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Increasing Investment in Next-Gen Sequencing, Genomic Health Takes $2.8M Stake in Two Startups

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By Bernadette Toner

Genomic Health officials this week said that the company is continuing its ongoing investment in next-generation sequencing through internal R&D activities as well as outside investments.

During a conference call to discuss Genomic Health's first-quarter earnings this week, CEO Kim Popovits disclosed that the company has invested a total of $2.8 million over the last two quarters in two startups that are developing technology related to next-generation sequencing.

"As part of our strategy to develop future applications for next-generation sequencing, we have to date invested $2.8 million in two early-stage genomics companies — Locus Development and Station X," said Popovits during the call. "Both are intended to complement our internal research and development programs."

The two privately held firms are still in stealth mode. Station X describes itself on its website as "an early-stage company developing software applications for scientists and physicians working with next-generation genome sequence information." The company's founding CEO, Richard Goold, was previously senior vice president at Incyte and the founder and president of Prospect Genomics. Tod Klingler, founder and chief scientific officer, held vice president positions at XDx, Synergenics, and Structural Genomix.

Locus, meantime, describes itself as a startup "developing clinical tools and services that will enable more personalized, predictive, preventative, and cost-effective healthcare." Founding CEO Sean George was previously COO at Navigenics, senior vice president of marketing at Affymetrix, and vice president of Invitrogen's labeling and detection business at Invitrogen; while CSO Michele Cargill served as vice president of genetics at Navigenics, associate director at Affymetrix, and was a senior staff scientist at Celera Diagnostics. The company is seeking staffers in genetics, engineering, bioinformatics, and biotechnology.

Popovits described Genomic Health's interest in the companies as "strategic" investments intended to "augment" the work the company is currently doing in next-generation sequencing.

Genomic Health first signaled last year that it was moving its biomarker discovery programs to next-gen sequencing and more recently said that it plans to eventually move its molecular diagnostics testing platform from quantitative RT-PCR to next-generation sequencing over the next two to four years (IS 2/22/2011).

While officials this week did not provide an updated timeline for when they plan to move the company's tests to a sequencing platform, they reiterated their commitment to the technology.

Randy Scott, Genomic Health's executive chairman, said that the company's investment to date in next-gen sequencing "has been primarily in the 'R' part of R&D," but over time, it expects sequencing to be an "increasing area of research and eventually in development."

Genomic Health's R&D spending for the quarter increased 29 percent, to $10.1 million from $7.8 million in the year-ago period.

While the company has over the last year "moved nearly 100 percent of our research dollars" into next-gen sequencing, research spending comprises "well less than half of our development dollars," he said. The company did not provide a further breakout of its R&D spending.

Genomic Health officials declined to provide much detail on the company's goals for Locus Development and Station X, citing the early stage of both firms' activities. Popovits said that the company's interest in the firms is related to applications for next-gen sequencing "and being able to develop tools that will aid physicians and patients in using the information in clinical practice."

Citing Genomic Health's success in moving RT-PCR into clinical practice as part of the commercialization process for the company's Oncotype Dx breast cancer recurrence test, she said, "We see the same thing coming for next-generation sequencing."

She added that the company's long-term goal for the technology is to "validate the results of next-generation sequencing in large clinical trials in an effort to correlate either gene mutations or expression profiles to clinical outcomes that may provide information to physicians and patients beyond that already available through the use of the Oncotype Dx recurrence score."


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

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