SAN FRANCISCO (GenomeWeb) – The 34th Annual JP Morgan Healthcare Conference began here Monday with several life science research tools and diagnostic firms making presentations to investors and other attendees.
The following are capsules from the presentations and breakout sessions of 23andMe, Myriad Genetics, Genomic Health, and Alere. Coverage of Illumina's presentation is available here.
23andMe President Andy Page told investors that in 2016 the firm would launch additional health reports that have US Food and Drug Administration clearance and would make progress on its recently formed therapeutics group that aims to translate genetic information into the discovery of new drug targets.
Page highlighted progress in the Mountain View, California-based direct-to-consumer company's three core business areas of direct-to-consumer testing, research services, and drug discovery.
Earlier this year, the company received FDA clearance for its Bloom syndrome carrier screening test and it can now report carrier status of 37 conditions to consumers, in addition to its reports on ancestry, wellness, and other traits.
Page said that the firm's experience with bringing the carrier status tests through FDA clearance enabled it to establish a "regulatory pathway for DTC testing" and that he is "confident" that the firm will be "releasing more health reports" in the coming year.
With regards to its therapeutics business unit, Page said that the company has already identified several potential targets, although he did not specify what targets or disease areas. Page added that the firm plans to set up a wet lab in the San Francisco Bay Area this year in order to perform the drug discovery work, which will be supported by the $115 million it raised in a Series E financing round last October. In addition, Page said that 23andMe would be looking to outsource "as much as possible" to bring targets from early- to late-stage development.
One major component of 23andMe's business is the research services it provides to third parties such as academic institutions, biotech, and pharmaceutical companies that leverage its extensive database to ask research questions. Page said that this year, that portion of its business is transitioning from a "fee for service" model to one that is based on royalties. Many of these research efforts are now focused on 23andMe's own therapeutics unit. "We are our own largest customer," Page said.
Myriad CEO Marc Capone focused a significant portion of his talk on the market opportunity for a handful of tests the firm sells.
One of those tests, the Vectra DA test for determining whether rheumatoid arthritis patients are at risk for joint damage, came to the firm through its 2014 acquisition of Crescendo Bioscience. The test generated revenues of $43 million in fiscal year 2015, but Capone said the addressable global market is 3 million patients and represents a $3 billion opportunity. Capone said that 40 percent of rheumatologists in the US order the Vectra DA test but for only 9 percent of eligible patients. The firm plans to target additional rheumatologists and aims to capture more private payors to drive revenue growth for the test. In addition, it inked a deal with Laboratory Corporation of America to offer blood draws for Vectra DA.
Myriad is also working on expanding reimbursement for Prolaris, its genomic test for gauging prostate cancer aggressiveness. Capone said the test has a $1.5 billion addressable market with 500,000 patients globally. In the US, Medicare reimbursement supports a $200 million opportunity, and Capone noted that the firm plans to provide an update on Prolaris reimbursement in February. He said the firm currently has 40 salespeople targeting the urology market, an approximately 9,000-physician population. According to Capone, the firm will need to expand that salesforce by 30 or 40 people over time to fully service that physician market, but the pace of that expansion will be based on its line of sight with reimbursement.
Capone further highlighted the firm's myPath Melanoma test, which he said has an addressable market of 400,000 patients and represents an $800 million market opportunity. That test is still in development but has completed two validation studies.
Capone also reiterated that 80 percent of samples the firm receives for hereditary cancer testing are now orders for its myRisk Hereditary Cancer panel, a 25-gene, next-gen sequencing-based test. And despite competitors entering the market, he said the firm hasn't seen a lot of price erosion, which he attributed to Myriad's lab accuracy, variant classification database, and customer support.
Finally, he said that with the firm's existing tests and ones in the pipeline Myriad believes it can more than double its revenues over the next five years. It reported $723.1 million in revenues for its fiscal year ended June 30, 2015, but Capone said Myriad is targeting revenues of $1.5 billion in FY 2020.
Kim Popovits, chairman, president, and CEO of Genomic Health, discussed the firm's upcoming launch of a liquid biopsy platform. Unveiled on Monday as Oncotype SEQ, the blood-based mutation panel uses next-generation sequencing to identify certain actionable genomic alterations for the treatment of patients with late-stage lung, breast, colon, melanoma, ovarian, or gastrointestinal cancer. It is part of a portfolio of products Genomic Health plans to offer under its new Oncotype IQ Genomic Intelligence Platform. Under that umbrella, the firm plans to offer a variety of tests for tumor typing and tumor monitoring.
Genomic Health is planning a mid-2016 launch for Oncotype SEQ, Popovits said, noting that it will contain a finite number of markers that will provide actionable information based on available drugs targeted to specific cancers. The new platform will target more than 350,000 patients in the US with late-stage disease.
The firm also has plans to launch a platform called Oncotype Track, which will be used specifically to monitor disease burden and patient response to therapy.
Popovits noted that the firm is targeting 12 percent to 17 percent top-line growth in FY 2016. It believes it can achieve that goal through a number of initiatives including increasing reimbursement for its prostate cancer test and gaining greater market penetration for its Oncotype DX test for breast cancer in markets outside of the US, particularly the UK, Germany, and Japan.
Alere CEO Namal Nawana provided an overview of the firm's diagnostics business including its molecular platforms, the Alere i and Alere q. The firm has CLIA-waived tests for the Alere i for influenza A&B and strep A, which he said will help drive organic revenue growth going forward. Nawana said Alere's respiratory syncytial virus assay for the platform is currently in clinical trials and on schedule in its development. He also noted the firm's HIV test for the pediatric population that it launched last March outside of the US on the Alere q multiplex, point-of-care platform. He said Alere is planning an expanded menu for the platform, but didn't provide details during the firm's presentation or Q&A session.
Company officials told investors that the firm has cut its expected Q4 revenues to around $630 million from its previous guidance of $640 million to $660 million. They cited three factors that will cause the firm to report revenues that are lower than previously expected: $12 million in negative currency effects, $5 million from closing the divestiture of BBI earlier than expected, and $9 million attributed to a light flu season in North America thus far.
However, they pointed out during the firm's breakout session that the Africa and Asia end markets, which both had a difficult third quarter for Alere from a revenue standpoint, had a "fantastic quarter" in Q4, though they didn't elaborate.