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Natera Sees Foundation Medicine Deal as 'Additive' to Other Cancer Monitoring Opportunities

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This article has been updated to correct the number of Foundation Medicine's biopharmaceutical partnerships and a statement regarding the sensitivity of its liquid biopsy test.

NEW YORK – Natera's recent deal with Foundation Medicine to develop personalized cancer monitoring assays will allow it to piggyback on the Roche subsidiary's dominant market share in tumor genomic profiling to establish its Signatera test for use in advanced cancer patients, while continuing to pursue other opportunities for the test on its own.

Foundation Medicine, on the other hand, is banking on Natera's technology and expertise in circulating tumor DNA analysis to bring monitoring assays to patients more quickly than it could on its own.

Under the agreement, announced on Tuesday, the companies will jointly develop and commercialize blood-based personalized ctDNA monitoring assays, initially for biopharmaceutical customers and later on for clinical applications. The deal follows a $50 million agreement that Natera struck with BGI in March to bring its Signatera ctDNA liquid biopsy test to China.

To design the personalized assays, the partners will use results from Foundation Medicine's FoundationeOne CDx, a targeted sequencing test that looks for alterations in 324 genes and select gene rearrangements in DNA from solid tumors. Natera will then use an algorithm to define a set of patient-specific variants that the monitoring tests will follow in cell-free DNA, using multiplexed PCR and sequencing. Later on, the companies may also start building monitoring tests on results from Foundation Medicine's other two tests, FoundationOne Liquid and FoundationOne Heme.

Natera launched its Signatera ctDNA monitoring assay two years ago for biopharmaceutical and clinical research. It uses the same approach — monitoring patient-specific mutations in blood via multiplexed PCR and sequencing — but starts with exome sequencing rather than a targeted gene panel like the FoundationOne CDx test to define those mutations.

By partnering with Foundation Medicine, Natera will be able to shorten the design process by relying on already-available results from a tumor profiling assay instead of having to start with exome sequencing.

"The opportunity with Foundation Medicine is really exciting because they already have done the sequencing of the tumor," said Natera CEO Steve Chapman. "We thought Foundation Medicine was an ideal partner because clinically, they have a very strong reputation, they are the market leader, they have a very significant focus on quality. Commercially, they have a dominant position in the United States, where now they're doing more than 100,000 tumor sequences per year," he said, adding that Foundation also has more than 50 active partnerships with biopharmaceutical companies.

He emphasized that the partnership is focused on late-stage metastatic cancer patients, which account for almost all of Foundation Medicine's tumor profiling assays today, and that the goal is to monitor the effectiveness of targeted cancer therapies and immunotherapies in these patients.

As such, the deal will not detract from Natera's own efforts to establish its exome sequencing-based Signatera assay in other areas. "The exome-based Signatera is not part of this collaboration and we think that this is additive, given [Foundation Medicine's] built-in patient population that has already gotten sequenced, and given their marketing channel and their very strong presence with biopharmas," Chapman said.

Natera sees multiple opportunities for Signatera, the largest being in minimal residual disease and early relapse detection in stage II/III colorectal cancer patients, for which it received a draft local coverage decision from Palmetto last month. That indication could result in more than a million tests per year, Chapman said, "which we believe would make this the largest specialty diagnostic test of all time."

Both types of monitoring tests — based on a targeted sequencing panel and on exome sequencing — will likely have separate utility. "We think they're both going to be important," he said. "There are certain applications where it makes more sense to do the exome-based product and there are certain applications where it makes sense to do the monitoring built off a comprehensive genomic profile," he said. "We now have very comprehensive coverage of both early- and late-stage circulating tumor DNA assessments, which puts us in a very strong position."

As part of the deal, Foundation Medicine is paying Natera $13 million in upfront technology licensing fees and prepaid revenues. Foundation Medicine declined to comment on what technologies the license includes but Chapman said that Natera's expertise in multiplexed PCR and sequencing cell-free DNA "is unmatched in the world" and that the company has more than 70 issued patents that "cover all aspects of our core technology," in addition to application-specific IP. "We haven't gone on the offensive with that portfolio but we do have a very strong position," he said. Natera is applying is multiplexed PCR expertise across its test portfolio, he added, including its noninvasive prenatal test, kidney transplant rejection test, and ctDNA monitoring test.

Foundation Medicine CEO Cindy Perettie said her company recognized that Natera is a leader in ctDNA monitoring. "We determined that partnering with Natera would be a more efficient path to bring personalized monitoring assays to patients faster" than developing such tests in house, she said in an email.

Personalized ctDNA assays have "the potential to transform the way patients on targeted cancer therapies and immunotherapies are monitored for disease progression," she said, and "monitoring represents a natural extension of FMI's current genomic testing portfolio."

Foundation Medicine does have its own liquid biopsy test, called FoundationOne Liquid, which uses hybridization capture-based targeted sequencing to evaluate alterations in 70 genes. But while that test is useful for identifying potentially actionable variants or resistance mutations, particularly in patients who do not have tumor tissue available, it might be less suitable for monitoring ctDNA levels over time. For that, a test like Signatera that sequences very deeply and focuses on a limited number of mutations would be better suited, according to Alexey Aleshin, Natera's senior medical director of oncology.

"We really see the two tests as complementary, not competitive," Aleshin said, explaining that Signatera could be compared to an HIV viral load test that monitors the presence of disease but doesn't go into detail. "It's a great test to monitor the status of the disease but as soon as you see that something's changing, you see the HIV viral load going up, then you do a broader test, like sequencing the HIV genome, to see if there is a resistance mutation," he said.

Starting next year, Natera and Foundation Medicine initially plan to focus on ctDNA monitoring in biopharmaceutical trials to establish its clinical utility. Chapman said this could be done in two ways: retrospectively, analyzing samples from trials that are already completed, or prospectively in clinical trials that want to include therapy monitoring. Foundation Medicine declined to elaborate on the nature of the planned trials at this time as they are still in the development phase.

Chapman said that together with the BGI partnership, which potentially gives Natera access to patients in China for clinical trials, "we've really set up an amazing opportunity to partner with a very big pharma market, and we think we've gotten a head start on any competitors that come behind us."

Guardant Health, for example, is also offering a cancer monitoring assay, called Lunar. Like Natera, it is looking for applications in colorectal cancer.

Later on, Natera and Foundation Medicine plan to make the monitoring assays available to clinical customers, initially as CLIA tests, Chapman said, "although we're designing the validation studies and the quality systems and the regulatory roadmap so that we would be able to bring the product to the FDA if that's required or if we do want to enter into any registrational trials in the future."

According to Perettie, the initial focus for clinical testing will be on a subset of tumors that have a high unmet need, though she did not provide examples.