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Qiagen Developing Next-Gen Molecular Tests To Capitalize on Untapped HPV Test Market

This story originally appeared in Biocommerce Week, a newsletter that has been discontinued.
 
In the wake of its $1.6 billion acquisition of Digene, Qiagen CEO Peer Schatz said this week that the firm is working on a next-generation human papillomavirus molecular test to complement the one it already sells as well as an HPV test developed specifically for emerging markets.
 
Qiagen believes Digene’s HPV test has massive growth potential, and the firm has 80 sales people selling the test specifically to OB/GYN specialists.
 
Qiagen has rapidly built its molecular diagnostics portfolio, which now brings in nearly $400 million in annual revenue, over the past few years through internal efforts and several acquisitions of smaller firms. The company — which currently derives 48 percent of its sales from the nearly $3 billion molecular diagnostics market — estimates that market will grow 20 percent annually over the next several years.
 
The July acquisition of Digene, however, provided Qiagen with the only HPV molecular test cleared for marketing in the US and boosted the number of its sales people focused on molecular diagnostics to more than 250 (see BioCommerce Week 6/6/2007).
 
Schatz told attendees of the UBS Global Life Sciences Conference in New York that the molecular diagnostics market will experience “explosive growth over the next 10 to 20 years.” He predicted the market will grow at a rate of around 20 percent annually over the next several years.
 
Schatz noted that HPV testing worldwide has been “extremely limited” thus far, and the $1 billion HPV testing market has been largely untapped. Having the only FDA-cleared HPV test gives the firm a big advantage in the marketplace, and Qiagen is hoping that the sales force it acquired along with Digene as well as sales and marketing campaigns will help drive rapid revenue growth for the test.
 
The HPV test, which was Digene’s primary product before the acquisition, pushed Digene’s sales up 31 percent in the second quarter to $57 million. Combined with Qiagen’s 19 percent revenue growth to $135 million in the second quarter, the two firms’ pro forma revenue growth was 22 percent for the quarter.
 
Schatz said the “integration with Digene is timely,” and speculated that the “days are over” of a firm building its business solely around an HPV assay. He said the market is “attracting a lot of people” but makes sense only as part of a broad portfolio of complementary assays, which Qiagen believes it offers.
 
One of the key reasons Qiagen bought Digene was to provide a bridge between its current portfolio of infectious disease assays with oncology, an area which Schatz called “clearly the next wave of diagnostics.”
 
He said HPV will be “the most important target in molecular testing over the next 10 years,” adding that Qiagen welcomes competition from the variety of companies that are already developing or hope to soon launch their own HPV tests.
 
One of those firms is Third Wave Technologies, which plans to submit its HPV molecular diagnostic to the US Food and Drug Administration soon, possibly in the fourth quarter of this year. Digene and Third Wave sued each other earlier this year over HPV testing patents exclusively licensed to Digene (see BioCommerce Week 4/11/2007).
 
Schatz declined to comment this week on the ongoing litigation this week. However, he said the barriers to entry for an HPV molecular test extend far beyond IP issues. He said factors such as test validation, regulatory hurdles, and having a large database of HPV patients to back up claims that the test works are all important.
 
Another potential competitor in this market for Qiagen is Cepheid, which has stated its goal to get into the HPV testing market several times over the past year. This week, Cepheid exclusively licensed HPV patents from Swedish company Quantovir to develop a PCR-based diagnostic test that will predict a woman’s risk for developing cervical cancer by measuring HPV viral load (see related article).
 
But according to Schatz, research has shown that using “viral load in HPV [testing] is not very prognostic … [and] not very promising.”
 
Next-Gen HPV Tests
 
While Qiagen’s currently marketed HPV test is a screening tool, the company is developing two newer versions.
 
The first is a multiplex test that has been fast tracked in development, said Schatz. The assay will be branded a QiaPlex test and will be based on the multiplex technology Qiagen gained when it acquired Genaco nearly a year ago for up to $40 million (see BioCommerce Week 11/1/2006).
 

HPV will be “the most important target in molecular testing over the next 10 years.”

That acquisition brought Qiagen 11 test panels for respiratory, hospital-acquired, and bacterial infections, among other conditions, which are currently sold for research use only. Since then, Qiagen has been finishing clinical studies on Genaco’s H5N1 avian flu assay, for which it intends to seek FDA clearance.
 
In addition to the multiplex test, Qiagen also is developing the FastHPV test specifically for the developing world and remote regions. The test is being developed with support from the Bill and Melinda Gates Foundation and the nonprofit healthcare organization PATH, Schatz said. The test will be able to run without electricity or running water, he said, making it ideal for remote locations in developing countries where a lack of power or water may be an issue.
 
A Qiagen spokesperson told BioCommerce Week that FastHPV is “a high-tech product that’s been appropriately adapted to be decidedly low tech in terms of ease of use and resource needed.” She said the FastHPV test requires more manual steps to set up and run, basically undoing the automation that is preferred by labs in the Western world, and provides results in about two and a half hours.
 
Schatz said such a test also is ideal for countries that do not have the infrastructure in place for Pap testing.
 
The spokesperson said that the firm cannot give an estimated time for commercialization of the product, but it hopes to file for regulatory clearance in 2008.
 
Other Growth Drivers
 
In addition to the molecular diagnostic market, Schatz also said the firm is addressing three primary markets: life science research, applied testing, and pharma monitoring.
 
Life science research has been the traditional customer base for Qiagen’s products. Schatz said that the market for the firm’s products in this space is roughly $1 billion. Qiagen currently derives 27 percent of its revenues from sales to the life science research market, and Schatz said the firm will continue to focus selling to those customers.
 
The applied testing market is comprised of applications in forensics, veterinary testing, food and water testing, and environmental monitoring products. Schatz estimated this is a roughly $500 million market right now and accounts for 8 percent of Qiagen’s sales.
 
The pharma monitoring market is one the firm has rarely mentioned in the past but played a prominent role in Schatz’s presentation. He said Qiagen is “well placed” in this $1 billion-plus market and currently brings in 17 percent of its revenue from drug-monitoring applications.
 
For example, he said Merck used Qiagen’s HPV assays in its HPV vaccine studies. Schatz said that’s one of many such collaborations, but Qiagen rarely discloses them at the request of its pharma partners.
 
Schatz said all of these markets represent a continuum, with academia being an important content generator in the life science research field. He said such discoveries are then used by Qiagen in developing pharma monitoring assays, molecular diagnostics, and other assays for the applied markets.

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