As Correlagen Scouts for New Lab Director, Will Helicos' Limbo Cloud Its Next-Gen Sequencing Play?

By Kirell Lakhman

Correlagen Diagnostics is on the market for a lab director to run its CLIA lab — a noteworthy position considering that Correlagen has become one of the first CLIA labs to use a second-gen DNA sequencer to run at least one test.

The Waltham, Mass.-based lab, which is the molecular diagnostics Center of Excellence for LabCorp, said the director will be responsible for "oversee[ing] quality control and reporting for our laboratory operations team."

Correlagen said the director will also be "responsible for providing daily technical and scientific analysis of data, revision and release of patient reports, and communication with physicians.

The director, which will be required to hold an MD degree of a Doctorate in Genetics and and/or post-doctoral training in clinical molecular genetics, will also be responsible for "assuring the proper implementation of medical, scientific and technical procedures and policies in relation to Correlagen gene test offerings and new products development."

I would add that it couldn’t hurt for the candidate to be at least familiar with second-gen sequencers, especially Helicos BioSciences' HeliScope. As I reported last October, Correlagen became the latest CLIA shop to embrace second-generation DNA sequencing — in its case by investing in Helicos' single-molecule sequencing platform — with the goal of improving its clinical diagnostic offerings by lowering costs and improving throughout.

At the time, the lab said it planned to use the platform to offer “novel, high-content, genetic tests based on resequencing broad panels of genes involved in disease areas such as cardiology, endocrinology, neuropsychiatry, and immunology.”

A few days after that post, Correlagen launched its first test on the HeliScope: a 300-gene panel designed to diagnose familial cardiovascular diseases, including cardiomyopathy, arrhythmia, thoracic aortic aneurysm, Noonan Syndrome and related diseases, and early-onset coronary artery disease.

The assay, called CardioGeneScan, interrogate around 125 genes linked to the disorder and 175 genes of research interest. Correlagen released the panel to a limited number of customers later that month and embarked on a more general release in early December.

When it launched the test, Correlagen said it will add new genes to the CardioGeneScan as additional associations with inherited cardiac disease are uncovered.

But in my post from last October I also asked whether Correlagen was taking a risk by placing its bet with privately held Helicos, which, like all young start-ups, will inevitably face financial turbulence as it balances the need to conserve scarce capital with a desire to place its instrument in as many labs, both clinical and research, as possible.

I asked that question because Helicos the previous month hired an investment bank to review its "strategic alternatives," a move triggered by a cash shortage. (At the end of March Helicos had around $11.3 million in cash and equivalents on hand.) I asked whether Correlagen's decision was premature, and wondered whether Helicos' disclosure would dampen it ability to sell the Heliscope to other clinical labs.

Correlagen's relationship with Helicos becomes even more noteworthy in this light because the companies have a deal in place to work together to optimize sample-preparation methodologies “that benefit from single-molecule sequencing in the context of targeted resequencing, as well as on data analysis and visualization technologies for sequence variant detection, annotation, and clinical reporting,” Helicos said in September.

Yet at the time, neither partner seemed too concerned with Helicos' predicament.

"We believe that the Helicos system will allow us to provide DNA-based clinical assays of unprecedented value for the diagnosis of genetic disorders," Correlagen CEO David Margulies said. He also called Helicos “the obvious choice” and said the resulting assays “will have unmatched breadth, precision, and clinical utility."

Helicos CEO Ron Lowy added that "[w]e … look forward to working with [Correlagen] as they develop diagnostic tests” on the platform.

And in a kind of a coda, in April Helicos said it has begun considering "alternatives" to its current long-term strategy, "including a repositioning of the company in the genetic analysis markets" with a particular focus on the molecular diagnostic sector.

The disclosure, made in an SEC filing, also noted that Helicos has "engaged a variety of consultants in the genomic research, services and diagnostics industries to evaluate available alternatives."

Helicos said that the repositioning evaluation process will take "at least several months." During this time, it said it will "focus its limited resources on satisfying current customer needs and stabilizing system performance, which has varied at some customer and placement sites."

This last comment, together with Helicos' plan to consider refocusing on the molecular diagnostic sector, represents at least some bright news for Correlagen and other CLIA labs considering investing in a Helicos platform.