This article features contributions from several additional 360Dx editors.
SAN FRANCISCO (360Dx) – The 35th Annual JP Morgan Healthcare Conference continued this week with several life science research tools and diagnostic firms making presentations to investors and other attendees.
The following are summaries of presentations and breakout sessions on Wednesday by Opko Health, Accelerate Diagnostics, Oxford Immunotec, GenMark Diagnostics, PerkinElmer, Berry Genomics, Guardant Health, and Invitae.
In August 2015 Opko Health acquired Bio-Reference Laboratories launching the firm into the diagnostics space. In a webcast presentation, Steve Rubin, executive vice president, administration for Opko, said that Bio-Reference now pumps almost $1 billion annually in revenues into the firm.
Along with its diagnostics business, Opko comprises a therapeutics business and an animal health unit. In diagnostics, the focus is on the 4KScore test for prostate cancer and the Claros testing platform.
The 4KScore test, launched several years ago, measures four prostate-specific kallikreins in blood — total prostate-specific antigen, free PSA, intact PSA, and human kallikrein — to identify men who have a high likelihood of developing an aggressive form of prostate cancer.
While the test has a national reimbursement rate of $602.10 from the Centers for Medicare and Medicaid Services for 2017, two different contractors have provided opposing coverage determinations, putting its reimbursement status in jeopardy. Initially, Novitas Solutions, the Medicare contractor for New Jersey, where an Opko facility is located, issued a positive coverage decision for 4KScore. But when Palmetto GBA issued a negative coverage determination, Novitas pulled its positive determination.
According to Opko, Palmetto has concerns around clinical study protocols and clinical utility for the test, which the firm is addressing. The company has supplied both scientific and clinical data to support a local coverage decision.
Rubin said that Novitas continues to pay for 4KScore, but Opko is getting reimbursed for only half of the tests being submitted. A review of the test by Novitas is expected in February, "and getting CMS coverage, a positive coverage decision will basically flip the switch and get us the rest of the coverage we need," he said.
On the Claros point-of-care platform, last week Opko announced the start of a clinical validation study for the total PSA microfluidic assay cassette running on the immunoassay analyzer. Eventually, Claros will be integrated with a molecular diagnostics instrument being developed by Opko's Biomarker Discovery team.
Claros uses a finger stick of blood and generates test results similar to that of a reference lab, but in a physician's office. Results are achievable in 10 minutes, Rubin said, adding that because billing codes already exist for the kind of tests Claros would run, reimbursements would not be an issue for physicians using it.
The validation study is anticipated to last about three months, with data available by the end of 2017, Rubin said. A modular premarket approval application is expected to be filed with the US Food and Drug Administration in the first half of this year, and a 510(k) submission for a testosterone test is anticipated in the second half of 2017.
President and CEO Lawrence Mehren said that he is highly confident that the firm will receive FDA clearance for its Accelerate Pheno system, a fully automated system for high-speed identification and antimicrobial susceptibility testing of pathogens, in the first quarter this year, along with its PhenoTest BC kit.
The Pheno system incorporates single-cell imaging, electrochemistry, and automated image analysis, among other features. According to Tucson, Arizona-based Accelerate, it simplifies the workflow for pathogen detection to just five steps versus more than a dozen for traditional testing technologies. It also conducts antimicrobial susceptibility testing (AST) as part of the Pheno workflow, providing results for pathogen identification in 90 minutes and AST results five hours later.
That ability to do both ID and AST is what the company believes will set its system apart from any other technology on the market, including molecular systems offered by the likes of T2 Biosystems, Nanosphere, Bruker, BioMérieux, and Becton Dickinson, among others.
In addition, Mehren said the Pheno provides a definitive monomicrobial result, and he hopes the FDA will grant that claim for the system, which means hospitals wouldn't have to wait for an additional confirmatory test.
Mehren said the Pheno system will enable rapid escalation or de-escalation of therapy, thereby reducing ICU days for patients, reducing readmissions, decreasing the use of unnecessary antibiotics, and leading to earlier discharge of patients — all of which will save hospitals thousands of dollars per patient.
Accelerate expects to launch the BC assay for positive blood culture samples with 135 to 140 targets. But the number of organisms will increase, and the firm will add genotypic resistance markers to its ID panel, said Mehren.
Mehren noted that the company has 13 early-access sites conducting studies with the Pheno system, and it has already signed a number of contracts with hospitals pre-launch. The company also is conducting pilot studies on a respiratory sample kit and is aiming for a CE mark on that product in the fourth quarter of this year. Accelerate has 42 sales and support staff in North America, and another 31 for the EMEA region. As of the end of 2016, the firm had $80 million in cash, and its quarterly burn rate is $13 million to $15 million.
CEO Peter Wrighton-Smith discussed new tests on the way for the UK firm including Lyme disease, babesia, and transplant diagnostics. These tests would extend Oxford's franchise beyond its core TB-Spot test, an interferon gamma release assay for latent tuberculosis identification that has been on the market for several years but which is seeing accelerated sales growth.
There are only two IGRAs for latent TB on the market, Oxford's TB-Spot and Qiagen's QuantiFERON-TB Gold, and the firms are currently locked in litigation over patents covering Oxford's test.
According to Wrighton-Smith, the firm has sold a total of 9 million of the TB-Spot tests, which are an alternative to the traditional and not very effective skin tests used to detect latent tuberculosis — and a third of that total has come in just the last 12 months. Yet, IGRAs still have penetrated only around 20 percent of the latent TB test market, which Wrighton-Smith pegged as a $1 billion opportunity.
Among the other tests offered by Oxford are two Lyme disease assays, which the firm gained through its acquisition last year of Massachusetts-based firms Imugen and Immunetics.
Immunetics has developed a C6 ELISA lyme disease test, while Imugen's PCR-based tests detect the presence or absence of causative organisms of not only Lyme disease, but also babesiosis, anaplasmosis, and ehrlichiosis. Wrighton-Smith on Wednesday stressed the importance of testing for co-infection in endemic regions, noting that babaesia in particular is a major risk to the US blood supply.
Oxford also is developing two tests for transplant diagnostics, the T-Spot.CMV, which targets a $150 million market opportunity and is expected to launch this quarter, and the T-Spot.PRT (panel of reactive T cells for solid organ transplant diagnostics), which represent a $300 million market opportunity and is slated for a third quarter 2017 launch.
Wrighton-Smith noted that Oxford Immunotec had $50 million in cash as of the end of 2016, and it anticipates reporting FY 2016 revenues between $85 million and $85.8 million.
GenMark President and CEO Hany Massarany provided an update on the upcoming assays for the firm's new ePlex system, the successor to its XT8 machine. The firm filed for FDA clearance of the new system last month. The ePlex instrument integrates and automates all components of the testing process, from nucleic acid extraction and amplification, through detection, interpretation, and reporting, and enables bi-directional integration to laboratory information systems and the ability to provide customer support via remote access.
The firm launched the system along with a respiratory panel in Europe in mid-2016. Massarany said GenMark filed a 510(k) application with the FDA last month for the panel, which includes 18 viral and three bacterial targets.
In addition, GenMark intends to launch a blood culture ID test for sepsis soon in Europe, and aims to seek US clearance later this year. That test includes gram positive, gram negative, and fungal panels with 59 distinct targets in total, said Massarany. The firm expects to launch those panels in Europe during this quarter.
It also is developing a gastrointestinal pathogen panel, which Massarany said will have 30 percent more targets than competitors. That panel is expected to launch in Europe later this year with a US launch targeted for 2018.
Earlier this week, the firm reported preliminary fourth quarter revenues of $14.9 million, a 13 percent year-over-year increase. It also said that it completed 2016 with more than 55 customer agreements globally representing more than 85 ePlex instruments.
In a webcast presentation, PerkinElmer Chairman and CEO Robert Friel provided an update on the company's activities, stressing the importance of its diagnostics business and its growing market share.
Diagnostics makes up 30 percent of PerkinElmer's revenues and 45 percent of its profits, Friel said. Of that 30 percent, 60 percent comes from reproductive health diagnostics, 25 percent comes from infectious disease diagnostics, and the remaining 15 percent comes from oncology diagnostics.
PerkinElmer had 70 percent of market share in newborn screening at end of 2016, according to Friel. Further, he added, the three areas that currently make up the company's diagnostics business present exciting growth opportunities that will continue to allow the business to grow at a high single-digit rate organically.
Specifically, he said developing markets today are seeing an increase in maternal age from late-20s to mid-30s, implying increased rates of high-risk pregnancies, which is leading to higher testing rates on mothers and fetuses. Despite the attention being paid to noninvasive prenatal testing (NIPT), however, Friel said PerkinElmer doesn't believe that current NIPTs are safe, reliable, or cost effective.
Instead, Friel highlighted PerkinElmer's development of a "molecular NIPT that doesn't use sequencing or PCR," and which is designed for population screening. PerkinElmer acquired the technology when it bought Swedish startup firm Vanadis Diagnostics in February 2016. It's currently in beta testing and the company plans to roll it out for research-use only at first. The test will likely be made widely available in late Q1 2018.
Berry Genomics' CEO Daixing Zhou said that the firm's noninvasive prenatal test (NIPT), which it sells as an in vitro diagnostic and as a testing service, enabled the company to net profits of around $10 million in the first half of 2016. Despite lower prices of between $200 and $300 in China, Zhou said it is possible to be profitable due to the scale.
The molecular diagnostic company expects that NIPT will begin becoming available to the general population in China in 2017, and that the firm will be well positioned to capture a large portion of that market through the relationships it has with the hospitals that already sell its NIPT that received clearance from the China FDA in 2015.
In addition, Zhou said that the company continues to expand the number of indications it screens for, adding other aneuploidies as well as microdeletions and microduplications, and plans to begin single-gene disorder testing in 2017. Berry has also made progress in its oncology business, developing a cell-free DNA assay for which it plans to seek CFDA approval. And, Zhou said that this year Berry plans to complete a reverse merger with Chengdu Tianxing Instrument & Meter, a process it started last year, which would enable it to become a publicly traded company without having to go through an IPO.
In China, there are two business models for offering NIPT, Zhou said. Tests are either sold to hospitals as IVDs or are offered by centralized reference laboratories. In either case, the test must have CFDA approval. Zhou estimated that Berry currently has about 70 percent of the IVD-based NIPT market in China.
In 2016, the Chinese government initiated a pilot program for genetic testing that enabled 108 hospitals and five reference laboratories in partnership with hospitals to become licensed to perform NIPT. Zhou said that when this pilot program began, Berry worked directly with hospitals to help them establish laboratories to run its NIPT. That work has put the firm in a good position to expand to other hospitals after the Chinese government expanded the NIPT program in late October, granting licenses to around 300 hospitals and enabling all prenatal screening centers and certified reference laboratories in partnership with hospitals to perform NIPT, Zhou said. The "field has opened up substantially," he said, and he anticipates that this is one step toward screening becoming available for not just high-risk pregnancies, but the general population.
The company has also been moving into the oncology space. Last year, Zhou described circulating single-molecule amplification resequencing technology (cSMART) to assess circulating tumor DNA. The company has conducted two clinical trials and in 2016 launched the nine-gene assay for non-small cell lung cancer in 22 hospitals as part of China's pilot program for clinical NGS testing. He said around 1,200 samples have been tested and the assay has comparable performance with droplet-based digital PCR. The company most recently published a study last November in the Journal of Molecular Diagnostics validating the assay in 103 patients with advanced lung adenocarcinoma. Zhou said the next step is to bring the test through CFDA clearance. In addition, he said the firm is working on another cell-free DNA assay that uses the cSMART technology for colorectal cancer.
Guardant Health CEO Helmy Eltoukhy said that the liquid biopsy firm has captured more than 80 percent of the liquid biopsy market, having sequenced more than 30,000 patients. Ultimately, Eltoukhy estimated that the total market opportunity could be more than $20 billion.
The firm launched its Guardant 360 assay in 2014, and Eltoukhy said that by leveraging the data it collects over time, the assay has continually improved its performance. That improvement is what will eventually enable the company to develop noninvasive assays for cancer recurrence and early detection, which the firm aims to do with Project LUNAR, a clinical trial that it launched last May.
Eltoukhy said that the company aims to develop two assays based on the trial results. The first Lunar assay would have a $1,000 or less price tag and would have applications for a number of cancer indications, including lung, ovarian, breast, and colorectal. A second Lunar assay would make use of epigenetic signals to identify the tissue of origin of someone with early cancer. Eltoukhy did not provide a timeline for when these assays would be available.
Sean George, Invitae's newly minted CEO, discussed the company's efforts to bring genetics into mainstream care in a webcast presentation. Invitae is working toward that goal, contingent on making testing affordable to the masses by aggressively lowering its own cost of goods sold from $1,100 per sample in Q1 2015 to $450 per sample in Q3 2016.
Invitae is partnering with others players in the genetic testing industry, pharmaceutical companies, and payors to expand patient access to genetic testing. For example, in a partnership announced last year with Illumina-backed start-up Helix, Invitae said it planned to launch health apps this year so people who had their exome sequenced but were at low risk for cardiovascular disease or cancer could learn their genetic risks for these diseases. The projected price for the initial sequencing and interpretation will be around $200.
George said that this partnership with Helix will allow Invitae, which has so far operated as a traditional medical genetics firm, to reach a new population with its tests. "It leverages our investment in cost-effective infrastructure to do genetic interpretation to scale in partnership with Helix's genome marketplace capabilities, [and] allows us to bring that quality interpretation to a large group of individuals who otherwise would not have access to that," he said during his presentation.
Payors will also become an important part of Invitae's commercial strategy. "It's in their interest to drive the market toward comprehensive high-quality, value-based genomic information management," George said. The company recently reported that during the fourth quarter it inked several coverage agreements with large insurers, bringing the total number of covered lives for its tests to more than 175 million by year end, up from 5.5 million covered lives in Q1 2016.
Last year, Invitae also made progress partnering with pharmaceutical companies. George said that the company has been in discussions with a handful of companies who are developing drugs targeting the genetic underpinnings of diseases, and many of them have even reached out to Invitae to ask for help in screening patients for clinical trials, sponsoring testing programs, engaging with physicians, and identifying new genes and pathways that their drugs might interrogate.
As an example, George highlighted that Invitae is working with BioMarin on a program called "Behind the Seizure," to identify children who might have a genetic disorder and might be good candidates for a drug under development.
"While 2016 was laying the groundwork for this, in 2017 we'll be pursuing [pharma partnerships] in earnest," George said. "We've now put some commercial resources behind it."