By Kirell Lakhman

Quest Diagnostics has teamed up with Health Discovery Corporation and Smart Personalized Medicine to co-develop lab-based tests designed to help physicians select breast cancer therapies, the companies announced today.

Terms of the deal call for Quest to pay HDC and SPM upfront licensing and development fees and royalties on a per-test basis. HDC has owned a 15-percent stake in SPM since August 2008.

Financial details were not disclosed.

The agreements take Quest one step closer to fulfilling its promise to debut "more and more" esoteric tests.

In January during the firm's fourth-quarter earnings conference call, Quest said esoteric and genetic-based tests represented 36 percent, or $665 million, of its total revenue during the period, and said it is taking steps to ensure those high-margin assays continue to grow.

During that call, CEO Surya Mohapatra said "you will see more and more introductions of [gene and esoteric] products whether it is for colorectal cancer or for ovarian cancer."

The announcement with HDC and SPM comes a little more than one year after HDC said it had licensed to Quest the rights to develop a new urine-based test for clinically significant prostate cancer.

That agreement, which also includes Abbott, comprises two deals. The first deal enables Abbott to acquire co-exclusive clinical lab rights and exclusive in vitro diagnostics rights to commercialize HDC's tissue-based and urine-based prostate cancer tests.

The second deal enables HDC to license biomarkers to Quest to develop a non-invasive, urine-based prostate cancer test in exchange for payments, royalties, and additional undisclosed financial considerations.

HDC, based in Savannah, Ga., uses "mathematical techniques to analyze large amounts of data to uncover patterns that might otherwise be undetectable," the company said in a statement.

SPM, meantime, was set up to develop "new methodology of accomplishing detailed breast cancer patient diagnosis and personalized individual treatment."

Two years ago HDC acquired a 15-percent equity stake in SPM, which was founded by Richard Caruso, a former HDC board member and chairman and founder of Integra Life Sciences.

Caruso had resigned as a director of GDC to negotiate a license to use the firm’s support vector machine technology to develop a breast cancer prognostic test.

As part of its equity stake in SPM, HDC will receive a 7.5-percent per-test royalty based on net proceeds from sales of the breast cancer prognostic.