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20/20 GeneSystems Accelerator Program Allows International Dx Companies to Build US Business


NEW YORK – For many diagnostic companies outside of the US, setting up a laboratory facility and headquarters in America can be expensive and time-consuming — but a new accelerator program intends to help them bypass the burden.

The Clinical Lab Innovation Axcelerator, or CLIAx, from 20/20 GeneSystems — announced on Tuesday at the American Association for Clinical Chemistry's Annual Scientific Meeting — aims to help ex-US firms set up shop to launch their tests in the US.

It offers communal clinical laboratory space, testing equipment, and marketing and sales guidance for diagnostic firms looking to commercialize tests in the US.

When 20/20, a biotech company with a focus on cancer detection and COVID-19 testing, began building out a new facility in Rockville, Maryland, Ron Baker, the company's sales director, said it decided to allocate some of the space for the accelerator program.

Meant for companies in early formative stages who plan to market their laboratory-developed tests in the US, the lab and its associated resources provide an opportunity for those firms to perform necessary validation studies and prepare to commercialize their tests, Baker said.

These companies won't have to worry about finding a laboratory space to lease, purchasing the necessary equipment, or hiring staff — through CLIAx, all of that will be provided.

The firm has nearly 3,000 square feet of communal lab and office space, enough to fit up to three companies, all manner of laboratory equipment — including Roche and Applied Biosystems PCR, next-generation sequencing, immunoassay, and clinical chemistry instruments — and marketing and sales teams to help promote new tests, Baker said.

"Setting up a laboratory can be a daunting exercise for anyone new," Baker said. "We're fully licensed with equipment and staff, so we can help develop tests for a fraction of the cost."

For now, the number of companies that can access CLIAx's services is limited to three, which Baker said is intended to make sure there's "not a competition for resources." One company has already signed on to utilize CLIAx to its full extent.

Minomic, an Australian cancer diagnostic company with a blood test to estimate the risk of aggressive prostate cancer, signed an agreement with 20/20 earlier this month to use CLIAx as a "soft landing" site to enter the US market, Minomic CEO Brad Walsh said.

Baker said 20/20 chose Minomic as its first client because it has a similar mission to 20/20 — a focus on cancer screening. He added that 20/20 is mostly limiting the search for clients to companies with products in disease screening, wellness, and early detection, including cancer, cardiovascular disease, and diabetes.

For example, Baker said there's no interest in working with a microbiology company, since the lab isn't set up for that kind of testing.

"As long as a company fits our business model, they're welcome," he said.

Walsh said that Minomic has wanted to bring its MiCheck Prostate test to the US market as a laboratory-developed test, but that establishing its own lab in America was a tall order, requiring capital and resources before the firm could even launch its test.

The MiCheck test was licensed by Cirrus Dx for marketing in the US in 2019, but the agreement "naturally ended" in February of this year, after Cirrus got sidetracked by COVID-19 testing, Walsh said.

Minomic talked to other US labs about potentially licensing the test, but those labs had limited availability due to the COVID-19 pandemic, he added.

Instead, by using CLIAx, Walsh said that Minomic can learn from 20/20 and "take advantage of their experience" to build its test offering and manage the logistics of commercializing a test. It "first and foremost" plans to use CLIAx to conduct a validation study for the test, Walsh added.

MiCheck Prostate will be available in the last quarter of 2021, he noted, and Minomic's own US sales and marketing team is currently working on pricing and reimbursement, as well as finding early adopters, with 20/20's help. 20/20 will be the provider of the test until Minomic is able to start its own lab, he said.

CLIAx isn't supposed to be a permanent home for any of these companies, however. Baker said the goal is to offer the resources for a year or two and then see companies launch their own labs or facilities once their products are validated and commercialized.

The accelerator will be cyclical, with old companies leaving and new companies being welcomed.

Walsh echoed this idea, saying that Minomic plans to establish its own CLIA-certified lab in one to two years and "fly the nest," once it's able to find people to back the company on the equity side.

To join CLIAx, there's a cost-sharing plan where companies contribute to the overhead for the laboratory space — a couple of thousand dollars a month — with each company paying the same price, Baker said.

The services are shared between all companies in the accelerator and the lab is CLIA-certified, allowing firms to validate their tests in a regulatory-approved setting, he noted.

Baker estimated the cost for a company to build a laboratory by itself, with all the associated needs that entails, is around $2 million.

Eighty to 90 percent of the CLIAx space is set up, with the ability for companies to customize as needed for their tests. They can add instruments, although those will cost extra, and are free to call in additional experts if 20/20 doesn't have the right guidance, Baker said.

"A company can come in and get to work," Baker said. "We're by no means experts in everything, but we're giving them the opportunity to get a foothold."

20/20 is treating CLIAx with "a team approach," he added. "Our job is to make them successful."

The incubator concept has been around for years, largely in the tech and pharmaceutical spaces, but Baker said he believes this is the first one with "an A to Z approach" in the diagnostics arena, and the first to focus on ex-US companies.

A key benefit for 20/20 in hosting CLIAx is the chance to cut down on its own research and development costs, since the company would have certain marketing rights to tests launched through the accelerator, Baker said. If one of the firms in the accelerator has an "innovative test," he said, "we make money ourselves."

"It's instant R&D for us," he added.

"Depending on how the deal is structured, 20/20 would like to have marketing rights post-accelerator exit, as it has invested resources and time in targeting a new market," he said in an email.

The percentage of those rights will "most likely vary depending on market factors and time to market," such as the ease of market entry and acceptance of the test, Baker continued.

The marketing rights would be part of a "co-marketing agreement," where 20/20 sells the test in its specific vertical market — which would be defined in the agreement — and collects a commission on those sales, Baker added. The accelerator company would sell the test to a broader market and would pay 20/20 a fee to run the tests, he said.

However, the company doesn't anticipate gaining rights to any intellectual property from the companies in the accelerator, he said.

While the pandemic has slowed some supply lines down and made it more difficult to build everything out, such as lab space and equipment, Baker said 20/20 is currently hiring additional lab techs and that the full launch is planned for mid- to late-October.

He added that eventually the company plans to look for an even larger space to provide "ample space to grow" and the opportunity for more firms to join the accelerator.