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SQI Diagnostics Plans New Benchtop System, Assay Design, Printing Services

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By Justin Petrone

Fresh from announcing plans to acquire German array company Scienion, Canada's SQI Diagnostics this week disclosed that it has a number of new offerings in its pipeline, including a benchtop system, array design, and printing services, plus a number of new tests.

The Toronto-based molecular diagnostics firm discussed its product plans in a document released alongside its fiscal third-quarter earnings results, which revealed a 50-percent jump in net loss, largely associated with sales, marketing, and R&D expenses.

In the report, SQI said that it is developing a second-generation diagnostic platform called SqiDlite. Currently, the firm's tests are performed on its SQiDWorks platform, which also comes in a semi-automated version called SqiDMan for lower-throughput users.

Both systems process SQI's QuantiSpot, a 96-well microarray consumable, and can typically process multiplexed assays to quantify serum concentrations of up to 12 individual biomarkers, or qualitatively detect up to 24 biomarkers per patient, according to the company.

By comparison, SQiDlite, which is "based on the same technology and uses many of the same components" as SQiDworks, will be a "fully-automated microarray processing and analytic platform," a "bench-top system able to process multiple sizes of microarray devices from single 8-well strips up to a single 96-well microarray plate," SQI said.

The new platform, a prototype of which SQI previewed at the American Association for Clinical Chemistry Annual Conference in Atlanta in July, is targeted at small- to medium-sized diagnostic customers, the firm said. It did not provide a launch date for the system.

In addition to the new system, SQI plans to introduce services aimed at laboratories and other customers to "leverage our expertise in assay design and microarray printing." It said it hopes to work with customers to move their diagnostic content onto its microarray platforms. Ultimately, such diagnostics could be offered as laboratory-developed tests in a cleared environment, such as a Clinical Laboratory Improvement Amendments-certified facility.

"Our additional services will enable customers to add target biomarkers to an existing panel of biomarkers that they can then offer to their customers, or they may request an entire panel of protein-based biomarkers to be developed into a [research-use] microarray for which they may decide to seek lab developed test regulatory clearance," SQI said.

The document also discussed SQI's plans to achieve regulatory clearance for its tests. The company already markets number of its assays in North America and Europe. In 2009, SQI received US Food and Drug Administration 510(k) clearance to sell its IgXplex RA test, which is designed to help physicians diagnose and monitor patients with rheumatoid arthritis. SQI has held a Health Canada license for the test since 2008.

This year, the company obtained FDA clearance for its IgXPlex celiac qualitative assay, a 4-plex microarray-based assay test for anti-tissue transglutaminase IgG and IgA. The assay is already marketed in Canada and Europe.

SQI said it is moving ahead with plans to obtain clearance for other tests, including those for diagnosing lupus, vasculitis, and inflammatory bowel disease such as Crohn's disease.

"These tests are advancing through the development pipeline with the goal of moving some if not all of [them] into the regulatory filed stage during the remainder of fiscal 2011 and 2012," SQI said in the document.

Of these assays, the vasculitis array is perhaps closest to the clinical market, and the firm said it hopes to complete clinically validating it by the end of the year. SQI also disclosed that to help it develop and validate the test it has worked with researchers at the Hospital Clinic De Barcelona in Spain, the University Hospital Maastricht in the Netherlands, and the University of North Carolina at Chapel Hill.

Specifically, SQI entered into a clinical-validation agreement with UNC's Kidney Center to evaluate its approach for biomarker detection in vasculitis.

"When the validation study is complete, SQI will compile and analyze the data and intends to submit the results to various regulatory authorities including the FDA seeking clearance to market the vasculitis test kits," the firm said in a statement.
SQI's quantitative lupus test panel, meantime, is in the assay-development stage. The firm said it can multiplex up to 16 protein biomarkers, including double-stranded DNA, associated with the disease.

"This is our largest panel to date and management believes that, if approved, it will provide SQI with the only such product in the market," the company said in the document. Management "believes that the successful completion and clearance of the lupus product will be transformative to the company's commercial position."

SQI said it expects to begin clinically validating the product sometime this year, and to "complete regulatory filings shortly thereafter."

The company’s IBD-Crohn's candidate test panel is in the "proof-of-concept stage and is being actively developed with the expectation of being completed and filed for regulatory approvals during calendar 2012," SQI said in the document. The firm disclosed that it is working with the Cleveland Clinic to develop the assay.

In July, SQI announced that it had entered into an agreement to acquire Scienion, a Berlin-based microarray equipment-manufacturing and array print- and development-services company, for $15.6 million in cash and 735,294 common shares of SQI.

In this week's disclosure, the firm noted that the closing of the transaction is "subject to a number of customary closing conditions and regulatory approvals, and is subject to financing." Company officials have previously declined to discuss the deal, citing the firm's pending initial public offering in the US. SQI filed the preliminary prospectus for its IPO last month.

Q3

All of SQI's development projects have caused its net loss to widen during its fiscal third quarter. For the three months ended June 30, the Toronto-based company's loss was C$2.7 million (US$2.8 million) compared to C$1.8 million a year ago.

The firm did not disclose any revenues for the quarter, but acknowledged that its R&D costs in Q3 increased 27 percent to C$1.4 million from C$1.1 million. The firm attributed the rise to "an increased number of assay panels in development and to continued regulatory validation efforts related to the celiac products."

Corporate and general expenses during the period rose 53 percent to C$400,000 from C$262,000 year over year on "higher salary costs, increased personnel, and increased occupancy costs," SQI said. The rise in costs was due to "additional travel and contract resources in sales and marketing" activities and "legal and accounting costs" related to the acquisition of Scienion.

The company ended the third quarter with C$3.8 million in assets, including C$2.2 million in working capital.

SQI officials did not respond to an e-mail seeking comment about the document or SQI's Q3 performance.


Have topics you'd like to see covered in BioArray News? Contact the editor at jpetrone [at] genomeweb [.] com.

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