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Scientia’s Glorikian Discusses Microarrays, Molecular Dx, the Global Healthcare Market

Name: Harry Glorikian
Title: Managing Partner, Scientia Advisors
Professional background: Prior to joining Scientia, Glorikian held several senior management positions at Applied Biosystems focused on new technology assessment, business development, and product and sales management. He previously served as national sales manager for Signet Laboratories. Glorikian is a co-founder of X-Cell Laboratories, and sits on the boards of GeneNews and Draper Laboratories.
Education: MBA, Boston University; BA, general biology, San Francisco State University.
SAN DIEGO — In a presentation at IBC Life Sciences’ Discovery2Diagnostics conference here last week, life-science consultant Harry Glorikian spoke about the different molecular diagnostics application areas in which microarrays can find work; the key growth drivers and barriers for the array market; and other forces, like government regulations and reimbursements, that impact the push of microarrays into diagnostics .
Glorikian, managing partner of Boston-based life sciences consultancy Scientia Advisors, said that while the molecular diagnostics market is likely to quadruple over the next decade, array-based tests will make up only a sliver of that, with tests related to oncology and infectious diseases leading the way.
Specifically, Glorikian estimated that arrays made up around $160 million, or a little more than 5 percent, of the total $3 billion market for molecular diagnostics in 2007. By 2012, the array portion of the market is projected to grow to $660 million, or around 9 percent of a total molecular diagnostics market expected to be worth around $7 billion by that time.
Glorikian also described how the global market for such tests has emboldened array-based diagnostics companies to abandon their exclusive allegiance to US regulators and begin to look at Europe, India, and China as a way to begin selling their tests and other products.
Additionally, Glorikian discussed the current status of array-based tests in the market, from the performance of Roche’s AmpliChip to the shortcomings of current array platforms and the possibilities for emerging technologies in the clinical market, such as next-generation sequencing.
To learn more about these varying trends, BioArray News spoke with Glorikian following his talk at D2D. Following is an edited transcript of the conversation.

During your presentation you predicted that the global molecular diagnostics market would grow from $3 billion in 2007 to $12 billion in 2017. Where do you get those numbers?
We do a very detailed, bottom-up analysis involving input from different areas. First, we look at the development and adoption of products, assay by assay. As I showed during my presentation, it’s what’s in the manufacturers’ pipelines, what’s being used in Europe, all of those things. We can also understand market share — to know which manufacturer is going to introduce what and when. And then we go out into the field and assess the demand side by speaking with oncologists and infectious disease specialists, lab directors, and so on, about how much they are using, what tests they are using, and how much demand is growing. We do that on a global basis to get these projections and I can tell you that we have been very accurate. We just did a review of our predictions from last year. We were very pleased to see that our forecasts for certain markets and companies were within the margin of error.
How large is your organization?
We have about 30 people right now and we have been growing at about 100 percent per year. Clients have told us they do not get this sort of approach and market knowledge from other firms. Normally, when you hire a consulting company to come in and do strategic work, the people creating the strategies in general do not have experience in the field they are consulting for. Everybody in our place has a science background, a diagnostics background, a life science tools background — we have a pool of people that can walk in the door and start meaningful conversations with clients. We do a lot of analysis up front before we approach clients. We want to come in the door with a body of knowledge from day one rather than learn on your nickel.
That’s my bias, because, after being in the industry for 20 years, I don’t like being paid to learn. That’s not adding value. We don’t want to perpetuate the stereotype of consultants that come in and tell you what time your watch says. If we can come in the door with an understanding of what is going on in the market and the customer says, “Well, we are thinking of coming out with these assays,” or, “This is the market in which we are interested,” then we can have a robust conversation about how they are going to position it. At this point in the debate, the client either validates what they thought or they arrive at a higher strategy level about entering the market.
How well-informed are your clients about what is going on in the market?
Before or after they hire us?
Before they hire you. When you walk through that door, do they know about these other assays? How do they learn about them?
It depends. They usually know some things, but, remember, most companies are worried about next quarter’s numbers. People don’t have the opportunity to step back and see what’s happening in the world. They might get their information through GenomeWeb, but they would still have to be scanning everything.
One thing to keep in mind is that the days of doing things one way are over. There might be five different ways to look at SNPs, or three or four different ways to look at expression data. Everybody thinks their technology is the whiz, bang, killer application. But do they actually go out and talk to the clinician? Is the clinician actually going to use it? Sometimes if you ask a clinician if they’ll buy it, they’ll say yes, but if you press them as to how exactly they’ll use it, often times the market size completely changes.
Back to molecular diagnostics, you said that the impact of arrays on this market was about $160 million last year with a projection of growth to $660 million by 2012. Is that good? What should we expect?
There are still a lot of inhibitors to the use of assays, such as technical hurdles, including sample preparation, lab-to-lab variation, and platform variation. My expectation is that genotyping will have the upper hand for the most part over expression-based tests at this time. Expression is an area where the market needs to have a better understanding of what is happening, and right now things are a moving target. The US Food and Drug Administration is absolutely receptive to this technology, but the FDA being receptive to it and the clinicians accepting it are two different things.
Also, I should say that our projections are not like your typical market report that says that everything is going to be in the billions of dollars. We fundamentally feel that we have to do our own ground-up market research so that we are confident in the advice we give to clients.     
You described the reception of Roche’s AmpliChip [initially launched in 2004 — Ed.] as ‘lukewarm’ during your talk.
The key reason Roche’s AmpliChip CYP450 test had limited acceptance was lack of sufficient evidence for incorporation of the assay into guidelines for clinical practice. All pharmacogenomic tests, especially CYP450, can greatly influence drug metabolism, and are important to individualize patient treatment and determine appropriate drugs and doses to prescribe. Roche obtained FDA approval for the product which ascertained accuracy; however Roche did not conduct any randomized controlled trials to ascertain if the AmpliChip will lower the incidence of adverse reactions. Furthermore, most insurance companies do not cover the cost of the test due to uncertainty of cost benefits. Due to lack of clinical utility evidence and reimbursement, there has been limited acceptance of AmpliChip CYP450.
But, in terms of AmpliChip, what should test developers take home from that story?
Besides regulatory approval, conducting clinical outcome studies to ascertain clinical utility and cost/benefit analyses for insurance coverage are paramount for widespread adoption of a new technology.
Are there any special diagnostics areas where arrays are likely to be the platform of choice?
This will depend on the application. Areas that need multiplexing and low quantitation are highly suitable for arrays. Let us consider oncology; it is a complex disease influenced by the function of multiple genes and pathways; molecular assays for oncology will require multi-dimensional analysis of genetic alterations, pathways, and processes. Applicability of array in oncology will also depend on the care cycle and biomarkers; prognosis is likely to be an area where arrays are likely to have an impact.
What are the current limitations of the array platforms in the market when it comes to diagnostics?
Clinical laboratories usually like sample-in, answer-out. And all of the current systems are not designed with that in mind. Look at real-time PCR and where Cepheid is today. That’s complete walk-away automation: sample-in, answer-out. On an array platform, we are still not there. Another question is how you are doing your sample prep. If one lab does it different than another lab, the answer might be different.       
What’s the global outlook for these kinds of tests? Are array-based diagnostics companies thinking too much about FDA clearance and not enough about other markets?
Let me give you an example. There was a human papillomavirus surface-plasmon resonance-detection array that was just licensed by China Medical Technologies [from Molecular Diagnostic Technologies]. It’s an array platform. It’s SPR, and people are not even using that platform clinically here. And they took that license exclusively for China. Why? First of all, they can probably get it through the regulatory system easier. The barriers to getting people to use it are different. I won’t say they are lower, but they are different. The market needs are different and the price points may be different.
What is happening in these emerging economies is tremendous. The US is still the biggest market, but it doesn’t always mean that it’s the fastest growth market or maybe from a strategic standpoint the best place to enter first. Companies may wish to enter somewhere else and then swing back to the US. It all depends on what you are looking for, how the indication is going to be used, and how it is going to be used. If it is going to take an act of God to clear the FDA, you may want to enter another country first, generate revenue and data, and then take it to the FDA. Or they may choose not to take it through the FDA altogether, and stay out of the country. It’s definitely not one size fits all.
What are your thoughts on using second-gen sequencing as a diagnostic platform?
Sequencers are a standard molecular diagnostic tool in oncology testing; the majority is Sanger sequencers today but next-generation sequencers are starting to penetrate this market. Besides genotyping for pathogen resistance and genetic testing, next-generation sequencers are likely to greatly influence oncology predisposition and pharmacogenomic testing. 
Obviously, regulatory issues and ease of use will play a major role in adoption. For a next-generation sequencer to be a clinical analyzer, it will require re-tooling of the machine and fulfilling FDA guidelines. Celera has already begun development of a next-generation sequencer for in vitro diagnostic applications such as HLA and HIV genotyping.

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