SAN FRANCISCO – The 42nd annual JP Morgan Healthcare Conference took off here on Monday, bringing together companies, investors, and other industry players.
As in previous years, genomics and molecular diagnostics firms provided an update on their business, with many issuing preliminary financial results for 2023 alongside the meeting, and talked about their outlook for 2024. Below are short summaries of presentations from select companies on Monday.
Bruker reiterated its commitment to what President and CEO Frank Laukien termed the "post-genomic" era, highlighting the company's investment in areas including proteomics, multiomics, and spatial and single-cell biology.
Noting that the company is "on track for three consecutive years of greater than 10 percent organic revenue growth," Laukien suggested that these emerging areas are poised to grow rapidly over the next 10 to 20 years.
"The last 20 years were dominated by genomics," he said. "But proteomics and related fields like glycomics, lipidomics, metabolomics, epiproteomics … is going to be at least equally important as genomic medicine, and in many areas will be able to go far beyond what genomic medicine was able to do."
Commenting on Bruker's investment in proteomics, Laukien noted that the company has now sold more than 800 of its timsTOF mass spectrometers with 100 units installed in the last six months.
He also highlighted the company's move into spatial biology and its Canopy CellScape spatial omics platform as well as its $108 million August acquisition of single-cell biology firm PhenomeX.
Bruker released preliminary Q4 2023 and full-year 2023 financial results during the conference, projecting Q4 revenues greater than $830 million, including organic revenue growth of more than 12 percent. That would beat the consensus Wall Street estimate of $793.2 million.
The company projected full-year 2023 revenues of greater than $2.94 billion, which would beat the consensus Wall Street estimate of $2.90 billion. It said it expects full-year 2023 organic revenue growth of greater than 13 percent year over year.
Laukien also noted that in full-year 2023, Bruker's scientific instruments segment (BSI), saw double-digit organic revenue growth in China, which has been an area of concern for the life science tools business in recent months. He suggested that the company's investments in "post-genomic" tools partially accounted for its relatively robust performance in the country.
"We have the right tools that they want to invest in now," he said. "They have a lot of sequencers, but now they are investing in proteomics. China has enormous ambitions in proteomics that would rival those of the rest of the world if the headlines in their press releases are taken literally."
Last year, China launched the π-HuB Consortium, or Proteomics Navigator of the Human Body. The project is envisioned by its leaders as a 30-year, multibillion RMB effort that aims to map the human proteome. The consortium has purchased a number of timsTOF mass spec systems for its work.
In his conference presentation, Exact Sciences CEO Kevin Conroy touted the potential growth of Cologuard over the next few years, saying that the firm eventually plans to get to about 14 million Cologuard tests performed each year. That figure assumes Cologuard reaches 40 percent market share.
Conroy also mentioned the next-generation version of Cologuard, which is intended to reduce the false-positive rate of the current test. In the presentation of the firm's Blue-C study in October, the next-generation test had a specificity of 91 percent and increased sensitivity for both cancer and advanced precancer, to 94 percent and 43 percent, respectively. That increase in specificity implies up to 30 percent fewer false positives, Conroy said in the firm's third-quarter earnings call in November.
In December, Exact Sciences completed its submission to the US Food and Drug Administration for the next-generation test and expects approval by early 2025, Conroy said on Monday.
Meanwhile, Exact Sciences CFO Jeff Elliott, who announced on Sunday that he was stepping down this year due to personal reasons, said that Cologuard revenues grew 31 percent year over year. He noted that the company has longer-term growth ambitions of more than $7 billion in revenue from Cologuard alone. Conroy added that the firm also intends to grow revenues for the Oncotype DX tests from more than $600 million to more than $1 billion.
Also on Sunday, the company announced preliminary financial results, saying it expects fourth quarter revenue to grow 17 percent year over year to between $645.5 million and $647.5 million, beating analysts' average estimate of $631.5 million.
Everett Cunningham, the company's chief commercial officer, said that the Cologuard growth levers are clear. They include the rescreening of patients, which constitutes 20 percent of Cologuard's volumes, as well as patients aged 45 years old to 49 years old. Growth also would come from greater screening of African American patients and making it easier to order the test by electronically interfacing with customers.
The firm's 2024 focus areas include greater adoption of Cologuard as a first-line screening test and expanding the impact of its Oncotype DX test for breast cancer globally, Conroy said. The company also intends to deepen its relationships with health systems and to launch future tests.
Exact is also opening new markets for Oncotype DX, with Japan a key area of focus and presenting the "largest growth opportunity for Exact Sciences on the oncology side outside of the US," Elliott said.
Lastly, the company is working on its "rich pipeline," Conroy said, which includes the next-generation version of Cologuard, the OncoDetect minimal residual disease test, the Cancerguard multi-cancer screening test, OncoExTra for therapy selection using tissue, and OncoLiquid for therapy selection using blood.
Qiagen provided details on its 2024 growth strategy including its recently announced decision to boost investment in its Qiagen Digital Insights (QDI) bioinformatics business.
CEO and Managing Director Thierry Bernard highlighted planned initiatives including expansion of its liquid biopsy portfolio, US regulatory approval and launch of its QuantiFeron Lyme disease test, new launches and regulatory submissions of tests in its QiaStat-Dx portfolio, and the launch of its QiAcuity Dx digital PCR product in the US and Europe for clinical applications.
Specifically, Bernard said Qiagen aims to launch its first QiAcuity Dx test in oncology in both the US and EU in 2024, as it works to move the platform from the research setting to the clinic. He said that in the roughly 2.5 years since launching the QiAcuity, the company has placed more than 2,000 systems.
Regarding Qiagen's decision to increase its investment in its QDI business, Bernard said this followed unfruitful discussions last year around partnering with outside firms to help grow this business.
"Last year we discussed with the market that we were open to a financial partnership with private equity or financial partners to enhance the development of that business," he said. "But we never reached a satisfactory deal, so we decided to invest organically."
The company has said it aims to launch at least five new products within QDI over the next five years with a focus on omics research. It also plans to expand its artificial intelligence and natural language processing capabilities and develop a new regulatory-compliant secondary analysis solution for rapid next-generation sequencing analysis within clinical labs.
Bernard also offered his view on competitive dynamics within the latent tuberculosis testing space, noting that while certain developments like PerkinElmer's 2021 acquisition of Oxford Immunotec could present competition for Qiagen's QuantiFeron-TB test, the company continues to work to improve the performance and usability of its test. He also suggested that the biggest competitor to QuantiFeron-TB is traditional skin testing, noting that roughly 65 million skin tests are performed annually.
Looking to the future, Bernard said he saw single-digit growth potential for Qiagen's sample prep business, low double-digit growth potential for its QuantiFeron business, and double-digit growth potential for its syndromic testing and digital PCR businesses.
Qiagen announced this week that it plans in 2024 to return roughly $300 million to shareholders via a synthetic share repurchase that combines a direct capital repayment with a reverse stock split.
Also on Monday, the company said that the FDA cleared a test to detect chlamydia and gonorrhea on its NeuMoDx systems.
NeoGenomics Laboratories CEO Chris Smith said the company plans to push ahead with its MolDx submissions for its Radar minimal residual disease (MRD) assay despite a preliminary injunction issued against the company restricting its sales of the test.
The US District Court for the Middle District of North Carolina issued the order at the end of December as part of Natera's ongoing patent infringement lawsuit against NeoGenomics. It bars the company from "making, using, selling, or offering for sale in the US" as well as from promoting or advertising the test, though NeoGenomics may continue offering the assay for existing patients and for clinical trials, research studies, and projects already in process.
NeoGenomics said it plans to appeal the ruling, a position Smith reiterated Monday during the company's presentation, noting that "we feel really good about our legal position," adding that it plans to continue to invest in the assay and take it through the MolDx process.
During Q3 2023, NeoGenomics completed three submissions to MolDx, one for breast cancer, one for lung cancer, and one for head and neck cancer. During Q2 2023, the company received Medicare coverage for use of the Radar test in patients with HR-positive, HER2-negative breast cancer.
Smith said NeoGenomics believes MRD testing is an area of significant opportunity for the company, putting it at a roughly $20 billion market that is only around 5 percent penetrated.
"I think it's important to be there with a sensitive, informed assay," he said, adding that the company currently has 28 studies using the Radar product underway.
Smith highlighted several areas of focus for NeoGenomics in 2024, including increasing test volumes, particularly in the community setting; improving the efficiency of its sales force; and continuing to improve revenue cycle management.
Smith also tackled the question of how the US Food and Drug Administration's plans to regulate laboratory-developed tests might impact NeoGenomics, noting that while the outcome of the FDA's effort remains uncertain, "our view is that [FDA regulation of LDTs] probably ultimately becomes a reality."
In particular, Smith said the company expected that MRD and next-generation-sequencing tests would have to go through the FDA given the complexity of those technologies and said that NeoGenomics is putting such tests under design control.
He added that he saw potential upside to FDA oversight of LDTs "for companies that are in front of this."
He noted, for instance, that one challenge NeoGenomics currently faces is hospitals wanting to internalize NGS testing. He suggested that smaller hospitals in particular might be discouraged from doing this if the FDA begins regulating such tests.
"The companies that move quickly and are prepared are, I think, the ones that are going to come out ahead," he said. "But it is going to be a long time before we see how this shakes out."
Veracyte CEO Marc Stapley further explained the impetus behind the company's purchase of C2i Genomics for up to $95 million, announced on Monday, noting that it enables Veracyte to move into the minimal residual disease (MRD) testing market and to "expand our role across the cancer care continuum."
C2i has developed a platform that uses whole-genome tumor sequencing for MRD testing.
In looking at potential options to enter the MRD market, Veracyte sought a company with a clear path to commercialization in its existing specialty channels, he said. Veracyte has "been thinking about expanding the markets that we're addressing for a number of years," he said, and MRD was a particular area of interest because "we want to be able to take care of the patient during and after treatment." For this deal, "the timing was right," and integrating the acquisition will be a key focus going forward, he added.
Whole-genome sequencing was the best fit for Veracyte's platform, he added, and there are a "number of benefits" that make C2i's technology the best solution, including its small sample requirement and the rapid generation of patient-specific signatures. Veracyte believes the whole-genome approach offers a "path to move from tumor-informed to tumor-naïve [testing] if desired," he added. The firm will begin by focusing on markets where it has a "strong commercial channel and relationships" and build out from there. Although the company intends to develop tests for multiple indications, including urologic and lung cancers, its first indication will be in muscle-invasive bladder cancer, with the first test expected to launch in the first half of 2026.
"With our established urology channel and relationships, we can partner from diagnosis on and benefit from a well-defined path to reimbursement," he said.
Stapley also commented briefly on his thoughts about the US Food and Drug Administration's proposal to regulate laboratory-developed tests, saying that the firm is "poised, prepared, and ready to respond" to any guidelines the FDA enacts. "Given the level of evidence around our tests, I clearly have confidence our test would be able to go through whatever the IVD bar is in the US," he said. Because the firm already abides by CLIA and New York state laboratory requirements, it is ready to meet more stringent requirements, he added.
"We're already held to very high standards in clinical testing, and so I don't really see having to go through the FDA process, whatever it ends up being, as a major milestone for us to have to climb over," he said.
The company also announced preliminary Q4 and full-year 2023 financial results on Monday. Stapley addressed a decline in forecast biopharmaceutical revenues, which are expected to be about 50 percent of 2023 biopharma revenues, noting that the biopharma segment makes up only about 5 percent of total revenues. Veracyte hopes that the difficult macroeconomic environment around biopharma is nearing its end and is continuing to build out its portfolio for that business, he said.
Guardant Health co-CEO Helmy Eltoukhy emphasized the importance of the Guardant360 test to the company, saying that it is the primary driver of volume growth, with 173,000 clinical tests performed in 2023. The company expects the test's average sales price (ASP) to increase by about $200 dollars in Q1 2024 compared to Q3 2023, due to changes in reimbursement from Medicare. The firm has also started to see "faster and better payments" from private payors, such as United Healthcare and Anthem, which may lead to additional upside on the test's ASP, CFO Michael Bell said.
Eltoukhy noted that the firm is on track this year to launch an updated version of Guardant360 using its "smart liquid biopsy" platform, which incorporates genomic and epigenomic biomarkers.
The upgraded version of the test "will help identify more patients for existing therapies that are undetectable by current [comprehensive genomic profiling] tests, identify novel targets for new therapies for biopharma partners, and provide detailed phenotypic information about the tumor, such as histology, subtype, and more," he said.
It also allows for new features to be continually added to the test as they are clinically validated. The company also plans to launch an upgraded and expanded version of its Guardant360 TissueNext test this year, he said.
Eltoukhy noted the importance of the National Comprehensive Cancer Network's updated non-small cell lung cancer testing guidelines released in December. The guidelines now include the use of concurrent testing of tissue and plasma to improve time to test results. Lung cancer "tends to be the lead indication when you think about solid tumors," he said, and the addition of concurrent testing "bodes well for other cancer types." The guidelines are "taking what we think is the right stance in terms of maximizing sensitivity for patients — essentially they recognize that liquid and tissue are both valid means for getting this information," he added.
Guardant Reveal, the company's minimal residual disease test, has already been upgraded to the smart platform and is available for colorectal, breast, and lung cancer testing, with expansions to other tumor types planned for the future.
Beyond its therapy selection assays, co-CEO AmirAli Talasaz provided updates on the company's screening test, Guardant Shield. The firm has an advisory committee panel discussion with the US Food and Drug Administration in March as the next step in the review of its submission for premarket approval for colorectal cancer, he said. After approval, which the company expects this year, Guardant will launch the test, seek Medicare coverage, and hopefully get guideline inclusions in 2025 and 2026.
The firm also plans to expand Shield's indications, working first on lung cancer. It is "continuing to make good progress" on enrollment in its lung cancer screening study and is also developing a multi-cancer early detection indication expansion for the Shield test, he said.
In contrast to many other firms that have been impacted by downturns in the biopharma market, Eltoukhy said that biopharma has been "a really nice area of growth and strength" for Guardant. He also noted that potential collaborations with biopharma companies may expand beyond oncology to other areas of precision medicine.