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Final Day of JP Morgan Conference: Affymetrix, Celera, Cepheid, Complete Genomics, RainDance

By Edward Winnick

SAN FRANCISCO (GenomeWeb News) – On the final day of the JP Morgan Healthcare Conference, several molecular tools and diagnostics vendors revealed their plans for 2011.

Among the firms that presented, Affymetrix talked about the firm's efforts in cytogenetics, Celera talked about its assay pipeline and search for a partner, and Complete Genomics said it is about to introduce a new technology that will make its sequencing more accurate while lowering cost.

Below are capsules from the fourth day of the conference.

Affymetrix

Affymetrix officials Thursday morning briefed investors on the firm's plans to expand its market share in the diagnostics markets. Kevin King, CEO of the firm, said that Affy is looking to place a greater number of its tools for validation and testing applications.

Currently, about 20 percent of its sales come from these applications, but King said the firm would like to increase that number to around 45 percent over the next few years. Growth in that area would lower the proportion of sales the firm makes for discovery and exploration, continuing Affy's push into downstream markets.

Affy has its eye on expanding in clinical markets, and King said the firm's approach is two-pronged: pushing more of its tools into the existing cytogenetics market with perinatal and cancer testing products, and partnering with other firms under its Powered by Affymetrix program to reach new cancer markets.

He said the existing market in cytogenetics is a $2 billion opportunity and is growing at a rate of 17 percent. He added that the firm could offer copy number, genotyping, and somatic mutation tools and believes arrays are preferred to karotyping for this market.

Affy also plans to take its OncoScan service, which is currently being used for companion diagnostic research, and pursue a product based on that, the OncoScan FFPE Express Array.

King said during the firm's breakout session that Affy has talked with FDA regarding a perinatal test, but he could not provide a timeline for a filing or estimate for commercialization.

In addition, he said the firm's Quantigene assay is a key part of its diagnostic plans. The assay, which is based on technology gained through Affy's 2008 acquisition of Panomics, combines anatomic pathology with biomarker measurements.

King said the firm intends to get into specific clinical markets in cancer over time and that it intends to collaborate with academic partners on discovering signatures that can be used in the assays.

While the topic of sequencing-based diagnostics has been a hot topic this week at the JP Morgan Conference, King reiterated earlier statements he had made that sequencing will not be a better option than arrays for diagnostic applications. He said sequencing technologies thus far have not proved reliable enough and do not provide enough coverage -- both of which he says are barriers to widespread adoption.

Celera

Celera is on the prowl for partnerships that will expand the user base of its tests, which it believes are not reaching enough doctors. Celera CEO Kathy Ordoñez told investors that the firm began a search for a partner in March, but there is no timeline set for inking a deal. She said she wants to do what's right for shareholders and the company, and there is a possibility that such a deal may not materialize, or conversely it could happen quickly.

The firm, however, has no plans of using some of its more than $300 million in cash for an acquisition. She said that it wouldn't make sense for Celera to seek such a deal while it is "processing opportunities for partnerships."

Asked during a breakout session if all options were on the table, from a distribution deal to potentially being acquired, Ordoñez said "all alternatives" are being considered.

The firm is coming off of a difficult year, having lost some of the sales force of its Berkeley HeartLab business to a competitor -- which resulted in a lawsuit that was ultimately settled -- and the recent announcement of cost-cutting measures as its Q3 revenues slumped 16 percent year over year.

But the firm also cited progress in its pipeline of assays that it believes will drive significant growth. The problem remains getting those tests into the hands of the right doctors. Though it has 43 sales reps, Ordoñez said the firm has only penetrated about 3 percent of the physicians who "would benefit from the Berkeley paradigm."

Among the products being developed are a respiratory virus panel, which will run on a Luminex platform and be distributed by Qiagen; a stroke assay that will be launched in the second half of this year; and a lung cancer immunoassay that has nine markers. Ordoñez said that Celera is seeking a partner for the lung cancer test that already has an immunoassay platform on the market.

Longer-term, she said the firm recently identified a variant associated with deep vein thrombosis for which it intends to develop an assay.

Cepheid

Cepheid CFO Andrew Miller said that his firm is looking to expand beyond its entrenched position in the hospital-acquired infections testing market with a pipeline of assays for a variety of conditions. The first of these will be a set of multiplex assays focused on women's health and include tests for human papillomavirus, vaginitis, and trichomonas. The next wave will include virology assays for HIV and hepatitis C, followed by assays for lung and bladder cancer.

Miller pointed out that unlike many competitors in the molecular diagnostics space, Cepheid offers the advantage of providing tests that run on one platform no matter the level of multiplex. For example, customers can run the firm's tests on its high-plex Infinity 48 system or its low-plex GX 1. He said this "offers tremendous flexibility" across all labs.

Miller also said that because Cepheid uses nested PCR, its assays provide greater accuracy than some other players in the molecular diagnostics industry.

Complete Genomics

Complete Genomics, which went public in the US through a roughly $54 million IPO in November, is planning to launch a "long fragment read" technology that will allow it to distinguish between maternal and paternal chromosomes. According to CEO Cliff Reid, the technology will make it possible to distinguish whether a gene with several mutations has them all in one copy or in both copies.

An important part of the new technology is that it will increase the accuracy from 99.999 percent to 99.99999 percent, which Reid said will make clinical grade genomes for the first time. It also will lower the cost of sequencing.

Another effort Complete Genomics will take on in 2011 is reducing the turnaround time of its sequencing services. Reid said that its current turnaround time of 83 days will be reduced to 60 days by the end of the year. He said this will be accomplished by taking out some operational inefficiencies. In addition, the firm currently conducts QC at every step of the process, which slows down the sequencing.

But Reid said as the processes mature, Complete Genomics will be able to take out those QC steps, and some time next year turnaround time will be cut to a few weeks.

Complete Genomics also expects to double or triple its sequencing capacity this year from 400 human genomes per month to between 800 and 1,200 genomes per month by the end of the year. Reid noted that the firm's order backlog currently sits at 1,000 genomes, and that does not include an order from the National Cancer Institute for 1,128 genomes.

Reid said Complete Genomics will report fourth-quarter revenues of around $8 million to $9 million.

Looking forward, Complete Genomics has plans to open at least a couple more facilities to add capacity and serve customers more efficiently in foreign markets. Reid said the firm plans on establishing an Asian sequencing facility and may look to foreign governments as partners. It also will likely open a Western Europe facility to serve customers on the continent as well as provide a backup if there were problems at the California facility.

Like the other sequencing technologies firms that presented at JP Morgan this week, Complete Genomics expects its technologies to be applied to diagnostics eventually. The increased accuracy offered by the new long fragment read technology will make this possible.

Reid said that cancer pathology will be the first diagnostics target. He said that eventually all tumors will be sequenced once the price has dropped to about $2,000 to $3,000 per sample.

In addition, he said he expects Complete Genomics' sequencing technology to be used by biopharma firms in clinical trials, though he declined to provide a timeline. For that to happen, the cost will probably need to be around $2,000

RainDance Technologies

RainDance President and CEO Roopom Banerjee told investors Thursday that the firm will move into the digital PCR space later this year, providing a high-resolution, cost-effective alternative to sequencing. It will provide digital quantitation and high multiplexing, while being more accurate than qPCR, said Banerjee. The technology will offer more than one million data points per sample and will target applications including infectious diseases, immune monitoring, and genetic screening.

Also on tap for RainDance this year is its DeepSeq Cancer FFPE Solution. That product will be introduced in a few weeks. It will have 500 amplicons and provide 50,000 times coverage.

In addition, new research panels will be introduced for autism spectrum disorders, X-linked disorders, and ADME screening.

Down the road, RainDance plans to offer a product for single cell analysis. Banerjee said the system will have a throughput of 10 million cells per hour and 98 percent sorting accuracy.

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