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Biodesix Looks to Tap Into Chinese Market With $38M Bioyong Deal


NEW YORK (GenomeWeb) – Biodesix is aiming to make inroads into the Chinese market with its recent agreement with life sciences firm Bioyong.

The deal, under which Bioyong will pay Biodesix up to $38 million, provides the Boulder, Colorado-based molecular diagnostics firm access to Bioyong's network of hospital-installed MALDI mass specs on which the partners hope to place assays including Biodesix's Veristrat lung cancer test as well as other diagnostics currently under development, said David Brunel, Biodesix's director and CEO.

For Bioyong, the deal potentially expands the menu of tests the company can offer on its MALDI mass spec platforms, the Clin-TOF I and Clin-TOF II. Last year, Bioyong inked a deal with Agena Bioscience to use its instrumentation to run that company's MassARRAY system, which uses MALDI mass spec for readout of PCR-based nucleic acid assays.

Founded in 2011, Bioyong is involved in a variety of molecular diagnostic projects, including genetics and proteomics, but its primary focus to date has been MALDI-based microbial identification. Much like Bruker's MALDI Biotyper and BioMérieux's Vitek MS platforms, the company's Biotyper system, which runs on its Clin-TOF mass specs, uses MALDI-based proteomic profiling to identify microbes.

Bioyong has placed its instruments in a number of hospitals around China for clinical microbiology work, and, Brunel said, these placements provide a potential route for Biodesix to drive adoption of Veristrat and potentially other tests in China.

With around 800,000 new cases of lung cancer diagnosed annually, China is a promising market for the company's tests, Brunel said. In looking for a Chinese partner, he added, Biodesix was "surprised at the commonality of interests" between the companies.

"Looking at the Chinese market, we realized that we couldn't use a centralized lab model like we use in the US," Brunel said. "Not so much because of logistics but primarily because of the way payments are made [in China]."

"So we needed a distributed model, and [Bioyong] was placing their instruments in [many] major hospitals [for microbial ID] and continue to do so," he said. "That was interesting to us, and they were very interested in oncology, and we both have an interest in advancing the use of MALDI in the clinic."

Under the terms of the deal, Bioyong will assist in developing Veristrat for the Chinese market, a process that Brunel said will largely consist of clinical validation. He noted that the company has data from several Phase II and Phase III studies conducted with Chinese patient cohorts that indicate certain changes that could be made to the test to improve its performance in that specific population.

"We'll probably do some of that work and then we will have to do a validation study," he said, adding that he expected the test could launch commercially in China in around 18 months.

Bioyong will pay Biodesix roughly $38 million over the duration of the collaboration, with about half of that a fixed fee and the rest based on sales of the test.

"As you can imagine, taking a test like [Veristrat] and trying to figure out what is the expected penetration, what the pricing will be, etc., in the Chinese market is a complicated equation," Brunel said. "So we came up with an arrangement whereby we have set a fixed sort of price for the first half of the contract, and after that it will become more a typical royalty structure."

Another potential area of collaboration between the companies is Biodesix's work on proteomic tests for gauging the likely effectiveness of cancer immunotherapies in specific patients.

"Immunotherapy is entering the Asian markets, so we're going to be working closely with Bioyong on taking what we are working on [in the US] and coordinating its development in China," Brunel said.

The collaboration's model — in which the MALDI instruments Bioyong has installed in hospitals for microbial ID then serve as platforms for a wider array of mass spec-based molecular diagnostics — has also been proposed by several clinical proteomics researchers for the US.

For instance, SISCAPA Assay Technologies CEO Leigh Anderson suggested in 2013 that the widespread adoption of MALDI systems like Bruker's Biotyper and BioMérieux's Vitek MS represented "a very interesting case of mass spectrometry getting into clinical use almost under the radar ... and an interesting potential avenue to introduce mass spec protein assays."

Similarly, MRM Proteomics CEO Gary Kruppa, Bruker's former vice president for business development, highlighted in a 2014 interview, the possibility of developing clinical protein quantitation assays for Bruker's MALDI Biotyper instrument.

In the US, the Biotyper and Vitek MS systems have received 510(k) clearance from the US Food and Drug Administration, while in China those systems and the Clin-TOF I system have received approval from the Chinese FDA. The Clin-TOF I also received the CE-IVD mark in the EU in 2014, said William Xu, a spokesperson for the company.

The reach of Bioyong's mass spec network is fairly small, however. Even in China, the company is a relatively minor player in MALDI-based microbial ID, with Bruker and BioMérieux having the vast majority of market share. In total, Bioyong has around 30 customers for its instruments globally, Xu said.

Bioyong has currently little presence outside of China but plans to begin making its MALDI instruments, which it has developed in collaboration with Shimadzu, available in the US and EU markets this year, Xu said. He added that the company currently has more than 150 employees and is projecting 2017 revenues of around $20 million.