This story originally appeared in Biocommerce Week, a newsletter that has been discontinued.
Luminex plans to launch a next-generation multiplex instrument next year that will be able to process more analytes and produce results twice as fast as its current Luminex 200 instrument, company officials said during the firm’s annual investors meeting in New York last week.
The next-generation instrument is Luminex’s highest R&D priority and is expected to help the firm gain traction in the molecular diagnostics market, said Pat Balthrop, president and CEO of Luminex. The new instrument, called NextGen by the firm until it finalizes a name in May, is not expected to impact sales of Luminex’s current multiplexing instrument, he noted.
Shortly after launching the NextGen instrument, Luminex plans to debut its BeadPix instrument, a low-cost option based on the firm’s xMAP technology and designed for smaller labs. That instrument is in the early stages of development, company officials said.
Luminex officials also said during the meeting that they hope the US Food and Drug Administration will next year clear the firm’s pharmacogenetic-based dosing test for monitoring the anticoagulant warfarin.
“A little bit further out on our product and technology roadmap is our NextGen instrument — a total system solution with new user-demanded features, including multiplexing up to 500 analytes, increased throughput, and improved analytical performance,” John Carrano, vice president of research and development, said at the meeting.
He said the new instrument is currently undergoing extensive testing, and is being developed with the molecular diagnostics market specifically in mind. Company officials said that they have not yet established pricing for the next-generation instrument but it will probably be incrementally more expensive than its current Luminex 200 systems, which the firm’s partners sell to customers for around $40,000 to $45,000.
“Although we do see challengers emerging in the area of multiplexing, the fact is that our NextGen instrument with its 500-plex capability and high throughput will help us maintain a market leadership position,” said Carrano.
He also said the firm is developing a smaller and lower-cost multiplex platform.
“The BeadPix is based on a new detection scheme utilizing inexpensive but highly reliable components, such as commonplace LEDs and CCD imagers,” said Carrano. “In doing this, [we can] now offer xMAP-quality performance in a much smaller, lighter, and lower-cost instrument.”
He said that the BeadPix is in the early stages of development but has already demonstrated “excellent” empirical performance.
“Our initial focus for this product is on new and emerging markets for Luminex, with a particular emphasis on smaller, academic research labs, where low cost and small form factor are particularly critical,” said Carrano. “Moreover, as part of our product portfolio strategy, we also see future variants of the underlying BeadPix technology as an excellent opportunity for Luminex to take advantage of the trend in the marketplace toward decentralization.”
Carrano also noted that the firm is developing a biosensor product for the US Department of Defense that will be able to run the xMAP technology on a chip that is roughly the size of a quarter. Development of the product is being sponsored by the Defense Advanced Research Products Agency.
MDx Assays on the Horizon
Luminex completed its $44 million acquisition of Tm Bioscience on March 1 and immediately renamed the business Luminex Molecular Diagnostics (LMD) (see BioCommerce Week 3/14/2007). The unit will continue to operate separately at its facilities in Toronto.
LMD has its own portfolio of molecular diagnostic tests that could provide direct competition for Luminex’s partners who are developing multiplex molecular diagnostic tests based on the firm’s xMAP platform. But reiterating comments he made at the JP Morgan Healthcare Conference in January, Balthrop said Luminex remains committed to the partnership model upon which the firm built its business.
He also said the firm’s new strategy of partnering along with sales of its own diagnostic kits would enable Luminex to continue bringing in a steady stream of royalty revenue, while greatly increasing its revenue and gross profits from selling its own kits. Balthrop also expects the firm to benefit from a January pact with Thermo Fisher Scientific unit Fisher HealthCare, under which Fisher will distribute LMD’s tests.
LMD already sells a cystic fibrosis molecular diagnostic panel that has been cleared by both the US Food and Drug Administration and European regulatory authorities. In addition, it has submitted a respiratory virus panel to the FDA, which it expects to launch within the next few months, Jeremy Bridge-Cook, vice president of LMD, said during the meeting.
Luminex also expects the FDA to clear its warfarin pharmacogenetic assay in 2008. The test would be its second PGx product. The firm also sells five CYP450 assays as analyte-specific reagents that it plans to file for regulatory approval.
Bridge-Cook said the respiratory virus panel targets a $160 million market, while the firm’s warfarin pharmacogenetic assay will target a market estimated at more than $100 million annually.
Just prior to the merger agreement, Tm had announced a collaboration to supply Medco Health Solutions and Mayo Collaborative Services with its Tag-It reagents for P450-2C9 and VKORC1 for a joint clinical study of warfarin patients. The partners hope to complete the study by the end of this year.
“Our initial focus for this product is on new and emerging markets for Luminex, with a particular emphasis on smaller, academic research labs, where low cost and small form factor are particularly critical.”
Upon FDA clearance, LMD’s warfarin assay will likely face competition from a similar assay developed by AutoGenomics, which filed for FDA approval in December.
Meanwhile, LMD rival Third Wave Technologies said a year ago that it expected to bring a warfarin test to market by the end of 2006, pending FDA approval. The firm did not follow through on those plans, and company officials did not return a request for comment by press time.
For over a year now, the industry has been expecting the FDA to require warfarin manufacturers to update the drug’s label to reflect the ability of genetic tests to guide dosing. Though the agency has yet to make such a change, Balthrop said it is expected to happen soon.
Balthrop also said during the Q&A session that he believes Luminex will have an advantage over other competitors selling warfarin assays due to the xMAP’s multiplexing capability.
In addition to these new assays, Bridge-Cook said that LMD is evaluating whether or not to develop tests for methicillin-resistant Staphylococcus aureus and other antibiotic-resistance assays. He said the firm’s primary concern for those specific tests is intellectual property issues. He did not elaborate.
Luminex officials reiterated during the investor meeting that they expect the acquisition of Tm to drive greater use of Luminex’s instruments.
Luminex recently reported full-year 2006 revenue of $53 million, a 25 percent increase over revenue of $42.3 million in 2005 (see BioCommerce Week 2/14/2007). The firm sold 718 Luminex systems during the year, which brought in revenue of around $20.6 million.
In a research note published the evening before Luminex’s investor meeting, Leerink Swann analyst John Sullivan lowered his 2007 profit expectations for the company to $.03 per share from earlier forecasts of $.21 per share. He also lowered his 2008 estimate to $.34 per share from $.56 per share. He said that although the acquisition of Tm would make Luminex more valuable and would increase Luminex’s sales, the acquired company would continue to experience losses for several quarters.
Sullivan said he expects Luminex’s earnings to improve in 2009 and maintained his “outperform” rating on the stock.
Although Luminex does not provide specific revenue and profit guidance, Balthrop agreed with Sullivan that the acquisition would be “dilutive in the short-term, certainly through 2007.”
Luminex’s shares fell 2.3 percent for the five-day trading period ended Tuesday to close at $13.90.