Will Quest Haunt Warnex's Dream to Dominate Septin9 Testing in Canada?

This post has been updated to include a comment from Quest.

By Kirell Lakhman

LAS VEGAS — Since I'm writing this in Las Vegas, where CLMA is holding its annual conference this week, I figured it's the proper place to stir up some speculation.

My latest bet is that Warnex Medical Laboratories' decision to start offering septin9-based colorectal cancer-detection testing in Canada, announced today, could place the relatively small lab into direct competition with Quest.

The potential rivalry unfolded today when Epigenomics said it has given the Canadian lab a non-exclusive, time-limited license to its septin9 biomarker, with which it intends to develop a real-time PCR-based LDT and begin offering it throughout Canada.

Warnex will become the first lab to offer septin9 testing in the country when it debuts it there in the next few months. But Quest could also add Great White North providers as customers for its own version of the septin9 assay, ColoVantage, also an LDT.

As I wrote in January, Quest became the first clinical lab to offer the test in the US after becoming the first lab to nab a non-exclusive license from Epigenomics in February 2008 to develop it.

Though Quest's biggest market is the US, the reference lab also "provides sales and marketing support to international clients for esoteric clinical testing performed at Nichols Institute" for providers in a variety of countries, including Canada.

Though Quest does not currently offer ColoVantage to Canadian providers, the Colorectal Cancer Association of Canada said in January that Quest "plans to market its new ColoVantage test as a supplement to other screening tools such as colonoscopy and fecal occult blood tests." A Quest spokesperson today told me that the company's "current focus for ColoVantage is on the US market."

Besides, the fact that Warnex's license is non-exclusive and time-limited could embolden Quest to secure a similar deal to begin offering the assay north of the border.

But more importantly, Canada represents a potentially large market for colorectal diagnostics like those made by Warnex and Quest. Deaths from the disease have been "declining" in recent years in Canada, the product of better drugs and a "growing number of Canadians [who are] getting checked" with traditional endoscopic and lab testing. Yet the disease remains the "second most common form of cancer in men and the third most common form of cancer … in women," a fact that could, and very likely will, lead to more screening and awareness programs.

Warnex currently has one other colorectal cancer play: It offers KRAS genetic testing, which has been shown to help identify patients whose tumors may become resistant to anti-EGFR therapies like Vectibix and Erbitux.

The assay could become an important revenue driver for labs that perform it because the American Society for Clinical Oncology in January 2009 urged routine KRAS testing to guide treatment for metastatic colorectal cancer.