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Big business from tiny molecules

Cliff Henke

If, as Richard Klausner of the National Cancer Institute says, molecular diagnostics is "nothing short of revolutionary," then the revolution is taking over the established order at an amazing pace. Virtually every month new technologies are being invented in this field, and new companies or alliances of companies are being created to bring these ideas to market. In the near future, all of these efforts will mean big rewards for these companies and their key employees and investors.

This article offers a few illustrations of this activity over the past few months, and discusses the regulatory and business climate for this fast-burgeoning field. First, however, let's briefly review the economic and clinical forces driving the revolution, and how they've increased their momentum in recent months.

The Clinical Promise of Molecular Genetics

Molecular diagnostic products range from genetic probes used in "home brew" kits developed by research and clinical laboratories, to the so-called DNA "lab-on-a-chip". Together, these technologies offer great promise to dramatically improve diagnosis and treatment of even some of the most vexing diseases. In addition, molecular diagnostic techniques enable or greatly improve genetic tests that can be performed on presymptomatic fetuses, newborn babies, or even adults, enabling clinicians to detect genetic anomalies before clinical signs appear, and in some cases allowing effective prevention.

By developing new tools that work at the very roots of various pathologies, molecular diagnostics open the way for genuine prognostic medicine. Clinicians will be able to evaluate individuals' genetic susceptibility to cancer and other diseases, intervene so as to prevent disease, and predict the effectiveness of therapies more precisely than ever before. Even in the short term, the use of nucleic acid probes will soon permit far earlier diagnosis, with major benefits for healthcare delivery such as rapid intervention in emergency situations, or reduced treatment and length of hospital stays. The attendant potential of molecular genetics to reduce healthcare costs is equally dramatic.

Moreover, by eliminating such preanalytical steps as culturing, genetic probes provide results within a few hours instead of the days required for traditional diagnostic tests. In the case of tuberculosis, for example, the bacillus pathogen can be detected directly in the patient sample with great sensitivity, allowing for immediate treatment with a targeted antibiotic. In this fashion, molecular diagnostics can help combat antibiotic resistance, a major problem throughout the world.

Perhaps the most visible and potentially lucrative applications of molecular genetics development are in cancer diagnosis and treatment. For example, p53 has been identified as a tumor suppressor gene. Inactivation or mutation of p53 leads to replication of damaged DNA, thus promoting the development of malignant cell clones. Overexpression of mutant p53 can be detected by immunohistochemistry. Gene sequencing can be used to determine what kind of mutation is present.

Molecular Diagnostics International (MDI; Hertfordshire, UK) is one of many companies developing technology to detect DNA alterations that could serve as clinically useful markers of early-stage breast cancer. MDI's p53 test will also enable further separation of patients into higher- and lower-risk groups. MDI's research and development is also aimed at discovering other molecular markers.

MDI's researchers claim their test will make possible a more refined selection of early-stage breast cancer patients for chemotherapy. Only a very small proportion of women (1–2%) over the age of 50 benefit from this form of treatment. Markers can identify women with an extremely good prognosis (close to 100% survival after 10 years), enabling others to confidently choose not to undergo the psychological trauma, toxicity, and expense of chemotherapy.

There are other such genetic markers under investigation, for which tests are being developed rapidly. These include the c-erbB-2 oncogene, also known as HER-2/neu, whose overexpression is associated with ovarian cancer.

Business Develops Rapidly

Because the economic and clinical stakes are so high, the pace of business and technological activity has been remarkable. Below are a few examples of such developments in just the past several months.

In July, Promega (Madison, WI) announced a new amplification-based system for the detection of deletions in the Y chromosome. The Y Chromosome Deletion Detection System gives clinical researchers a standardized screening panel amplifying only informative nonpolymorphic sequence tag sites (STS) on the q arm of the Y chromosome. The system amplifies key functional regions associated with the azoospermia factor. Studies indicate that deletions in the Y chromosome can be linked to male factor infertility. Company officials emphasize that the panel is currently available for research use only. However, use in diagnostic procedures is envisioned within the next decade.

In September, Vysis Inc. (Downers Grove, IL) announced the results of an independent clinical study that reports the value and utility of the company's rapid AneuVysion assay for detecting in utero fetal genetic abnormalities. Published in Fetal Diagnosis and Therapy, the study was conducted on 3280 high-risk patients in Germany. Results were 100% accurate, producing no false-positive or false-negative results, and providing the same findings as standard karyotyping but on average more than 10 days earlier. Standard fetal karyotyping takes up to three weeks to complete, because fetal cells must be cultured and then analyzed. In 1999 it is estimated that more than 600,000 amniocentesis procedures will be performed in the United States and Europe for fetal karyotyping.

"Our comprehensive study showed that the more-rapid fluorescence in situ hybridization (FISH) results were in complete agreement for all analyzable disorders with standard cytogenetics, a time-consuming procedure leading to a distressful wait," explains Bernd Eiben, the study's lead author.

"Dr. Eiben's study provides conclusive evidence of the value and reliability of FISH for the management of high-risk pregnancies. It is especially valuable where rapid decisions are necessary for obstetrical management," adds Joe Leigh Simpson, MD, chairman and professor of obstetrics and gynecology at Baylor College of Medicine (Houston).

As the Vysis study suggests, the business case for many molecular diagnostics companies and their products is supported by the value of the faster test results inherent with genetic testing. "Time, accuracy, and convenience are the three marketplace issues that will give genotyping the leg up in the long run," says Daniel H. Farkas, director of clinical diagnostics at Clinical Micro Sensors Inc. (Pasadena, CA).

While the economic lure is great, technological advances and public-sector research support have also contributed to the field's rapid business development. There is no better illustration of how these three factors have produced almost unbelievable breakthroughs so quickly than the Human Genome Project (HGP). "The idea that I could be standing in front of you now and claiming we'll have 90% of the human genome sequenced within 12 months would have appeared ridiculous only two or three years ago," said Francis Collins, director of the National Human Genome Research Institute (NHGRI; Bethesda, MD), at a San Francisco press briefing in June. The human genome, Collins continued, should be fully and accurately sequenced by 2002 instead of 2005 as originally planned, with 90% of it available in a public database by the middle of 2000.

While the HGP has benefited from these forces, the growth of business and technology has also proceeded faster as a result of the research support given by the HGP. Last summer Vysis announced a cooperative research and development agreement (CRADA) with the NHGRI the Institute of Pathology at the University of Basel (Basel, Switzerland). The research agreement is the basis of a two-year study combining Vysis's GenoSensor and FISH systems, and NHGRI's tissue microarrays to define amplifications of specific genes in various cancers and then to determine the potential clinical significance of these amplifications (see Figure 1). As a part of the agreement, Vysis has an option to negotiate a license with the National Institutes of Health or the University of Basel for inventions that arise from the CRADA research. Such deals are typical of the collaborations formed via federal programs.

Figure 1. Vysis's GenoSensor System offers a complete approach to genomic research including genomic arrays, instrumentation, and reagents. It allows assessment of multiple genomic targets. Photo courtesy Vysis Inc. (Downers Grove, IL).

Vysis also announced that it has formed another collaboration with Eos Biotechnology Inc. (South San Francisco, CA) to validate new genomics technology–derived breast cancer markers. To identify novel genes, Eos employs multiple genomics technologies, including a proprietary differential display technology, DNAZ chips by Affymetrix (Santa Clara, CA), and a flexible medium-density gene expression monitoring platform marketed by Eos (see Figure 3). Data acquired from these technologies are integrated in a novel bioinformatics architecture and queried with Eos's gene expression analysis software.

Vysis's role will be to validate the panel of cancer-specific genes through the use of its patented FISH technology, which allows the visual detection of genetic abnormalities of a particular gene within the tumor cell nucleus. The clinical importance of these abnormalities will be established through Vysis's and Eos's clinical collaborators. Vysis will receive worldwide diagnostic rights to the Eos targets, while all therapeutic rights will be retained by Eos.

Meanwhile, Third Wave Technologies Inc. (Madison, WI) and Stanford University (Palo Alto, CA) have entered into an agreement for large-scale development and use of Third Wave's non-PCR-based genetic probe technology (called the Invader assay) in genomic research and clinical applications (see Figure 2). The agreement provides Stanford broad access to Third Wave's technology for emerging pharmacogenomic applications. This includes research access to Third Wave's offerings for single-nucleotide polymorphisms (SNPs), genotyping, and gene expression analyses. Third Wave will receive certain rights to all discoveries made using the Invader technology, including improvements and exclusive diagnostic rights.

Figure 2. Operation of the Invader assay by Third Wave Technologies (Madison, WI); (a) a correct DNA structure forms and is recognized by the company's proprietary Cleavase enzyme; (b) the product of the successful target-specific reaction leads to cleavage of the generic FRET probe and generation of a fluorescent signal; (c) if an incorrect DNA structure forms, the Cleavase enzyme will not recognize the structure, so no reaction takes place and no signal is generated.

"Third Wave has a platform technology that I believe will become a standard for the detection of SNPs and genetic mutations," says Stanford's David Cox, professor of genetics, codirector of the Stanford Human Genome Center, and Stanford's representative in the SNP Consortium. "Our plan is to automate both Invader assay development and the technology's use in disease-association studies, where specific gene aberrations are compared to actual occurrences of disease, and accelerate the movement of these discoveries into routine clinical practice."

Third Wave has also announced an agreement to provide Warner-Lambert (Morris Plains, NJ) with a portfolio of its assays for evaluation in genotyping and gene expression applications. The Parke-Davis pharmaceutical research division of Warner-Lambert will be the first to implement Third Wave's Invader technology across several areas of drug discovery and development. Under the agreement, Third Wave will own any improvements to the Invader technology made during the collaboration and will receive exclusive access to discoveries made using its assays for diagnostic applications. Third Wave also has contracts with other major pharmaceutical companies to use Invader technology for large-scale pharmacogenomics studies and emerging therapeutic selection applications, as well as collaborations with other genome research institutes, including the Sanger Centre (Hinxton Hall, UK) and Cambridge University (Cambridge, UK).

"Drug development in the future will be tailored to the genetic profiles of patients and will require technologies such as the Invader assay to inexpensively and accurately detect SNPs and expression profiles," says Lance Fors, PhD, Third Wave's president and CEO. For the SNP payoffs to be realized, however, the costs of finding them have to drop dramatically.

Figure 3. This DNA microarray by Eos Biotechnology (South San Francisco, CA) is a microscope slide arrayed with oligonucleotides representing many different human gene sequences. Fluorescently labeled RNA from a human tumor binds to oligonucleotides on the array that correspond to particular genes, and a false color image indicates the extent of the activity of that gene in the human tumor. This method has enabled researchers to generate a database of tumor-associated and tumor-specific genes, which has also been evaluated for potential prognostic, diagnostic, and therapeutic molecular targets related to various cancers.

The basic research and commercial development activity is already rapidly shifting to identifying SNPs, Fors and others say. The reason is that SNPs account for the vast majority of genetic differences among humans, and thus could exponentially increase insights into the genetic underpinnings of disease pathology.

This research will be aided greatly by formation of the SNP Consortium, led by 10 large pharmaceutical houses, the Wellcome Trust, and various research institutes. The consortium has committed $45 million to completing an SNP genomic map within two years of its April 1999 launch date, and making the map available to everyone for no more than a nominal processing charge. In addition, NHGRI has programmed $30 million to identify at least 100,000 SNPs and then also release them into the public domain.

A variety of efforts in other countries are also involved in this research. Italy's molecular probe database, for example, contains information on about 4300 synthetic oligonucleotides with a sequence of up to 100 nucleotides. Data are taken mainly from professional literature and encoded on the basis of controlled searchable vocabularies. The effort is compiled by the telematics applications in biotechnology group at Italy's National Institute for Cancer Research (Genoa, Italy).

Patent Issues Loom

The furious activity in the molecular field has created an intense rivalry among both public and private firms, and has raised thorny legal issues throughout the world. The reason is that many companies have for several years now spent large sums of their own and investors' money in efforts to identify and patent clinically relevant SNPs, either for their own drug discovery use or for licensing to others. For example, CuraGen Corp. (New Haven, CT) announced it had accumulated an inventory of 120,000 SNPs located on protein-coding regions of the genome. DeCode Genetics Inc. (Reykjavik, Iceland) also has such a database in development, as do Celera Genomics (Rockville, MD) and Millennium Predictive Medicine Inc. (Cambridge, MA).

The intent of the SNP consortium and the U.S. government, however, is to see that "everybody will be able to do this sort of work without being held hostage to commercial databases," says consortium CEO Arthur Holden. The plan is for the data to be released as they are compiled.

The impact of gene patents on public sector genetic testing is apparent in the interpretation of license rights by Myriad Genetics (Salt Lake City). Myriad will restrict licensing to use its familial breast cancer predisposition gene sequences (BRCA1 and BRCA2) in order to concentrate key tests in the United States. The charge for a complete analysis of both genes is $2400. There are no immediate plans to license European research centers for the full range of tests.

In September, meanwhile, Gen-Probe, Vysis, and BP Amoco Corp. (Chicago) settled litigation that began among the firms in 1995. The settlement resolves patent infringement issues contested by the parties relating to U.S. patents owned by each party. Issues of alleged malicious prosecution were also resolved. The settlement resulted from a compromise of disputed issues and none of the parties admitted any wrongdoing.

In partial consideration for resolution of the litigation, the parties granted one another various immunities from suit under contested patents and cross-licensed other patented technologies. Vysis granted limited licenses to Gen-Probe under U.S. patents for detecting ribosomal nucleic acids and infectious disease diagnostics by nucleic acids. The key patent is exclusively licensed by Vysis from the regents of the University of California (Berkeley, CA). Vysis also granted Gen-Probe a limited immunity from suit, and agreed to grant options to certain of its other probe-related patents. For its part, Gen-Probe granted Vysis a limited immunity from suit for Vysis's food business under Gen-Probe's U.S. patents.

Conclusion

Of all the challenges to finding and mapping SNPs, the biggest include dealing with the relative slowness and inaccuracy of current genomic techniques, and managing the huge amounts of data generated by these efforts (a problem that is an order of magnitude greater than the HGP's task, because of the greater number of SNPs). To illustrate, most current technologies rely on PCR-based amplification of DNA samples, which is cumbersome (requiring complex thermal cycling), slow, and expensive. It will remain so for at least a few years, until expiration of the patent on the polymerase enzyme, held by F. Hoffmann–LaRoche Ltd. (Basel, Switzerland).

Observers say that so-called DNA chips (microarrays on wafer-sized glass, plastic, or silicon plates) will find a ripe market as the array density requirements of SNP research efforts grow. The more SNPs examined, the more powerful the chip-based strategy is. "I expect the combination of tissue microarray technology with genomic technologies will now substantially facilitate our ability to identify the clinically most relevant genetic alterations," says Olli-P. Kallioniemi, an investigator in the NHGRI cancer genetics branch.

Because sample sizes of SNPs are often very small, a more important factor may be the accuracy limitations inherent in PCR, whose accuracy diminishes with each amplification. This is why so much interest has been shown in non-PCR-based technologies such as Third Wave's. However, if molecular technologies continue to be developed at their current pace—with attendant price reductions as the learning curve is surmounted—the SNP hunt will turn out to be just as rapid as the progress of the HGP. And with its completion, the promised economic and clinical benefits will begin to materialize.

Bibliography

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Leake, R, and O Owens."The Prognostic Value of Steroid Receptors, Growth Factors, and Growth Factor Receptors in Ovarian Cancer," in CF Sharp, WP Mason, and R Leake, Ovarian Cancer: Biologic and Therapeutic Challenges. London: Chapman and Hall, 1990.

Scambia, G, et al."Expression of ras Oncogene p21 Protein in Normal and Neoplastic Ovarian Tissues: Correlation with Histopathological Features and Receptors for Estrogen, Progesterone, and the Epidermal Growth Factor," American Journal of Obstetrics and Gynecology 168 (1993): 71–78.

Cliff Henke is a freelance writer based in Southern California.

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