Siemens, the giant German conglomerate, is banking that Sequenom’s MassArray platform can help it grab a stake in a molecular-diagnostics market led by rival General Electric.
Terms of the deal, announced this week, call for Siemens’ Medical Solutions division to buy four of Sequenom’s Compact MassArray platforms and place them in four diagnostic and clinical labs in the United States and Europe to study their potential use as a clinical diagnostics platform, according to Sequenom.
The German company may be following in the path of other medical-services and -instrumentation companies that have either collaborated with or acquired genotyping companies in an attempt to create diagnostic products for a market in which its imaging and services products are currently sold.
“We are interested in novel platforms for different nucleic-acid based diagnostic applications,” Mohammad Naraghi, Siemens senior vice president of business development, said in a statement this week.
The exact type of application that Siemens has in mind for the MassArray is still under discussion between the new partners. But Siemens was interested in evaluating the use of platform’s genotyping, epigenetic analysis, and gene-expression analysis in diagnostics, said Murali Prahalad, vice president of business development at Sequenom.
“We suspect that Siemens, after looking at our platform, felt that the data quality we bring to a number of applications … may be of use in a clinical environment,” he said. Prahalad would not disclose disease states or specific molecular markers of interest to Siemens.
Siemens will “evaluate a range of platforms, because the link between molecular medicine, molecular imaging, and current imaging modalities is becoming more apparent,” said Prahalad. “I think the definitions of diagnostics will blur.”
Siemens Medical Solutions employs 31,000 people and sells its imaging technologies, information technologies and service products through 120 sales offices worldwide, according to the company’s website.
“Our recent agreement with Siemens Medical Solutions supports our effort in the molecular medicine market,” Sequenom CEO Toni Schuh said during an Oct. 26 third-quarter conference call. “Not only are we allying with the largest manufacturer of medical technologies in the world, but we also broaden our access to new customers through the reference site selections where four of our MassArray Compact systems will be placed.”
“There is a huge potential for innovation in diagnostics and IT systems. Overall, I think the next generation of products will follow a platform concept in order to achieve R&D synergies,” said Erich Reinhardt, president and CEO of Siemens Medical Solutions in a statement announcing the agreement with Sequenom.
A similar collaboration was announced as recently as this summer, and identical sentiments were expressed this spring. In July, GE and Celera Genomics announced an alliance aimed at developing imaging agents that would help physicians identify certain cancers sooner and more accurately [See PGx Reporter, 7/15/04].
The deal, which will initially focus on four kinds of tumors and the proteins on the surface of cells, would also empower Celera Diagnostics to develop molecular diagnostics based on these agents, which could be used to identify at-risk populations or to pinpoint disease onset or severity.
Also under discussion was the continuation of Amersham’s molecular diagnostics programs. To that end, GE is betting that the Celera deal would enable physicians to integrate data from its imaging tools with information from the CodeLink platform.
“There’s in vivo imaging from the PET [scan], but there’s also information that has just come back from ... a SNP-based assay courtesy of CodeLink. We see that there’s going to be some great growth potentials here,” Trevor Hawkins, senior vice president of development and new business initiatives, said in April (see PGx Reporter, 4/14/04).
But beyond the terms of the current research agreement, any entry of the MassArray into the diagnostic space would be solely at the discretion of Siemens. Sequenom continues to focus on the research market, while supporting and promoting the use of the platform by customers outside of the company’s specialty, said Prahalad. “In terms of developing an in vitro diagnostic on our own — that is clearly something we’re not pursuing,” he said.
In an April conversation with Pharmacogenomics Reporter, Sequenom CFO Steve Zaniboni said the company was “in the middle” of a transition from the research market to “applied genetic analysis for the clinical genetics market and the molecular healthcare market.” Zaniboni mentioned “activity in the customer base of the analysis of fetal DNA for genetic detection in maternal blood” as a “leading edge” project for Sequenom (see PGx Reporter, 7/29/04). Prahalad mentioned the same application as an example of novel uses of MassArray in the hands of customers.
Asked whether Siemens has mentioned the possibility of pursuing an IVD certification, Prahalad said: “Right now we’re in discussions on some of those points,” but added that he could not elaborate. No definitive decisions have been made regarding any ASR coming out of the collaboration, he said. Sequenom still plans to commercialize an ASR of its own in 2005, he added.
“We intend to develop ASRs supporting genetic trace analysis for early cancer detection, pathogen identification, and veterinary diagnostics,” Schuh said during the conference call.
Sequenom representatives declined to disclose financial terms of the deal, and terms were not detailed in a Form 8-K filed with the US Securities and Exchange Commission. Siemens representatives were unavailable for comment before this issue’s publication.
Under the terms of the agreement, Siemens will purchase the Compact MassArray platforms, consumables, and service and support, while both companies will sign agreements with participating laboratories. The firms will monitor the progress at the four research sites and conduct a benchmarking program and functional requirement analysis. The project should take between six and nine months to complete, said Prahalad.
In its past, Sequenom sold MassArray platforms to the Korean electronics giant Samsung. Since June 2002, the two companies have nurtured a vendor relationship after the Samsung Advanced Institute of Technology purchased $7 million worth of MassArrays to help it design diagnostic products. Terms of this deal call for Sequenom to receive half of the rights to products resulting from the collaboration, as well as a 5-percent royalty.
The Samsung unit’s Biochip Project Team now “conduct(s) research in three areas: biochip-platform developments, SNP identification and validation for several human diseases, and bioinformatics,” according to the division’s website.