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Exagen Believes Its Computational Method Has An Edge in Emerging Multivariate IVD Market

Diagnostic startup Exagen is betting that an algorithm originally developed for the automotive industry will give it a head start in the race to bring certain newly categorized genomic diagnostics to market.
The Albuquerque, NM-based company plans to file its first diagnostic, for breast cancer recurrence, with the US Food and Drug Administration within the next two months.
The test would be the third genomic-based breast cancer assay to hit the market after similar diagnostics from Genomic Health and Agendia. However, Exagen officials are confident that the computational approach it used to develop the test will give it an edge over the front-runners in the field.
The test would fall under a newly defined class of molecular diagnostics recently proposed by the US Food and Drug Administration. These tests, called in vitro diagnostic multivariate index assays, or IVDMIAs, use mathematical formulas to interpret gene and protein data to guide medical decision-making.
In a draft guidance released last fall, the FDA said such tests must be cleared by the agency; ordinarily they would be overseen by Clinical Laboratory Improvement Amendments regulations. The FDA held a public meeting this week to discuss the new category.
Exagen’s software, called the Exagen Discovery Engine, was derived from a pattern-recognition algorithm originally developed by non-destructive testing firm Quasar International to screen huge volumes of data to identify defects in automotive parts.
Rather than select a set of predictive genes from a gene-expression data set based on ranking alone, Exagen’s approach iteratively evaluates the predictive power of gene combinations to determine which combinations best discriminate between two patient types — regardless of the predictive power of the individual genes on their own. A typical search can include up to 50,000 iterations, so the company runs the algorithm in parallel on an Apple Xserve G5 cluster.
Exagen claims that this platform enables it to discover a set of biomarkers and develop a diagnostic test within two months, compared to two to three years for other firms.
According to the company, this approach also allows it to identify much smaller sets of genes than its competitors — between three and five genes, as opposed to 21 genes for Genomic Health’s Oncotype Dx and 70 genes for Agendia’s MammaPrint.
In addition, Exagen claims that the predictive accuracy of these smaller gene sets is much higher than that of its rivals because it accounts for those genes that would otherwise not meet the threshold for a ranked gene list, but might provide very high predictive accuracy in combination with other genes. 
The primary advantage of a three-gene biomarker panel, according to Exagen, is that it enables the firm to package and license the sets as reagents to large commercial testing laboratories, which can then run the assays using any standard fluorescent in situ hybridization platform.
Genomic Health and Agendia “have a high number of genes, so they have to do the testing themselves” as CLIA-certified laboratories, James McClintic, CEO of Exagen, told BioInform this week. Genomic Health uses RT-PCR to analyze the 21 genes for Oncotype DX, while Agendia uses custom Agilent microarrays for its 70-gene panel.
“We’re able to get the same answer with fewer genes, so we can put this in a kit and sell it to reference laboratories. So where they are a reference laboratory and a service provider, we are a discoverer, developer, manufacturer, and distributor of kits.”
Exagen expects this business model to give it broader market reach because it can team with well-established reference labs rather than tackle the market on its own. Under this strategy, it must file for 510(k) clearance from the FDA, but that’s a requirement that the company welcomes — especially in light of recent developments at the FDA regarding multi-gene tests.
The IVDMIA Guidance
Last September, the FDA issued a draft guidance explaining IVDMIAs, which it defined as tests in which an assay and an algorithm are “inextricably linked” in obtaining meaningful test results. Such tests report a result “that cannot be interpreted by the well-trained healthcare practitioner using prior knowledge of medicine without information from the test developer regarding its clinical performance and effectiveness,” according to the FDA.
Prior to this guidance, the FDA did not regulate tests that were developed and performed in single laboratories, which were overseen solely by the Centers for Medicare & Medicaid Services’ CLIA regulations.
However, the FDA noted in the draft guidance that IVDMIAs are more complex than the standard analyte-specific reagents that most CLIA labs develop and use in so-called “homebrew” assays, and therefore require FDA clearance.
The guidance took some firms by surprise. Genomic Health, for example, had been offering Oncotype Dx through its CLIA-approved lab since 2004, and a number of other firms, such as Combimatrix Molecular Diagnostics, have been actively developing genomic-based diagnostics with the intent of marketing them as homebrew tests under CLIA rules.

“We’re able to get the same answer with fewer genes, so we can put this in a kit and sell it to reference laboratories. So where they are a reference laboratory and a service provider, we are a discoverer, developer, manufacturer, and distributor of kits.”

This week, FDA announced that it had cleared Agendia’s MammaPrint as the first IVDMIA device. While Amsterdam-based Agendia hailed the clearance as a milestone in its bid to operate in the US market, other diagnostic firms spoke up against the FDA’s involvement in this area.
Power in Numbers
Two days after Agendia announced MammaPrint’s 510(k) clearance, and on the same day FDA was hosting a public meeting to discuss stakeholder concerns over the IVDMIA guidance, a group of 28 diagnostic firms, clinical labs, and other industry players announced that they had formed a consortium to ask the FDA to reconsider its IVDMIA plans.
The consortium, which calls itself the Coalition for 21st Century Medicine, said in a statement that if the guidance is implemented as drafted, “vital medical tests may become unavailable, innovation and improvements could be impeded, the cost of research and development could rise, and insurance coverage for laboratory tests could erode or disappear.”
The coalition includes Genomic Health, Combimatrix, Nanogen, Bio-Rad, Ciphergen, Expression Analysis, Sequenom, and other biotech and medical research and equipment companies. 
Exagen’s McClintic, who spoke to BioInform from the FDA’s IVDMIA meeting on Thursday, acknowledged that his firm is clearly a minority in the genomic diagnostic industry. “There have been 20 speakers already and the majority of them are dead set against any kind of regulation,” McClintic said. “Nobody likes regulation, but we spoke entirely for it because it fits our business model like a glove. Everything that was in that FDA guidance, we were already doing.”
He noted that the FDA clearance of Agendia’s MammaPrint should help Exagen as well by clearing a path through the regulatory agency for future IVDMIAs. “They did some groundwork for us and that’s going to probably trim about 60 days off of our process because they’ve done it and they’ve now become the predicate device,” McClintic said.
“For a company like ourselves, these guidelines are good because we know how to build the tests with very few bets,” McClintic said.
He noted that with the exception of Agendia, which still offers MammaPrint as a service from its lab in Amsterdam, rather than marketing it directly to reference labs, “we don’t think that there is going to be any other competition [regarding FDA-approved IVDMIAs] for quite awhile.”
McClintic said that Exagen plans to file its breast cancer test with the FDA within 60 days. After that, he said the company has two tests for inflammatory bowel disease and a second breast cancer test in the pipeline that should be in clinical trials in the first half of the year.

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