years. “When we invest in this program,” says Persing, “we’re investing in the company’s future.”
Ciphergen Biosystems: A Shift toward the Future
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Ciphergen Biosystems Location: Fremont, CA |
For Ciphergen Biosystems (Fremont, CA), being poised for the future has meant a seismic shift in the company’s business focus. Founded in 1993, the company spent its first decade as an instrument maker, putting proteomics technology into the hands of researchers. But Ciphergen’s early leaders knew that once these researchers began discovering biomarkers, the business would change. “Diagnostics was part of the initial strategy created by the original founders,” says president and chief executive officer Gail Page.
So in 2004, about a year before Page assumed her current position, the company formalized a diagnostic effort and decided to place the instrument side of the business in the hands of Bio-Rad Laboratories (Hercules, CA). Having been involved in proteomics for 50 years, Bio-Rad was a natural to take over that part of the business. “We were confident that Bio-Rad would invest in the technology,” says Page, adding that the company will continue to supply chips for Ciphergen’s diagnostic work. “I think it has just been a natural evolution,” she says.
Since early 2000, Ciphergen has been doing research, developing a pipeline of potential diagnostic tests, and “laying the foundation for today’s diagnostic output,” according to Eric Fung, MD, PhD, director of clinical affairs. These efforts are focused in the areas of oncology and cardiology, and the company has established scientific collaborations with world-renowned experts in these disease states. Johns Hopkins University School of Medicine, the Anderson Cancer Center at the University of Texas, the University of Kentucky, and University College of London are among the company’s scientific partners. These collaborations have been instrumental in developing the tests that Ciphergen is poised to bring to the market.
The company’s ovarian cancer program, which began in 2002, is one example of Ciphergen’s approach. “There are a lot of unmet clinical and medical needs in the ovarian cancer space,” says Page, adding that this is a very emotional disease, and is highly treatable when detected early. There has long been an interest in developing a screening test for this silent killer, but no reliable marker has yet been found.
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Analysis of patient samples using the ProteinChip Array by Ciphergen Biosystems. |
Rather than taking on the challenge of discovering such a marker, and the even bigger challenge of validating it, Ciphergen chose a different route. “We established collaborations with thought leaders in the world of ovarian cancer,” says Fung. These leaders shifted the company’s focus toward addressing a more attainable clinical question that would still truly affect patient outcomes and make a difference in survival rates. The company began working early on with advocacy groups, to build their support for the program and gather their feedback.
The program’s goal became identifying markers that can more accurately determine whether an ovarian mass, once detected, is malignant, thus allowing the patient to be referred immediately to a gynecologic oncologist who can offer the most effective treatment. “When a pelvic mass is present, we can have an impact on the outcomes of women with ovarian cancer by indentifying those women with a cancerous tumor and sending them to the right surgeons,” Fung explains. By the end of 2006, the company had analyzed samples from more than 2500 women and identified a set of markers. They will be conducting clinical trials in 2007, and are now in the product development phase of the program.
With the transition from instrument company to diagnostics business complete, Ciphergen is poised for its product launch phase, with several tests in various areas of emphasis likely to enter clinical trials in 2007 and 2008. “We’re very close to commercialization,” Page says. “We feel like 2007 is going to be a banner year for us.” While Ciphergen no longer focuses on instrumentation, the company’s history in that area provides plenty of fuel for its efforts. “We have an unbelievable intellectual property war chest,” says Page. “I think the decisions we have made have positioned us for the future.”
Digene: Penetrating the HPV Market
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Digene Corp. Location: Gaithersburg, MD |
Digene Corp. (Gaithersburg, MD), the leader in the rapidly expanding human papillomavirus (HPV) screening market, is far from an overnight success. While the company went public in early 1996 and FDA approved its first test in 2000, the market did not really begin to take notice until the following year. In 2001, the American Society for Colposcopy and Cervical Pathology (ASCCP) recognized the clinical value of the Digene HPV test as a reflex for an aytypia squamous cells of undetermined significance (ASC-US) Pap test. “That was the first true validation of the utility of a high-risk HPV test as it relates to cervical cancer,” says Douglas White, senior vice president of sales and marketing, Americas and Asia Pacific.
This was followed in 2002 by an American Cancer Society recommendation that HPV tests be routine for women age 30 and older. The next year, FDA approved the utility of the Digene HPV test for primary adjunctive screening together with a Pap smear in women 30 years of age and older.
To get from idea to acceptance, the company worked with opinion leaders and advocacy organizations in the field, and was involved in numerous clinical trials and studies to provide supporting data. “If you look at the overwhelming majority of data that have been published to date, most of those studies were done using our technology and our kit,” White says. “We’ve had a lot of success over the last four years, but that is the result of an incredible amount of groundwork.”
FDA approval is just a first step. “That’s really just the ticket to the game,” White says. “That doesn’t mean that technicians change their practice overnight.” So for the past three years, the company has been busy educating the market about its test.
Digene has invested in dedicated sales, technical support, and customer service teams to work with clinical labs. They have been conducting 75–100 education programs to reach up to 8000 U.S. clinicians per year, with a dedicated sales and education force to inform clinicians about the test, the reimbursement situation, and patient counseling requirements. “There’s a significant change in the practice, so we’re working to help them prepare,” White says.
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The high-throughput Rapid Capture System by Digene Corp. enables labs to run Digene’s entire testing portfolio on a single platform. |
The company has worked hard on the reimbursement side as well. The Digene HPV test is widely reimbursed for ASC-US reflex testing by almost every insurance plan in the United States, and rapid progress has been made to gain broad coverage for primary adjunctive screening. “To date, more than 225 million lives are covered for primary adjunctive screening across insurance plans nationwide,” says White.
To reach the public, the company began a direct-to-consumer (DTC) advertising campaign in 2005, including a print ad placed in nine national magazines and a 30-second television ad that has run in more than 14 cities. The TV spot doubled market penetration in areas where it ran. “Digene’s DTC campaign is inspiring many more women to have conversations with their doctors or nurses about a critical public health concern,” White says. These efforts are paying off, but will need to continue for the foreseeable future. “We’re approaching 25% penetration of the market opportunity,” says White. “We still haven’t changed the entire market over.”
Meanwhile, the company is also in trials for a genotype test to determine the actual type of high-risk HPV infection present, and help clinicians determine how aggressively a patient’s treatment should proceed. White is also optimistic about a low-resource, low-cost test for use in developing nations that could be ready in the next two to three years. “We have the opportunity to eliminate death from cervical cancer,” White says, “and that’s really amazing when you think about it.”
Luminex: Maximizing Multiplexing
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Luminex Corp. Location: Austin, TX |
An expansion of its focus, rather than a shift, has poised Luminex Corp. (Austin, TX) to grow and continue its success. The scientists who founded the company in 1995 created xMap, the first technology to enable multiplexing, and their initial business plan was to license the technology to other companies that would develop applications. Luminex went public in 2000, and by 2002, it became apparent that a focus on business, as well as on science, was needed. The company began to restructure, and chose Patrick Balthrop as president and chief executive officer in 2004.
Balthrop created a multipronged plan for the company’s growth that pushed past its original business model. The first element was to penetrate key market segments in which the company could focus and succeed long-term. Luminex began building relationships with market leaders in the fields of life sciences research, clinical diagnostics, and biodefense, and developing and marketing products using xMap technology tailored to those market segments.
A second element of the plan was the creation of Luminex Bioscience Group, which is dedicated to developing specific assay content tailored to the needs of the company’s established partners. Companies such as Bio-Rad, which had already placed many Luminex instruments and developed several assays on their own, welcomed the idea of applying Luminex resources to develop additional assays they could market.
A third element is the recent acquisition of Tm Bioscience (Toronto), the first company to receive FDA clearance for a multiplexed genetic test, for cystic fibrosis (CF). In addition, the company has tests for coagulation problems, a Jewish heritage panel, and a 20-plex respiratory viral marker test in the pipeline that will test for avian influenza and SARS. They anticipate FDA clearance for that test during the first quarter of 2007. The acquisition will “position Luminex to aggressively penetrate the molecular diagnostics market,” Balthrop says. “When the Tm Bioscience deal closes, we believe that we will have the three legs of the stool established.”
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The Luminex 200 by Luminex Corp. is designed to meet the multiplex testing needs of clinical and research laboratory professionals. |
That stool, it appears, will be supporting considerable growth in coming years. “The need for multiplexing has been growing substantially,” Balthrop says. The output of the Human Genome Project is driving an ever-increasing demand for molecular diagnostics. As that market expands from single-marker tests such as HIV viral load, and begins to include screening tests for diseases such as CF, which require testing for 40 different genetic markers, the time and cost benefits associated with multiplexing will become more important. When patient samples come in, laboratories will have a decision to make, Balthrop explains. They can use a legacy method and test for one mutation at a time, or they can use multiplex technology and test for all 40 at once.
Balthrop believes the choice is clear, and labs are adopting xMap at four to five times the market growth rate. “They have real-world problems to solve,” he says. xMap technology offers end-users the ability to streamline their operations and take labor costs out of the system, while delivering performance that is at or above the level of legacy methods. Because in the end, results are what matter. “They want the best answer they can get,” Balthrop explains.
Another area of opportunity is in pharmacogenomics. Insurance companies, Balthrop believes, will find it much more cost-effective to test a patient for genetic markers to determine whether an expensive drug will benefit, than to pay for a course of that drug that might not help. “The impact on overall healthcare and economics, we believe, is a compelling message,” he says, adding that data support the fact that multiplexed tests will be required to handle such applications. Luminex is poised and ready. “We have 4000 instruments in place,” Balthrop says, “ready to take on those testing methods when they develop.”
