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AstraZeneca Taps DxS to Relaunch Its ARMS Genotyping Tool; Will Move Spur IP Lawsuits?

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AstraZeneca has asked DxS to help it commercialize a well-known mutation-detection technology. The drug maker’s decision to re-launch the technology, called the amplification refractory mutation system, or ARMS, may also unearth some patent-infringement issues.

The British drug maker, called Zeneca at the time, developed the ARMS technology several years ago. The company obtained a “pretty robust” patent estate for it, and began licensing it to different life-science companies through its diagnostics division, according to David Whitcombe, COO and co-founder of DxS, and a former Zeneca researcher.

However, “that licensing activity ceased” after the company became AstraZeneca in 2001 and “decided that the nucleic acid diagnostics business was not needed,” said Whitcombe. Consequently, many drug makers, diagnostics companies, and SNP-genotyping shops have been using the technology without a license.

“There probably isn’t a drug company in the world that isn’t using ARMS at least to some degree in their genetics and genotyping operations,” Whitcombe said.

AstraZeneca means to put an end to this practice, and has hired DxS and UK-based patent enforcer BTG to track down companies that use the popular tool, and suggest they should begin formally licensing it. The big drug maker also hopes DxS will make improvements to the technology while BTG lines up additional customers. ARMS is “a strategic piece of IP that might be of use as leverage in genotyping or other genomics partnerships-alliance,” Whitcombe wrote in a recent e-mail.

As a genotyping platform, the ARMS technology has some advantages over rivals, according to researchers. “If the diagnosis of certain mutations needs to be repeated routinely — for instance for screening purposes in a population — you would like to have a rapid and specific test,” researchers at the Smurfit Institute at the Trinity College in Dublin, Ireland, wrote in a recent paper. “Assume that we rule out sequencing because we can not afford a sequencer (person or machine), and that the mutation(s) of interest do not alter restriction sites. In these circumstances, the [ARMS] is very convenient once optimized.”

“It’s a strong alternative to the TaqMan and allele-specific hybridization approaches that are currently widely used,” Whitcombe said. “A single mismatch in the centre of a 20-mer ASH probe can give some discrimination,” he wrote in an e-mail response to SNPtech Pharmacogenomics Reporter.

“The role of the probe is to both detect target and discriminate the match/mismatch. … In this approach, the absolute maximum signal ratio of match:mismatch is ~20:1.

“With ARMS, the enzyme ‘sees’ the local match/mismatch structure at the 3’-end of the primer with much greater resolution,” Whitcombe went on. “Taq polymerase extends the fully matched template/primer hybrid much more efficiently than it would a mismatched template/primer hybrid. This ratio of efficiency can be as great as 106:1.”

He said researchers can “specifically amplify matched templates in the presence of a million-fold excess of mismatch target. The job of the probe now is purely to detect the presence or absence of product, so high Tm probes are entirely appropriate.”

The founders of DxS, who along with Whitcombe include CEO Stephen Little and CFO Shalni Arora, are former researchers in Zeneca’s diagnostics division who “have worked extensively with the technology” before the drug maker disbanded the unit four years ago. “AstraZeneca probably correctly decided it didn’t want to be in molecular diagnostics as a business,” he said.

It was during that time that Whitcombe and his AstraZeneca colleagues “expressed interest” in acquiring the ARMS technology. “Negotiations have been on and off to various degrees of coolness or enthusiasm over the last two or three years,” he said.

But over the last few months, AstraZeneca “decided that they weren’t exploiting it for themselves,” and that somebody else might do a better job at getting it into the market, Whitcombe said.

AstraZeneca has always considered the technology a “strategic asset,” but it now wants to “get more licensing deals and pursue infringers, because they had not had a policy in the past of pursuing infringers,” said Whitcombe.

“There are a significant number of infringers out there,” Whitcombe said. DxS will begin commercializing the platform for new and “existing customers” while UK neighbor BTG will chase down and challenge infringers.

The responsibilities given to DxS and BTG are “just not something [AstraZeneca] does well,” said Whitcombe. “If it was a drug or a compound, the company would be able to approach IP challenges more easily; enabling-diagnostics technologies is just not something that fits into their history and know-how.”

Whitcombe said AstraZeneca based its decision to hire DxS not only because of its professional pedigree, but also on its success marketing another genotyping technology, Scorpions, that was developed by the pharma giant. “We’ve managed to out-license Scorpions a few times now, and [AstraZeneca] feels we’re credible and good at licensing technologies, and therefore can get more for ARMS.” [See 2/7/03 SNPtech Pharmacogenomics Reporter]

The company’s primary customers — and therefore potential infringers — make up a “long list,” Whitcombe said.” HLA-typing shops and SNP-genotyping firms reside at the top of that list. He added: “To be honest, there probably isn’t a drug company in the world that isn’t using ARMS at least to some degree in their genetics and genotyping operations. Similarly, … there’s a large amount of diagnostic and research company activity going on that we are aware of, and we want a piece of it.”

He would not disclose financial terms of any back due royalties or new license fees. “There are existing licensees out there just as there are infringers out there — not because they didn’t want to take a license, but because they haven’t been able to do it through AstraZeneca,” he said. “In the first instance, there are plenty of people who recognize that they do need a license, and haven’t been able to get one from AstraZeneca. This enables us to get a running start.”

BTG, which is based in London and has offices in Philadelphia and Tokyo, will be helping DxS track down alleged infringers, Whitcombe said. DxS is based in Manchester, UK. “They have a track record in enforcement and due diligence, so they have lawyers and auditors. They are much more on the legal and commercial side than the scientific side. “We would do most of the technical work to identify who’s likely to need a license, and also we would do some technology improvements along the way,” he added. DxS and BTG “are like good cop, bad cop,” he added. “We get to play the good cop.”

He said that the two companies have already begun negotiating with alleged infringers. “It’s not like [companies] are hiding.”

Asked if he anticipates litigation, Whitcombe said: “We do expect that some people will be more resistant than others, yes. It needn’t lead to litigation.”

—KL

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