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Decode Will Focus on Dx Sales in 2008; Targeted Drugs on the Distant Horizon

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Decode Genetics this year plans to encourage greater adoption of its suite of diagnostics that gauge patients’ risk of developing common diseases, according to CEO Kari Stefansson.
 
He said these tests, which will be marketed directly to consumers, will bring financial returns in the short term, while several genetically targeted drugs in its pipeline will foment long-term growth.
 
Speaking to investors at the JPMorgan Healthcare Conference in San Francisco earlier this month, Stefansson discussed commercialization plans for newly launched tests for diabetes, myocardial infarction, and atrial fibrillation. He also talked about tests in production that focus on prostate cancer, breast cancer, deep-vein thrombosis, glaucoma, and aneurysm.
 
“The diagnostics market is expected to grow pretty rapidly over the next few years. There are already 900 DNA-based tests, but almost all of them are for very rare variants,” Stefansson said. “We have IP on a fairly large number of sequence variants that confer a sufficiently large risk for common diseases [and] it is reasonable to develop them into diagnostics.”
 
DTC Dx
 
A growing number of diagnostic companies appear to be embracing direct-to-consumer advertising as a way to spread the word about their products. Myriad Genetics was one of first diagnostics shops to embrace a pharma-style DTC campaign for its BRACAnalysis test for breast cancer risk. One downside was the concern among physicians that their practices would be unable to handle the influx of BRCA-test requests fueled by Myriad’s television ads [see PGx Reporter 09-12-2007].
 
However, the pharma industry’s experience with DTC efforts is a cautionary tale that although aggressive marketing campaigns can boost sales, they can also result in regulatory and consumer backlash.
 
After fielding criticism for irresponsible advertising tactics during the past 15 years, the pharma industry has now decided to self-regulate and has adopted DTC good-practices guidelines.
 
Although the diagnostics market is populated with smaller cap companies than the pharma segment, some Dx shops a treading carefully toward DTC-type campaigns.  
 
Beside Decode, Genomic Health announced at the JPMorgan Healthcare Conference that this year it would focus on spreading the word to patients about its Oncotype DX breast cancer recurrence test. The company’s strategy is more cautious than the broader direct-to-consumer efforts favored by big pharma. Instead, Genomic Health presented its online campaign for Oncotype DX as “direct-to-patient” and called it an educational effort to increase awareness of its test among patients diagnosed with early-stage breast cancer [see PGx Reporter 01-16-2008].
 
Decode did not return a request for comment about its DTC plans. At the JPMorgan conference, Stefansson said that the company planned to market its tests directly to physicians and consumers.
 
The company “has collaborations to develop demonstration studies to generate data on clinical utility, to use in our negotiations for reimbursement, and also to drive adoption of our products,” Stefansson added.
 
Diagnostics Pipeline
 
Last year, Decode launched three tests: Decode AF, Decode MI, and Decode T2 [see PGx Reporter 11-14-2007].
 
Decode AF is a reference laboratory diagnostic for gauging patients’ risk of atrial fibrillation and subsequent stroke. It is based on the company’s discovery of a genetic variant on chromosome 4q25 that confers between a 40 percent and 160 percent increase in the risk of a-fib. Decode published findings from this discovery in the July 2007 issue of Nature.
 

“Diagnostics and DecodeMe represent the prototypes with which we expect to capture revenues in [the] near term, and begin to look at the big money [in therapeutics], which is unfortunately a little bit more distant.”

Decode MI, meantime, detects SNPs in the CDKN2A/2B gene region of chromosome 9. Based on studies in a few thousand patients, the test shows that patients positive for these variants have double the risk than controls of developing early-onset myocardial infarction. According to Decode, approximately 20 percent of the general population in the US and Europe carries this genetic variant.
 
Finally, Decode T2 is designed to detect SNPs in the TCF7L2 gene, which is linked to an increased risk of developing Type 2 diabetes. Studies have shown that between 8 percent and 11 percent of the general population have two copies of the risk variant, and that individuals with Type 2 diabetes are twice as likely as the general population to carry two copies of the SNPs.
 
Decode is developing a fourth test, for glaucoma, which identifies a sequence variant that accounts for 100 percent of the exfoliation glaucomas, one of the most common secondary forms of the disease.  
 
Stefansson told investors at the conference that Decode aims to launch tests for prostate cancer, edema, deep-vein thrombosis, and breast cancer in the first half of this year.
 
Drugs On the Horizon
 
“Diagnostics and DecodeMe represent the prototypes with which we expect to capture revenues in [the] near term, and begin to look at the big money [in therapeutics], which is unfortunately a little bit more distant,” Stefansson said at the conference. 
 
DecodeMe, a personal genomics testing service recently launched by Decode, can also serve as a marketing vehicle for the company’s diagnostics. The company said in November that its DecodeMe service will use a cheek-swab sample and a password-controlled personal account to give customers analysis about their own genomic information, including knowledge about genetic variants associated with risks for common diseases, ancestry, and traits such as hair and eye color.
 
On the therapeutics side, Decode is currently developing the following candidates: DG-041, an antagonist of the EP3 receptor for prostaglandins E2, which doubles the risk of peripheral arterial disease; DG-051, an inhibitor of leukotriene A4 hydrolase, which encodes the final LTB4 biosynthetic enzyme and is linked to increased MI risk; and DG-031, which has been shown to reduce LTB4, a pro-inflammatory molecule, in a dose-dependent manner.
 
DG-041 has successfully completed Phase IIa trials. Decode is developing a new daily dosing formula for the drug and is planning to conduct additional pharmacology studies in the first quarter to study the compound when given in combination with Plavix or with Plavix and aspirin.
 
DG-051 has completed Phase I and Phase IIa safety and tolerance studies. The company has begun a Phase IIa pharmacokinetic/pharmacodynamic study to determine the appropriate dosing for the drug; a Phase IIb dosing study for the compound is slated to start this spring.
 
Between DG-051 and DG-031 the company is currently trying to decide which to move forward first. Stefansson said that this will “very much depend on the potential corporate partners we have been negotiating with of late.”

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