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JP Morgan Healthcare Conference, Day Three: Foundation Medicine, Luminex, PerkinElmer, Danaher, Quidel, Ariosa, BioFire, Atossa, Exact Sciences

This story has been updated from a previous version to clarify Exact Sciences' FDA submission timeline.

SAN FRANCISCO (GenomeWeb News) – The third day of this year's JP Morgan Healthcare Conference featured presentations from a number of molecular diagnostics and life science tool companies covered by GenomeWeb Daily News.

Yesterday, GenomeWeb Daily News reported separately on a presentation from Sequenom, in which officials discussed the company's 2013 goals.

Below are summaries of other presentations from Wednesday.

Foundation Medicine

President and CEO Michael Pellini said that the firm is developing online apps with oncologists that will enable them to track patients and their tumor response, outcomes, and therapy selection. He said the company is getting help from Google, which is an investor in Foundation through its venture arm, in that initiative.

Foundation also has plans to launch this year an online portal to match patients with clinical trials, he said.

The firm markets the FoundationOne genomic test, a pan-cancer diagnostic tool that identifies oncogenic alterations in tumors and is intended to help physicians match patients with the appropriate therapies and clinical studies.

The privately held company announced earlier this week that it had raised an additional $13.5 million in its Series B round of financing, bringing the total raised in that round to $56 million. Among the new investors in the firm is Microsoft co-founder Bill Gates. Foundation plans to use those funds to ramp up its commercial operations and marketing infrastructure, expand its market penetration, and develop new products and partnerships.

Pellini noted that thus far 700 oncologists in 21 countries have ordered the test, even though Foundation has only four sales reps, and it has partnerships with 14 pharmaceutical firms that are using the test in drug development efforts.

He didn't discuss revenue figures but said that the addressable market for the test is around $2.8 billion.

Luminex

President and CEO Patrick Balthrop discussed the firm's decision to begin offering its molecular diagnostic products directly rather than through distributors. That plan was announced last month and became effective on Jan. 1, but Balthrop said Luminex had been planning the switch since 2009. He said the company had structured its contracts with distributors, such as Abbott and Thermo Fisher, to expire at the same time and had worked with these partners over time to ease the transition for customers.

The move to a direct sales model will improve Luminex's profitability while the firm only has to make a modest investment in the effort, said Balthrop. He noted that about 25 percent of the company's MDx sales are derived through its distribution deals, representing about 10 percent of total sales.

Balthrop also discussed upcoming product launches, including an expected first-half 2013 FDA clearance for the company's gastrointestinal pathogen panel. He said this test will address a $150 million market. In addition, Luminex hopes to obtain US marketing clearance for its NeoPlex 4 newborn screening assay.

The firm also is continuing development of Project Aries, a new multiplex platform that will combine the technologies it gained when it acquired GenturaDx and EraGen. Gentura was developing a system called the IDbox that performed low-plex, real-time PCR tests on a single-use cassette. That technology is being combined with EraGen's MultiCode chemistry.

Luminex intends to launch the Aries system, which will enable customers to develop their own MDx tests on the platform, in 2014. It has yet to disclose the menu for the system, but Balthrop said Luminex will disclose some of that content in the coming months.

PerkinElmer

Chairman and CEO Robert Friel discussed how gaining US marketing rights to Verinata Health's Verifi prenatal test will enable PerkinElmer to offer complementary products to its existing Signature Genomics prenatal arrays and first trimester screening tools from its NTD Labs business. PerkinElmer has prenatal test contracts covering 160 million lives, so the deal will likely benefit Illumina, who inked a deal this week to acquire Verinata for up to $450 million. It also provides PerkinElmer an opportunity to enter the non-invasive prenatal test market without having to acquire a technology or firm or develop its own test.

Kevin Hrusovsky, president of Life Sciences and Technology for PerkinElmer, told GenomeWeb Daily News that the reason the firm partnered with Verinata rather than one of the other firms in the burgeoning NIPT market was the ability of Verinata's test to evaluate sex chromosome aneuploidies, a current advantage over the other tests (though Sequenom has said it will add this feature to its MaterniT21 test this year).

In addition, he cited PerkinElmer's belief in the underlying IP for Verifi — a similar rationale Illumina gave for its pending acquisition of Verinata.

Though PerkinElmer officials did not discuss their fourth-quarter results, Friel noted that he expects the company to continue to grow at a compounded annual growth rate of 8 percent, which would drive its revenues up to $3.1 billion in 2017. It expects to report 2012 revenues of around $2.1 billion.

Danaher

In advance of President and CEO Lawrence Culp's presentation on Wednesday, the Washington-based conglomerate announced late Tuesday that diluted earnings per share for the fourth quarter are expected to be above the high end of previously announced expected results of $.80 to $.85 per share on higher than expected core growth.

During his presentation at the conference, Culp said while final figures were still being calculated, EPS will be up "probably a couple of pennies." Core growth, he added, is anticipated to be up 3 percent year over year, compared to 1 percent growth that had been previously expected.

The Life Science and Diagnostics segment "really drove" the results as it grew 5 percent year over year. The Beckman Coulter business was up in the mid-single digits, Culp said, although he added that is unclear whether the growth signals the start of accelerated demand or is the result of pent-up demand.

In 2013, he added, Beckman Coulter is anticipated to see low-single digit growth and improve to mid-single digits in 2014.

He also said that the company had resubmitted to the US Food and Drug Administration its AccuTnl troponin test kits, but declined to say much more about discussions it has had with the agency about the test. The test was previously expected to be refiled in the first quarter of 2012.

Culp also said that Beckman Coulter's molecular diagnostics platform, DxN, is at least one year away from a launch in the US, although an early stage version of it has been shown in Europe. The system has been in development for a number of years.

He said the development of the platform remains "major effort" and Danaher continues to funnel more than $40 million in R&D annually into the firm's molecular diagnostics business. In addition to the platform, assays are being developed for DxN, including those targeting infectious disease, such as hepatitis C, as well as hospital-acquired infections, including Clostridium difficile and methicillin-resistant Staphylococcus aureus.

In August 2011 the US Food and Drug Administration sent a warning letter to Beckman Coulter about violations it found at its Brea, Calif., facility. Culp said that a re-inspection has been done and the warning letter has been lifted.

Quidel

In December, Quidel received clearance from FDA for a molecular assay for detecting Clostridium difficile on the AmpliVue system. Quidel President and CEO Douglas Bryant said yesterday that the company hopes to sign on 1,000 new customers for the test during the year.

The test is the first to receive FDA clearance for use on AmpliVue, a hand-held molecular device, and Bryant said that what happens during the first 120 days of its launch will be critical in determining whether the market accepts the device. He added that he hopes a "big bolus" of the 1,000 customers Quidel hopes to attract to AmpliVue will be snared during this period.

Quidel is launching the test in the US without a big sales staff and especially does not want its regular sales staff, which is focused on the company's flu tests, to push the C. diff test. The goal, Bryant said, is to generate buzz within the American Society for Microbiology crowd.

The other molecular platform being developed at the company is the Wildcat system. The company has locked down the cartridge design for the instrument, and Bryant reiterated the company's goal of launching the Wildcat in 2015 with a menu of 20 assays.

This year, Quidel anticipates launching 10 products, including several open box PCR assays. They include assays for RSV human metapneumovirus, C. difficle, and pertussis.

Lastly, Bryant said that R&D spending in 2013 will increase from the $30 million that the company had targeted for 2012, with more spending directed at the further development of the Wildcat platform, though he declined to provide exact figures.

Last week, Quidel announced preliminary fourth-quarter revenues of between $53 million and $54 million, beating Wall Street estimates of $43.8 million.

Ariosa Diagnostics

Ariosa Diagnostics' CEO Ken Song did not comment on Illumina's acquisition of competitor Verinata Health during his presentation yesterday, instead focusing on the privately held company's performance throughout 2012 as well as some of its plans for 2013.

During the fourth quarter of 2012, the company sold around 22,000 of its Harmony Prenatal Tests, ending the year at a run-rate of more than 100,000 tests. Additionally, he said that the company, which launched its test in June 2012, will become profitable this year. The company has so far raised $67.5 million and has no debt.

Song said that in 2013 the company will focus on expanding its reach in Europe, the Middle East, and Latin America. The company also expects to complete a clinical trial of the Harmony test in 20,000 women comparing it to the standard of care, and in the first half of this year, the company plans to begin a study with a non-US national health care system.

Song also highlighted the differences between Ariosa's Harmony test and its competitors' tests, including Sequenom's MaterniT21Plus and Verinata's Verifi. Both Sequenom and Verinata use a shotgun sequencing approach, while Ariosa takes a more targeted approach, analyzing only DNA from the chromosomes of interest. This increases efficiency and reduces cost, Song said. Ariosa markets its test for $795 while Sequenom's and Verinata's tests are listed between $1,200 and $2,900.

In a recent analysis that the company did looking at clinical utility and economic cost of noninvasive prenatal testing in a high-risk population, it found that for tests priced under $1,000 there would be savings in healthcare costs. Additionally, by incorporating NIPT along with standard of care, detection of trisomy increases by 65 percent and invasive procedures could be reduced by 95 percent. In addition, the study found that the number of miscarriages of healthy fetuses as a result of having an unnecessary invasive procedure could be reduced by 99 percent.

"There are very few technologies where you can have such a dramatic clinical impact and at the same time reduce costs to the healthcare system," Song said.

BioFire Diagnostics

With about $8.9 million in sales recorded during the fourth quarter, the company's FilmArray business is quickly becoming its largest business, CEO Kirk Ririe said.

FilmArray is an FDA-cleared PCR system, and while it has only one test available, a respiratory panel, the company formerly called Idaho Technology is developing four others than it plans to launch over the next four years.

The closest to being market-ready is a panel for sepsis that includes as targets several fungi and four antibiotic-resistant targets. The panel is expected to launch this year, Ririe said.

Next year, BioFire is looking to launch a panel for diarrhea that will detect 25 pathogens from stool. Clinical trials for the test will begin this year.

Additionally, the firm plans to develop a panel for meningitis and one for pneumonia. When all five panels become available, Ririe said, they will address a potential market of $5 billion. That market includes 6,000 hospitals in the US and 50 million tests done per year.

Atossa Genetics

After a soft launch of the ForeCyte breast cancer test in 2012, the Seattle-based firm's priority this year will be the national launch of the test, founder, President, and CEO Stephen Quay said at the Biotech Showcase conference taking place concurrently with JP Morgan.

ForeCyte was launched in December 2011 and during the past year, the test, which provides information about the 10-year and lifetime risk of breast cancer for women between 18 and 65 years of age, was marketed only in select parts of the US.

Atossa, which completed its IPO in November, has secured Medicare reimbursement for the test at $500 per test, Quay said. Atossa bills private payors $1,300 per test.

In September, Atossa inked an agreement with MultiPlan, a managed healthcare preferred provider organization, to provide its members access to Atossa's tests.

Quay said that in 2013, three other tests are being planned for launch: FullCyte for screening women at high risk of developing breast cancer; ArgusCyte to help clinicians guide treatment for breast cancer and monitor potential recurrence; and NextCyte for profiling breast cancer specimens in order to predict treatment outcomes and distant recurrence in women newly diagnosed with breast cancer.

All four tests are laboratory-based.

Exact Sciences

Company President and CEO Kevin Conroy confirmed a previously disclosed timeframe for submitting the third and final module to FDA for its Cologuard colorectal cancer screening test in April or May.

Last month, the firm said it anticipated submitting the clinical module around March after top-line results from its DeeP-C clinical trial for the test became available. Conroy said the later submission date resulted from the enrollment of an additional 2,000 patients for the trial because Exact Sciences thought it did not have enough patients with cancer in the trial, although it found out later that, in fact, it did.

The first module of the company's premarket approval submission to FDA was filed in December and details the manufacturing and quality control systems for Cologuard. Conroy yesterday maintained a February timeframe for the submission of its second module, the analytical module.

While the company continues moving ahead with its FDA submission and processing the samples for the DeeP-C trial, Exact Sciences is looking to build a CLIA laboratory where Cologuard would be performed, although Conroy said that the firm also is exploring options to outsource the test.

He also said that the company is starting a 300 patient trial for a test for the detection of colon cancer and precancer in the inflammatory bowel disease cancer population. Conroy discussed the test during Exact Sciences' third-quarter earnings conference call, saying the test represents "a significant market opportunity" for the firm.

The test would use the same biomarkers and system as those for Cologuard. Conroy said the trial would be completed this year.

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