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MicroGenDx Expanding Hospital Business Following Reimbursement Decision, Publications

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NEW YORK – MicroGen Diagnostics is growing its business for targeted sequencing-based orthopedic and urological infection detection on the heels of new contracts and outcomes studies.

The Lubbock, Texas-based commercial lab has been awarded a national contract with Aetna, effective Aug. 15, for a next-generation sequencing-based assay to detect microbial infections. It previously obtained the Proprietary Laboratory Analyses (PLA) reimbursement code of 0112U from the American Medical Association followed by a reimbursement decision from the Centers for Medicare & Medicaid Services.

"We're the only commercial lab in the nation that actually has a reimbursable code for next-gen sequencing for microbial detection," MicroGen CEO Rick Martin claimed in an interview.

Now, the lab is growing its business. It currently has 50 sales and marketing reps nationwide but will be increasing that number over the coming year, Martin said. It is also considering partnerships with orthopedics-focused companies that have sales teams to help expand its reach with surgeons and other potential customers, he added.

During the pandemic, MicroGen developed a COVID-19 PCR test that led to "a windfall of business" and helped the company reach revenues of approximately $70 million last year. This amounted to more than 10 times its typical annual revenues, Martin said, adding that the firm has processed more than 1 million COVID-19 PCR tests.

But even as the PCR-based COVID testing business recedes, MicroGenDx is now expecting its core NGS testing business to double, anticipating total 2022 revenues in the range of $40 million to $50 million. And, although it derives business from a small fraction of the hospital market currently, it is also preparing for that to expand dramatically, "bringing the technology into many more hospitals" this year, Martin said.

The MicroGen test appears to address a main impediment to sequencing-based infectious disease testing, namely, cost.

The Medicare reimbursement for the microbial NGS test is $355, Martin said.

"The industry is probably not happy with me because they would like this test to be priced a lot higher, and now that we are the first approved code, we become a comparator," he said.

The secret sauce to the low price point is a volume of samples that enables running sequencers six days per week, Martin said. These high volumes in turn have been achieved in part through a strong publication record, as customers have appreciated peer-reviewed validation of the technology.

The firm has now published more than 70 clinical studies of its technology for urological and prosthetic joint infections, Martin said, and following publication online last month of a four-year clinical outcomes study of an assay for prosthetic joint infections, the firm has seen an uptick in contracts with hospital, as well.

Periprosthetic joint infections can be insidious, sometimes caused by anaerobes or bacteria that grow as biofilms and are thus not as freely circulating. "Hospitals are using traditional culture on these patients, and when the cultures are negative, they have no direction," Martin said. This puts patients at high risk for prosthetic failure, which can lead to amputation, sepsis, and even death.

Published in the Journal of Bone and Joint Surgery, the study was performed on more than 1,000 patients across 14 clinical centers. It was a pivotal element in getting the Aetna contract, Martin said.

Interestingly, the JBJS study showed the MicroGen test detected polymicrobial infections in a majority of cases that had shown no organism growth after standard microbial culture.

Karan Goswami, first author on the JBJS study and a researcher at the Rothman Orthopaedic Institute in Philadelphia, said in an email that work marks "the largest cohort reporting the utility of NGS in isolating infective organisms in culture-negative cases."

Goswami said the results were not a total surprise, as prior single-center studies from his group as well as academic groups in the UK and China have corroborated the polymicrobial signal, albeit in smaller patient cohorts of hip, knee, and shoulder infections.

Developers like BioMérieux's BioFire business and OpGen's Curetis subsidiary have created multiplex PCR panel tests for bone and joint infections. But, compared to PCR panel-based methods, sequencing tests have the advantage of being unbiased, Martin said.

"If all infections were caused by 20 bacteria or a couple of fungi, then a panel would be a great tool — the problem is we have already identified in human samples more than 10,000 different species of organisms," Martin said. "There is no PCR panel large enough to be able to capture" that many pathogens.

In its tests, MicroGenDx compares results to a curated library containing the genomes of 50,000 species after amplification of a 16s and 18s ribosomal RNA variable regions to fingerprint bacteria and an ITS variable region for fungi.

Targeted sequencing differs from full metagenomics sequencing and does not itself provide information on resistance genes the microbes may be harboring. So, the firm also runs a PCR assay for genes that can confer resistance to 17 different antibiotic classes, Martin said. "We can do all that very quickly with a PCR test, and then we move the sample to the Illumina MiSeq," he said.

The firm also has a system from Oxford Nanopore Technologies and recently acquired an Illumina NovaSeq as well to enable full metagenomics, Martin said. It also uses the Thermo Fisher Scientific KingFisher instrument for automated extraction and other robotics platforms as well to expedite sample preparation.

Multiplex panel adherents note that PCR tends to be faster and less expensive than sequencing.

"The barrier to [sequencing] technology in the past has always been time and cost. It would take a university lab basically a month to deliver results, which is not clinically useful," Martin said.

But the MicroGen test has a turnaround of 3.5 days, Martin said. This is slower than the few hours required for a multiplex PCR test, but much faster than microbial cultures that can necessitate separate methods and wait times for aerobic and anaerobic bacteria and also for fungi. 

Goswami concurred that the "breadth of discovery power" is a major advantage of sequencing over PCR approaches.

His group is now using NGS results in the setting of culture-negative prosthetic joint infections to guide antimicrobial treatment. The team has also published case reports of patient situations where NGS made "a considerable difference" in antibiotic management and clinical decision making, such as in the case of a spine implant infection and an unusual infective organism typically found in dogs' mouths.

Sequencing naysayers in the prosthetic joint infection detection milieu have also previously pointed to a lack of outcomes studies showing that testing actually impacts morbidity and mortality in any way.

In this vein, MicroGen expects publication in the near future evaluating a test to detect microbes prior to kidney stone surgery.

Urine cultures are used to select prophylactic antibiotics for these common surgeries, but as many as 18 percent of patients still get infections after surgery. "They end up in the intensive care unit with sepsis" and sometimes die, Martin said.

A group at the University of Texas compared this standard of care to MicroGen's technology prior to surgery on 220 patients and found the MicroGen test completely eliminated infections, he said.

"That is the type of outcomes study that the naysayers are looking for," Martin said.

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