Contrary to the fanfare surrounding its launch by Silicon Valley celeb Jim Clark four years ago, DNA Sciences hasn’t had what you would call an auspicious start. Consider its crisis-ridden last 20 months: In February 2001 COO Gregory Went resigned; five months later the company withdrew its IPO; next, the board ousted CEO Hugh Reinhoff; and most recently CSO Ray White departed for the Ernest Gallo Clinic, though he’ll remain on DNA Sciences’ board. The company has shrunk its staff from a high of 175 down to a tidy 60.
Steven Lehrer, business development-director-turned-COO, said at the time of Reinhoff’s departure that he would use the change in management as an opportunity to rewrite DNA Sciences’ mission to focus “on the most viable commercial opportunities.”
Those, he has concluded, are DNA-based diagnostics. “Previously the company was trying to do a large primary genetic discovery effort. That was important [but] it takes many years and a lot of hard work to figure out how to make a gene useful once you find it. We concluded that right now it didn’t seem commercially viable.”
Instead, the company is fitting itself into a niche serving pharmaceutical companies that, Lehrer says, “have been told by the FDA that in order to get their drug approved they’ll have to have an accompanying diagnostic.” So far, it has signed GlaxoSmithKline and Bristol-Myers Squibb as customers.
Lehrer says that among DNA Sciences’ three facilities in Research Triangle Park, Fremont, Calif., and Cambridge, UK, the company has “the patient samples we can use for variant discovery, the sequencing infrastructure, and the CLIA-approved lab to support pharma trials.” DNA Sciences will retain rights to the diagnostics it develops, but will benefit from the drug distributor’s reliance on them. “We’d commercialize the diagnostic, but undoubtedly their sales force would talk about it,” Lehrer says. “When you detail you say, ‘You have to order this test before you can deliver the drug.’ When the doctor orders the test, the [patient] goes to the lab and the lab is purchasing the test from DNA Sciences.”
At the moment, Lehrer says the company’s lead product is a test it is developing with Glaxo for identifying a cardiac ion channel variant that puts patients at risk of fatal arrhythmia — a condition known as Long QT Syndrome. While the volume of work DNA Sciences labs perform now doesn’t come close to the likes of Quest or LabCorp, Lehrer says, “We might become like that.” The arrhythmia test, he estimates, has between a half-billion and a billion-dollar market. Did someone say commercial viability?
— Adrienne Burke