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Following Ariosa Acquisition, Roche Plans IVD Kit for NIPT, Other Cell-free DNA Tests


NEW YORK (GenomeWeb) — After acquiring Ariosa Diagnostics, a deal announced today, Roche plans to continue to offer the company's non-invasive prenatal test as a laboratory-developed assay while working on an in vitro diagnostic test kit.

Longer term, Roche plans to develop diagnostic tests that use Ariosa's cell-free DNA analysis technology for other disease areas, such as cancer and transplant medicine. In addition, it intends to offer a version of Ariosa's NIPT, called Harmony Prenatal Test, on a sequencing platform of its own.

Roche expects the acquisition of Ariosa, which is based in San Jose, Calif., to close this month. The company did not reveal the purchase price at this time, but it will be available in Roche's next annual report.

The acquisition provides Roche with an immediate entry into the NIPT market. "We see this market to be a very important one," said Dan Zabrowski, head of Roche Tissue Diagnostics and Roche Sequencing Unit. Ariosa also gives Roche access to cell-free DNA technology and related expertise.

"We liked their focus to make NIPT screening more affordable for a broader number of women, not just women with high-risk pregnancies," he said. "A partnership with Roche gives them the competitive advantage of our experience in bringing technology into the clinical diagnostics space, as well as our broad commercial reach in clinical diagnostics."

Ariosa has been offering the Harmony test, which gauges the risk of trisomies 21, 18, and 13 as well as sex chromosome abnormalities from circulating fetal and maternal cell-free DNA in the mother's blood, starting at 10 weeks of pregnancy, since 2012. Unlike some other NIPT that analyze total DNA, Ariosa's test uses a targeted approach that focuses on DNA from the chromosomes of interest.

At the moment, the Harmony test is covered by some US insurance carriers for high-risk pregnancies. Ariosa has contracted with some payers as an in-network provider at a contracted rate of $795 per test and expects to have 125 million lives covered at the end of the year. "Our goal is to engage with payers to expand coverage to the general pregnancy population," Ken Song, the company's CEO, told GenomeWeb.

In the first quarter of this year, Ariosa had $19.5 million in revenues, and as of May, the company had conducted 225,000 Harmony tests worldwide, offering it in more than 90 countries. In the US, its main competitors are Sequenom, Illumina, Natera, and, most recently, LabCorp's Integrated Genetics.

The market size for NIPT has been estimated by others to be at least $1 billion for high-risk pregnancies, and up to about $6 billion for average-risk pregnancies.

All Harmony tests are currently performed in Ariosa's CLIA laboratory, and will continue to be run from there following the acquisition. However, Roche eventually plans to develop the test into an IVD kit. "It is necessary to purchase a laboratory so that we can continue to provide and expand access to Ariosa's NIPT testing services while we transition to a business model where we provide NIPT kits for our customers," Zabrowski said. "It is not our strategy to purchase additional CLIA laboratories for this application."

Following the acquisition, "we plan to work within each country locally to review the best model for distribution and will be looking for potential relationships in order for local laboratories to conduct the NIPT assay," he said, adding that Roche will comply with each country's regulatory guidelines.

The plan is to work with regulatory authorities in various markets, including the US, Europe, and China, to make Harmony available locally.

At the moment, the Harmony test runs on sequencing equipment from Illumina, a NIPT competitor, but Ariosa said recently that it has developed a microarray-based method to carry out the test and struck a multi-year supply agreement with Affymetrix for arrays and instruments this fall. The array test allows for shorter turnaround times and lower costs.

Song told GenomeWeb that Ariosa has completed the necessary validation of the array-based test to comply with regulatory guidelines and is currently completing the transition to the array platform.

Zabrowski said Roche supports the switch to arrays but also plans to launch a version of Harmony on a sequencing platform of its own in the future. Right now, he said, Roche is considering the Genia technology for such a platform, "but we will continue to see how the science evolves and place the test on the most appropriate sequencing system that we can find." Roche acquired Genia, a single-molecule nanopore sequencing company, earlier this year.

Offering the Harmony test on both a microarray and a sequencing platform could have advantages for different customer types "that may be better served by having the test on one platform or the other," he said.

It could also enable Roche to add content to the Harmony test. While some other NIPT providers, such as Natera and Sequenom, have added microdeletions as options to their tests, for example, Ariosa has not done so.

Following the acquisition, "we're going to develop an overall strategy in terms of NIPT expansion as well as expansion of cell-free DNA technology into other disease areas," Zabrowski said, for example, in the areas of cancer and transplantation, where data from Roche and others has shown that "cell-free DNA technology would have a significant role to play."

Like Genia, Roche plans to operate Ariosa as a standalone unit and retain the company's staff and management team, a total of about 200 employees.

Ariosa is currently embroiled in a number of patent infringement lawsuits, including with Sequenom, Illumina, and Illumina's Verinata Health business, and Roche will continue to defend the company in court, Zabrowski said, adding that Roche "went into this agreement with our eyes wide open."

Ariosa was originally founded as Tandem Diagnostics before it changed its name to Aria Diagnostics, then Ariosa Diagnostics.

In early 2012, the firm raised $52.7 million in a Series C financing round that included investors Venrock, Domain Associates, Meritech Capital Partners, and an undisclosed mutual fund group. Earlier this year, Ariosa filed for an initial public offering, which it priced at $16 to $18 per share for a total of $52.3 million in net proceeds at the midpoint price.