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Consultant Kenneth Krul Brings Cancer Dx Market Expectations Down a Notch

Kenneth Krul

Name: Kenneth Krul

Position: President of BioTechTelligence, 1998 — the present

Background: President of the Panda Group consultants, 1983 — 1998

Education: MBA, Finance, Pace University, 1982

PhD, Biophysical Chemistry, Columbia University, 1973

Kenneth Krul has been in consulting and business development in the biomedical and biotechnology fields for 32 years, and in that time, he has developed a healthy skepticism for the tendency of the diagnostics industry to promote itself. Perhaps it could be called a vat of cold water.

For example, Krul is highly suspicious about a recent Kalorama Information report estimating that the cancer diagnostics market will reach $7.4 million by 2009. In his view, molecular diagnostics are of little use at all to doctors, payors, and patients if they cannot yield much clinically useful information. Although there are such tests on the market, such as the Her2/neu test to identify Herceptin responders, there are too few of them in the pipeline to "make a big splash in the market" in the near future, he told Pharmacogenomics Reporter in an e-mail message prior to the following interview. While he takes a dim view of most cancer molecular diagnostics — and their future — it's possible to read his perspective as supportive of true pharmacogenomics.

Can you explain your critique of cancer molecular diagnostics?

Unless you can act on the data, there's no sense doing the test. Predictive tests are virtually useless — and do you really want to have those data around for insurance companies to get their hands on it? We know too little right now to make genetic tests for cancer that have high impact.

We've got a lot of things — there are a lot of brilliant people out there coming out with something new all the time. It's that you can get excited about it now, but what's it going to be in the long run? None of this has shown any potential for long-run markets.

The diagnostics industry has a real bad habit, and that's that they absolutely love to blow things out of proportion. First off, one of the things they do is, they spend more time looking at themselves than they do at their customers. I'm not being cynical — I've seen this industry.

This is the way they work, and for years they've been coming up with [things like] home diagnostics, touting it like crazy, saying it's going to be a billion-dollar market, and nothing ever happens.

So, I'm very careful when I look at a new technology and I say, "Yeah, it's got potential. Show me what it's going to do, show me the utility." And that's one of the things, especially with genetic testing, that has been a big bugaboo. I gave a talk at a CHI conference in the mid-90s, and they practically threw eggs at me for the simple reason that I said, 'Hey, you've got all this genetic testing, it's really great, but what are you going to do with it?' If a doctor can't use it, if he can't say, 'I'm going to do this because I have these data,' it's absolutely useless to have a test.

Do you feel that doctors will find pharmacogenomics tests useful in the near term?

I think that most doctors are too busy with what they've got right now to care about whether there are going to be pharmacogenomic tests now, ten years, or twenty years from now.

You're going to find some of the 'thought leaders' who are going to jump all over this stuff, but they're biased toward whoever they're consulting for. They get all hot and bothered about this sort of stuff, but the doc who's down in the field — the guy who you see in the office — what he's interested in right now is working with what he's got. Because he's oriented not toward technology, but toward the patient.

What will diagnostic and pharma companies have to do to move this forward?

I think that what they're going to have to do is relate them to some sort of therapy. Like the Her2/neu test — that makes sense. That makes a lot of sense. With the BRCA analysis, I sat down with [an official from] Myriad Genetics, and I said to him [that the test yields virtually the same information as an extensive family history], and he was at a total loss to answer.

What the company was doing at the time was riding this wave of 'The Year of the Woman,' and all this other stuff. At the time, Carly Simon made a silly statement, she said, 'If breast cancer had been a male disease, it would've been cured by now.' Ever heard of prostate cancer? It was that whole environment that was building the BRCA analysis.

So I think that what they're going to have to do. It was interesting, [there was] a question from somebody — I can't remember who — 'With this link between genomic testing and drug discovery, will this now spread to the diagnostics side?' I thought this was an interesting question, because it's valid. But when you start to understand the nature of genomic testing in pharmaceutical companies, you realize that their targets are highly proprietary. And they're not likely to send out tests that have these targets, because if they did, guess what? There will be people reverse engineering these suckers, and finding out what they're working on.

The other side of it is that, with the exception of Roche and Abbott, pharmaceutical companies have screwed up diagnostics royally over the years, because the philosophies of pharmaceutical development and diagnostics development are antithetical. Let's put it this way — years ago, we'd look at eight to 10 years for a drug. Now they're talking 13 to 15, and they have all this new technology. If you've got all this new technology, why isn't it six to eight?

It's a different philosophy. In diagnostics, you turn out a test in a year, so the whole mindset is different. And the reason that Abbott and Roche were successful was because they divorced their diagnostics operations totally from their pharmaceutical [operations].

You think that's the key factor?

That's why they were successful. You have to go back a while, but if you take a look at the late '60s and in through the '70s, and little bit into the '80s, you're watching pharmaceutical companies starting diagnostics divisions because the clinical laboratory industry was growing by leaps and bounds from the late '60s on. It shot itself in the foot in the '80s. But the thing is that they all wanted to get into it, and the fact of the matter is that so many of them kept it for a couple, three years, and it just died. And they went back to doing their own knitting, which is what they should've done in the first place.

But the thing was — Abbott went and actually bought a diagnostics company. It was kind of a nondescript company. And believe it or not, they went to Texas Instruments, which had an unbelievable group down there of strategic thinkers and people who jumped on opportunities, and knew how to make something out of them. And they hired away executives from Texas Instruments, which had nothing to do with the diagnostics industry. They put it into this [diagnostics] company, threw in a bunch of scientists, broke it off from the pharmaceutical company, they reported right to the head of Abbott. And man, that damn thing took off. And that's how that company got going.

So, if you say to me, 'Oh, yeah, the pharmaceutical companies are going to have this collaboration between diagnostics…' I start to think it's a little hinky.

So then, how about partnerships with smaller diagnostics firms?

The partnering is a good way for [pharma] to go, in the sense that the diagnostics firms will go ahead and do what they're supposed to do, whereas the pharmaceutical company couldn't. The problem with pharmaceutical companies — and now this is 20 or 30 years off — is they may have forgotten this [history]. And if you take a look at pharmaceutical companies, what they usually do is, they find some really great technology group, somebody who's fast moving, can really do something, and then they acquire them. And what do they do? They impose their own corporate culture on them, and they just kill off the ability of these companies to do what they were doing before.

This has been shown time after time after time. But at the same time, I don't see them going out and saying to some diagnostics company, 'Oh, by the way, here's our target, make a diagnostic test.' They're totally paranoid about their targets as it is.

There are people in the genomics industries who want to do all this genetic drug discovery stuff, and it's never been highly successful. And the reason is that they're usually set to working with a limited set of targets that they can pick up someplace else.

Now you have companies like Millennium, but they went and built up their own database. And they own so many of these targets and so much of this data — that's one thing. But the smaller companies, the ones that are out there who want to work with pharmaceutical companies to be able to find things for them using their targets — not going to happen. Millennium, on the other hand, went an entirely different route, which is absolutely phenomenal.

So then what should small molecular diagnostics companies do?

The whole thing is really looking for those genes that make the difference in therapeutic susceptibility and resistance. It's a lot of research, and it's hard to do. Because basically sometimes you're just looking for a gene that produces an enzyme that destroys the drug you're injecting. How do you do this? The HercepTest was good, because you knew there was a relationship between [Herceptin response] and [gene] amplification.

With AIDS, that's relatively easy to do because you've got a viral genome. But when you get into the human genome, boy, you're in another ballpark. That's why I say it's a great idea, but it's going to take a whole lot of work.

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