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JP Morgan Healthcare Conference, Day 2: Thermo Fisher Scientific, Qiagen, Gen-Probe, Exact Sciences

This article has been updated from a previous version to correct the specificity of Exact Sciences test. The specificity was 91 percent, not 81 percent as originally reported.

SAN FRANCISCO (GenomeWeb News) – The second day of the JP Morgan Healthcare Conference included several of the best-known names in the genomics space.

On Tuesday, GenomeWeb Daily News reported separately on presentations from Illumina and Life Technologies. Below are capsules from some of the other presenters.

Thermo Fisher Scientific

While Thermo Fisher Scientific CEO Marc Casper didn't have any news to break to investors, he provided an update on a restructuring program and sought to allay concerns about the academic market.

Casper noted that Thermo Fisher has been taking "incremental cost actions" in response to the challenging academic end market. He said these moves, which include layoffs, facilities consolidation, and tighter spending controls on discretionary costs, such as travel, are expected to save the company $55 million in 2012.

Casper said that although the political climate has "spooked" academic customers, there have been several recent positives to counter those concerns. Among them are the recent one percent budget hike for NIH for 2012 and what appears to be an improving US economy.

He said the firm's restructuring efforts have made it "prepared for the downside scenario" regarding NIH funding in 2013. However, he doesn't think a potential 8 percent cut to NIH that would be part of $1.2 trillion in across-the-board cuts to discretionary federal spending expected for FY 2013 will happen.

Thermo Fisher has been an aggressive acquirer over the past several years, and it has balanced its use of cash between such purchases and share buyback programs, such as the $750 million program announced in November.

Casper was asked during a breakout session if Thermo Fisher would consider a dividend to shareholders rather than returning cash through share repurchases. He said he has been asked about such an option often over the past several months, and while he is discussing it with the company's board, he said the decision would be made after thoughtful consideration and not as a reactionary move.

Qiagen

Qiagen released the brunt of its news earlier in the week when it announced collaborations with two firms in the US, as well as with the Max Planck Institute for Infection Biology, and regulatory approval of an EGFR companion diagnostic in Japan.

Qiagen CEO Peer Schatz focused his presentation on Tuesday on the continuing ramp-up of QIAsymphony and the potential of the firm's tuberculosis tests.

Schatz said that the company is still in the early stages of rolling out QIAsymphony, which was launched in September 2010. Qiagen has so far placed more than 550 of the instruments, and Schatz said that it is reasonable to expect an average of about 50 placements per quarter during 2012.

Typically, customers have used the platform initially to run one or two assays, which would generate revenues of about $30,000 to $50,000 per year. But users have quickly adopted greater use of the platform, translating to revenues of "several hundreds of thousands of dollars."

Schatz also pointed to TB testing as a major growth area for Qiagen. Though much focus has been on the firm's portfolio of tests for human papillomavirus, HPV testing makes up only 15 percent of Qiagen's total revenues.

With its recent purchase of Cellestis for $355 million, Schatz said that TB could be a larger franchise for Qiagen. In total, TB testing is a $700 million to $800 million opportunity for the company, he said.

Cellestis' lead technology is called QuantiFeron and its lead product is the QuantiFeron TB Gold-in-Tube test for latent tuberculosis. In addition to screening purposes, Schatz said that there could be opportunities in using the technology for companion diagnostic applications.

On the HPV front, he said the firm is targeting expansion into Eastern Europe, Latin America, and Africa.

Gen-Probe

Gen-Probe President and CEO Carl Hull told investors that the firm has placed a few dozen of its Panther molecular diagnostic instruments since its launch in Europe in late 2010. The system is its next-generation testing platform targeting the low- to mid-volume testing space.

Gen-Probe expects to receive US Food and Drug Administration clearance of the Panther system in either the first or second quarter of 2012.

In addition, the firm is banking on its human papillomavirus test, which was cleared by FDA in October, and its PCA3 test for prostate cancer, which has been submitted for FDA clearance, to help drive revenue growth later this year and beyond. Hull said the firm expects low double-digit revenue growth in 2012.

In addition, he said Gen-Probe has two new instrument platforms in development. One system will combine real-time PCR with Panther. It is expected to be launched in 2015 and will provide a proprietary platform for the PCR assays developed by Prodesse, said Hull.

The other system is a liquid-based cytology platform that Gen-Probe expects to commercialize next year.

Exact Sciences

Though Exact Sciences didn't present at the JP Morgan Healthcare Conference, it did present at the Biotech Showcase, a conference running in parallel down the street from the JP Morgan venue.

At that conference, Exact Sciences CEO Kevin Conroy provided an update on the firm's plan to commercialize its Cologuard colorectal screening test.

The company has said that it anticipates filing a premarket approval submission with the US Food and Drug Administration for the test during the fourth quarter of 2012. The firm currently is conducting a clinical trial for the test at about 50 sites, targeting a total enrollment of 10,000 patients.

According to Conroy, Cologuard has a potential market of $1.2 billion in the US alone at a market penetration rate of 30 percent, and Exact Sciences is targeting a reimbursement rate of $300 for the test. Along with FDA review, the test also will be reviewed simultaneously by the Centers for Medicare and Medicaid Services for reimbursement, he said.

A prime focus of the trial will be to compare Cologuard's performance with colonoscopies, the current gold standard for colorectal cancer screening. The trial also will compare Cologuard to a fecal immunochemical testing.

Exact Sciences also plans to publish two peer-reviewed articles on the performance of the test in the near term, Conroy said. In the most recent data, Cologuard achieved 98 percent sensitivity, 59 percent sensitivity for pre-cancer, and 91 percent specificity, he said.

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