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Flush From Roche Deal, Epigenomics Readies Methylation Kit for Research

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Epigenomics will soon begin selling a kit to US-based research labs that will enable them to interpret DNA methylation states in a variety of cancers, a company official told SNPtech Reporter this week.

The German tool shop hopes the offering will help validate its methylation technology as an effective platform not only as a key component in molecular diagnostics — thanks to a recent deal with Roche Diagnostics — but also as a staple among researchers comparing diseased tissue against normal tissue.

Oliver Schacht, CFO of Epigenomics, said the company will begin selling the two-part kit by the end of next year. The product, developed by Epigenomics staff in Berlin and Seattle, comprises a kit that treats DNA samples with bisulfide, which will enable researchers to read methylation states, and standard real-time PCR assays for “several hundred … of the most interesting cancer genes” that will measure the methylation status in them.

Epigenomics will make both components of the product, and an undisclosed catalogue company such as Amersham or Invitrogen will manufacture, market, and sell it, said Gary Schweikert, CEO of Epigenomics’ Seattle division. Schacht told SNPtech Reporter that Epigenomics will name the catalog company before the end of the year.

“There’s growing interest in the research community to be able to do this, because there’s nothing out there today,” said Schact, referring to DNA methylation. He said the market for research products based on the technology, estimated at between $200 million and $300 million, is “a niche, but an attractive niche.” However, when launched, the kit would compete with a product sold by Serologicals, which in turn is based on a technology acquired from Intergen (See SNPtech Reporter, 1/24/2003).

The Roche Dx Strategy — And Epigenomics’ Pay Day

The deal will be the third important technology validation for Epigenomics, which has been banking on the success of DNA methylation as a tool in early disease detection, drug response, and tumor characterization. However, it will be the second for the company that merges methylation and PCR.

The first of these two deals, announced in March with Roche Diagnostics, stands to enrich Epigenomics by €104 million ($120 million) and eventually move its technology into the rarefied — and profitable — world of large reference labs.

The collaboration calls for the two companies to develop molecular diagnostic products that pair Roche’s PCR platform with Epigenomics’ DNA-methylation technology. Specifically, this diagnostic program will seek to create products that test healthy individuals for their chance of developing colon, prostate, and breast cancer.

This is a notable disclosure, because Schweikert originally declined to say which one of the three applications of DNA methylation — early detection, drug response, or tumor characterization — would be taken up by Roche. When the Roche deal was announced in March, Schweikert told SNPtech Reporter that the diagnostic giant would consider all three.

Roche intends to marry DNA methylation with PCR and develop an IVD that can be used by reference labs. Initially, Roche will market to research labs any markers identified through the collaboration, with a US Food and Drug Administration application to follow. Schacht said Roche expects to begin marketing the products worldwide in 2006. They will be sold to reference labs in the United States as ASRs at that time, he said. Epigenomics intends to hand over the first assays for the three cancers next fall.

Roche is taking the methylation gamble following the success of its theranostic programs in breast cancer, with Herceptin, and colorectal cancer, with Xeloda. With the DNA methylation component, the Swiss company is moving into the early-detection space. So over the next three years, Roche, which commands more than 50 percent of the molecular-diagnostics market, 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.

Long term, Roche’s strategy is to pair these diagnostics with existing drugs — a strategy typified in a deal struck earlier this year between Bayer and Genaissance Pharmaceuticals (see SNPtech Reporter, 1/31/03). In that deal, Bayer will develop and market assays to hospitals and health-care providers.

Both strategies illustrate an increasingly popular way in which molecular diagnostics can be applied to theranostics, a market expected to exceed $2 billion by 2013. Roche recognizes this and was willing to bet more than €100 million on a technology that is largely untested in cancer diagnostics, and that is made by a company that has had no collaborative relationships with big pharma before Roche came calling.

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

Heino von Prondzynski, head of Roche Diagnostics, in March 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 will have a nice pot of cash to show for the deal: The agreement calls for Roche to pay Epigenomics €4 million along with R&D funding, milestone payments, and royalties that could total €100 million.

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

Looking ahead, Schacht said Epigenomics is seeking partners to help market discoveries for early-screening tests in ovarian cancer and lymphoma. He also stressed that the methylation technology can be used beyond cancer diagnostics. For example, he said, the technology can help identify individuals at risk for endometriosis, preeclampsia, multiple sclerosis, and rheumatoid arthritis.

In fact, over the next 12 to 18 months, “I would expect Epigenomics either to significantly expand the breadth and scope of the Roche partnership at some stage, or to add one or two in vitro diagnostics players to partner those additional cancer diagnostics programs,” Schacht said, referring to ovarian cancer and lymphoma.

— KL

 

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