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Roche, Kauffman Foundation, Decode Genetics, National Institute of Diabetes and Digestive and Kidney Diseases

Roche Posts Growth in Nine-Month Sales for Applied Science, Molecular Dx Businesses
Roche this week reported a 19-percent increase in sales, as measured in local currencies, for its Applied Science business for the nine-month period ended Sept. 30, accompanied by 4 percent growth in sales measured in local currencies for its molecular diagnostics business.
Roche said that the rise in the Swiss franc against most currencies during the period, particularly against the US dollar, resulted in lower growth in Swiss francs as compared to local currencies. As a result, the company broke out growth in Swiss francs, local currencies, and US dollars for the period.
Roche Applied Science posted nine-month sales of 546 million Swiss francs ($473 million), a 10 percent increase over 498 million Swiss francs in the first nine months of 2007.  In local currencies, the company reported 19 percent growth for the period, and 26 percent growth in US dollars.
The company said that sales of its Genome Sequencer FLX “nearly doubled despite increased pressure from competitors” during the period. Roche said that it also saw double-digit growth for its qPCR analysis products, particularly its LightCycler 480 instruments, and that its Roche NimbleGen microarrays were a contributor to sales.
Nine-month revenues for molecular diagnostics dipped 3 percent to 828 million Swiss francs from 856 million Swiss francs. In local currencies, the firm reported growth of 4 percent, and in US dollars, revenues for this group grew 12 percent during the period.
Roche said that it saw strong sales of its automated platforms for HIV and hepatitis B and C testing during the period, while blood screening sales declined 2 percent.
Overall sales for the Diagnostics Division, which houses Applied Sciences and Molecular Diagnostics, increased 4 percent to 7.1 billion Swiss francs from 6.8 billion Swiss francs, an increase of 11 percent in local currencies and 20 percent in US dollars.
Ventana, the tissue diagnostics business that Roche acquired in February, posted sales of 261 million Swiss francs in the eight months ending Sept. 30, accounting for 4 percent of the Diagnostic Division’s nine-month revenues.
Total nine-month sales for the Roche Group, which includes the Pharmaceuticals and Diagnostics Divisions, declined 2 percent to 33.3 billion Swiss francs from 33.9 billion Swiss francs, representing 6 percent growth in local currencies and 13 percent growth in US dollars.

Non-Profits Could Bolster Personalized Medicine, Kauffman Report Argues
Personalized medicine may not be able to live up to its promise as long as the pharmaceutical industry is focused on blockbuster drugs, according to a new white paper from the Kauffman Foundation, which argues that small biotechs working in this field should begin to look to non-profit organizations to help fund their studies.
In the report, which was presented to the US Department of Health and Human Services at a recent healthcare innovation conference, the Kauffman Foundation proposes that partnerships between biotechs and non-profits that are focused on diseases could help fund necessary research and could support personalized medicine programs at critical moments in the development phases. 
“Even after typical ‘blockbuster’ drugs are marketed, only 30 percent of them achieve sales that match or surpass their multi-billion-dollar R&D costs,” Lesa Mitchell, VP of Advancing Innovation for the Kauffman Foundation and a co-author of the study, said in a statement.
“Thus, with lower efficacy levels (40 percent to 60 percent) of most blockbuster drugs, as well as some high-profile successes of stratified medicines such as Genentech’s Herceptin and Novartis’ Gleevec, the industry is beginning to realize the deficiencies in the economics of the blockbuster business model, which is one of the drivers of increased interest and investment in the development of stratified medicine,” Mitchell explained.
“The identification of clinical biomarkers or diagnostics linked to gene expression profiles of individual or sub-populations of patients is an essential feature of stratified or targeted medicine,” the report states, noting that “this type of research attracts and often is best pursued by small biotech companies.”

However, it adds, a key challenge for these companies “lies in the lack of early-stage funding to translate new discoveries into the clinic and, ultimately, to commercialization.”

Furthermore, “with a narrowing access to public capital and venture capitalists increasingly reticent to invest in early-stage technology companies, smaller biotech companies increasingly are engaging in alternative financing mechanisms that often compromise their value in terms of access to future returns.”
Nonprofit institutions focused on specific or general diseases could intervene here in ways that would help personalized medicine grow and advance.
As one example, the report notes that the Multiple Myeloma Research Foundation is leading a consortium that is focused on genomics and credentialing of molecular targets, drug validation, and multi-site clinical trials. MMRF conducts its studies in collaboration with fifteen research centers, and it aims to incentivize drug companies to join new collaborations to develop new drugs and therapies.
One MMRF approach is to identify genetic complexities of disease and to identify molecular targets by analyzing data from tissue and patient data banks for information on disease onset and progression, “with the goal of personalized medicine development.”
The MMRC also has invested $8 million over four years on a Multiple Myeloma Genomics Initiative to study 250 patient tissue samples using gene expression profiling, comparative genomics hybridization, and resequencing.
The MMRC also has created uniform contracts, clinical trial agreements, and correlative and sciences agreements in order to expedite and create efficiencies for conducting multi-site clinical trials.
An important role for foundations in personalized medicine could be getting involved in what the Kauffman foundation calls “de-risking activities,” which are aimed at filling funding gaps, and improving the probability of success.
Large foundations can use their largesse to finance and manage discovery and development programs. The Gates Foundation’s Global Health Program, for example, works through venture intermediaries to support R&D and to provide global access to new vaccines, drugs, and other health tools.
These venture intermediaries, or product development public-private partnerships, can function “as a virtual pharma company looking for good ideas, progressing them to the point where proof of concept is achieved,” and then ideally handing projects on to or collaborating with large pharmaceutical companies.
The Gates Foundation’s GHP, for example, has committed $6 billion in global health grants to date.

Decode Genetics Seeks to Sell Non-Core Assets; Shares Plummet
Decode Genetics said last week that it is conducting a review of its long-term business strategy with a goal of sharpening its business focus and selling non-core assets, among other aims.
Decode's shares tumbled 34 percent to close at $.25 on the Nasdaq the day following the announcement. At press time Wednesday, the company had gained some ground and was trading at $.33. Decode’s shares are down more than 90 percent from the beginning of the year.
The Reykjavik, Iceland-based firm said it has hired the Stanford Group Company to assist it in evaluating strategic alternatives and executing quickly on the results of the review by identifying buyers or partners for its non-core business units, programs, and intellectual property.
Decode did not say what parts of its business or technologies are considered non-core. The firm has early-stage drug development programs and a portfolio of DNA-based tests for diabetes, cardiovascular, and oncology applications, which it offers through its own CLIA-registered laboratory.
“We are in the process of creating a smaller, leaner Decode that will devote its efforts and resources to one line of business,” Kari Stefansson, CEO of Decode, said in a statement. “We have created a unique and growing portfolio of intellectual property, as well as a range of products and programs in both our drug development and diagnostics work, and we are engaged in discussions with potential partners and purchasers for various programs and business units.”
Decode intends to provide an update on the review during its third-quarter conference call on Nov. 6.
In addition, the firm said that it has elected to utilize a 30-day grace period for the scheduled Oct. 15 interest payment on its outstanding 3.5 percent senior convertible notes due 2011, as it completes the review and considers the sale of assets.
Earlier this month, Decode received a letter from Nasdaq informing the firm that it currently does not comply with regulations regarding the market value of its stock. If Decode does not regain compliance by Oct. 30, Nasdaq said that its shares would be delisted.

NIDDK Marks $20M for Type 1 Diabetes Gene Studies
The National Institute of Diabetes and Digestive and Kidney Diseases will spend $20 million over five years to fund fine-mapping and other studies of genes that may be involved in type 1 diabetes.
NIDDK seeks to support scientists who are studying replication and fine mapping of genetic regions that are putatively associated with type 1 diabetes. The institute also intends to fund studies that apply new technologies to the genetics of type 1 diabetes.
Genome-wide association studies of this disease have shown promise, according to NIDDK, but in order to provide follow-up support the institute aims to support these studies of genetic regions. Studies of these genes will help to understand disease risk, help define etiological pathways, and identify potential leads for new therapeutic targets.
NIDDK expects to fund between four and ten awards ranging between $1.5 million and $5 million, with total direct costs of up to $5 million over the five years.
NIDDK stated in a call for applications that it hopes to bring together scientists experienced in genetics, immunology, and biochemistry to conduct fine mapping and to study the functions of genes in order to understand how changes in the genes can affect type 1 diabetes. Studies of these genes and genetic changes could lead to predictive strategies for individuals suffering from the disease, as well as personalized drug treatment regimens.
NIDDK will consider various types of studies that address its needs. Researchers could seek to identify specific genetic variants that influence type 1 diabetes risk, which could be prioritized, and gene-to-gene interactions could be studied as well.
This research also could include association analysis mapping, including sequencing and resequencing regions, or by constructing high-density SNP maps. Scientists also may study methylation patterns in dinucleotides in regulatory regions of genes that appear to affect gene expression in type 1 diabetes. Investigators also could propose conducting analysis in families of paternally/maternally expressed genes that are likely candidates for diabetes susceptibility.

More information about the NIDDK’s program, “Fine Mapping and Function of Genes for Type 1 Diabetes,” is available here.

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