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Buoyed By Herceptin Juggernaut, Roche Dx Bets on DNA Methylation in New R&D Deal

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Emboldened by the success of diagnostic-therapeutic pairings with breast-cancer drug Herceptin and colorectal-cancer drug Xeloda, Roche wants to tackle early detection, drug response, and tumor staging for a trio of cancers, company officials said.

Over the next three years, Roche will learn whether combining DNA methylation and PCR will allow it to develop a suite of molecular-diagnostic assays for breast, colon, and prostate cancers. Along for the ride is Epigenomics, a modest Seattle-based technology company whose DNA-methylation platform suddenly found a very rich Swiss suitor.

Long term, Roche’s strategy is to pair these diagnostics with existing drugs — a strategy typified in a deal struck in January between its German neighbor Bayer and Genaissance Pharmaceuticals (see SNPtech Reporter, 1/31/03). In that deal, Bayer is slated to develop and market assays to hospitals and health-care providers. Roche, in contrast, would sell its assays to reference labs.

Both strategies illustrate an increasingly popular way in which molecular diagnostics can be applied to a market expected to exceed $2 billion by 2013. Roche recognizes this and is willing to gamble: It is betting more than €100 million on a technology that is untested in cancer diagnostics, and that is made by a company that has had no collaborative relationships before Roche came calling two years ago.

“One of our main strengths is having a pharmaceutical part and a diagnostic part together in one company,” said Jorg Kleiber, an official at Roche Diagnostics’ R&D group. “I think [the collaboration with Epigenomics] is a model that clearly makes sense, and which we will further pursue in the future.”

Fork in the Road

To be sure, Roche has three diagnostics paths it can bushwhack with Epigenomics’ help: It can either develop products for the early detection of cancer; products that help physicians predict drug response; or ones that stage and characterize tumors. Kleiber would not say which of the three would be a main focus for Roche, but hinted that the company will consider all three. (Gary Schweikert, CEO of Epigenomics, told SNPtech Reporter that future collaborations with biopharma companies — he said a couple are in the works — would focus on using DNA methylation to determine drug response. He stressed that this was not the avenue that Roche will take.)

“We now have to see what is the best way … to apply this technology,” said Karim Tabiti, an official at Roche Diagnostics’ business-development group. “This is very new … and obviously at the beginning you want to be very broad and try to determine how you can get the best value from the [DNA-methylation] technology.”

He added that Roche expects to have an initial product ready for commercialization in 2006, which would be sold to reference laboratories. According to Gary Schweikert, CEO of Epigenomics, the assays would be marketed worldwide; in the United States, they would be marketed as ASRs, while “full regulatory approval” would be sought soon after.

DNA methylation will be used by Roche and Epigenomics in the following way: A researcher would obtain DNA from a cancer-tissue sample. Next, he or she would treat the DNA with bisulfide, which would change the base upon which the cytosine base gets methylated. “If it’s methylated, its structure is changed … and we have primers and specific real-time PCR probes that measure that difference between methylated and unmethylated state of a particular sequence,” Schweikert said.

Heino von Prondzynski, head of Roche Diagnostics, last week commented on Roche’s cancer presence in the marketplace — it currently sells five cancer therapeutics worldwide — and stressed that the Epigenomics deal is designed to “complement” Roche’s position in diagnostics.

The collaboration is an even bigger step for Epigenomics — not least because it is the first time that DNA methylation will be paired with PCR to develop a cancer diagnostic. In fact, the Roche deal is the second partnership in the company’s history, said Schweikert.

The company, which is the name-sake of its Berlin-based parent company, will have a nice pot of cash to show for the deal: The agreement, announced earlier this week, calls for Roche to pay Epigenomics €4 million along with R&D funding, milestone payments, and royalties that could total €100 million.

Epigenomics and Roche were introduced two years ago when a Roche technology scout based near Munich, Germany, happened upon Epigenomics’ web site. “It interested him, and he came to visit us [in Berlin]. He seemed to like what we were doing, and that led to this deal.”

As a bonus to Roche, Epigenomics, which currently employs 125 people between its offices in Seattle and Berlin, is experienced in cancer research: Robert Day, who helped found Epigenomics in the United States, was the president of the Fred Hutchinson Cancer Research Center for close to 20 years, and was a member of the National Cancer Board.

Schweikert said Epigenomics is currently in discussions with other US and European biopharma companies that are interested in DNA methylation. He said he expects to announce “one or more additional deals” later this year.

— KL

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