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Jefferies Healthcare Conference, Day 2: Myriad; Danaher; Cepheid; Exact Sciences

By a GenomeWeb staff reporter

NEW YORK (GenomeWeb News) – The second day of the Jefferies Global Healthcare Conference held here featured several life sciences tool vendors and molecular diagnostic developers. Below are snapshots from several of those firms' presentations.

Myriad Genetics

Mark Capone, president of Myriad Genetic Laboratories, talked primarily about the firm's pipeline of tests. Following its recent $80 million acquisition of Rules-Based Medicine, Myriad has 14 new tests in development for a variety of psychiatric and neurological conditions, cancer, and other indications.

The first of these new launches will be its Melanoma Dx test, which is expected to be launched later this year. It also currently has a tissue BRCA test, a lung cancer prognosis test, and a kidney damages test that was developed by RBM in clinical validation studies.

Capone noted that Myriad derives only around 5 percent of its sales from Europe, and the firm has plans to aggressively go after that market. Myriad plans to open its European headquarters in Zurich with a lab to be established Munich. It also plans sales offices for France, Spain, and Italy.

Danaher

Danaher President and CEO Larry Culp told investors at the conference that the firm expects to complete its $6.8 billion acquisition of Beckman Coulter later this month. While he didn't provide specifics on Danaher's plans for the business, he provided an overview of what Danaher has been able to do with previous acquisitions Leica Microsystems and AB Sciex as examples of the path that could be followed with Beckman.

He said that in the year after acquiring AB Sciex, Danaher embarked on a branding strategy, launched a new mass spectrometer (Triple TOF 5600), pumped a double-digit increase into marketing efforts, and jumped into new markets through the acquisition of Eksigent's liquid chromatography business and expansion in Asia. In addition, AB Sciex streamlined its distribution centers from 11 to eight, and it increased its demonstration centers from seven to 10.

Over a five-year period after it purchased Leica Microsystems, Danaher was able to grow that business' market opportunity from around $3 billion to $5.5 billion, which came from a combination of growth in existing markets served as well as expansion in virtual microscopy, histology and consumables, and immunohistochemistry and advanced staining. During that period, Leica's revenues jumped from $525 million to $1.1 billion, while its return on invested capital increased to double digits from the mid-single digit level.

Beckman Coulter's $3.7 billion in annual revenues will be added to the $2.3 billion Danaher currently gets from its Life Sciences and Diagnostics segment. The acquisition will also push that segment's revenue contribution up to around 36 percent of Danaher's total revenues from around 18 percent.

Cepheid

Cepheid CEO John Bishop provided an overview of an ambitious pipeline of products the firm hopes to have on the market in the US and Europe over the next five years. Currently, Cepheid has 11 tests cleared by the US Food and Drug Administration for marketing in the US and another 12 tests available outside the US.

While the firm has been known for its early push into the hospital-associated infections market with its molecular diagnostic tests and its GeneXpert system, Cepheid has been moving into testing for a variety of other infectious diseases and sees a rapid expansion of its menu.

Bishop said that by the end of 2012, the firm expects to have 14 tests available in the US and 13 outside of the US. By the end of 2014, he said the firm is shooting for a total of 23 tests available in the US and 24 outside of the US, targeting conditions such as tuberculosis, human papillomavirus, vaginosis, bladder cancer recurrence, and breast cancer Rx stratification. By the end of 2016, Cepheid is targeting 47 tests on the global market, of which Bishop expects 39 to be available in the US either as FDA-cleared IVDs or as CLIA-waived tests.

Cepheid previously was focused on larger hospitals, and it still expects to sell directly to around 2,100 hospitals in the US with 150 or more beds, said Bishop. However, the firm recently struck a deal with Labsco to distribute its systems and tests in the US to acute care hospitals with less than 150 beds, a market in which it has yet to make significant inroads.

Exact Sciences

Unlike Cepheid, with its plans for broad menu expansion, Exact Sciences is focused on bringing its first product — the Cologuard test for early detection of colon cancer — to market in the US. President and CEO Kevin Conroy said the firm is on schedule to start its pivotal clinical trial of the test in the third quarter of this year with an FDA submission planned for 2012.

Conroy said that the trial will include between 40 and 60 enrollment sites and between 10,000 and 12,000 patients. Cologuard, which is a non-invasive, stool-based test, is a combination of two DNA methylation markers, seven DNA mutation markers, and a hemoglobin marker. In a validation study of 1,178 samples, the test demonstrated 85 percent cancer sensitivity, 64 percent pre-cancer sensitivity, and 88 percent specificity, but with modifications the specificity should go above 90 percent, said Conroy.

Exact Sciences believes the test has a potential US market of $1.2 billion, based on 30 percent penetration, a $300 target reimbursement for the test, and a repeat testing every three years.

Conroy said the firm hopes to have Cologuard cleared and on the US market in 2013.

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