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With Navigenics Purchase, LifeTech Speeds Entry into Molecular Diagnostics Space


Bernadette Toner provided reporting for this article from Los Angeles.

In acquiring genetic testing services firm Navigenics, Life Technologies has garnered capabilities that will enable it to formally enter the molecular diagnostics space.

The most important asset for Life Tech's future molecular diagnostics plans is Navigenics' CLIA-certified laboratory. Life Tech will use the lab to validate its tests, launch lab-developed tests and FDA-approved kits, and offer genetic testing services to pharmaceutical partners. Additionally, Life Tech will expand Navigenics' physician portal to help doctors interpret the results of its genomic tests.

Life Tech plans to more readily use Navigenics' capabilities to advance molecular diagnostics to personalize cancer care. The transaction gave us "the immediate ability to be in a CLIA lab in 50 states," Ronnie Andrews, president of medical sciences at Life Tech, said at the American Association of Clinical Chemistry annual meeting in Los Angeles this week. The company plans to use the lab to "drop in proprietary LDTs that we know today can have an impact" on cancer diagnostics and therapy selection.

According to Navigenics CEO Vance Vanier, the firm's technology infrastructure, user interfaces, online platforms, genomic support services, and experienced team will "play a central role in the delivery of Life Tech’s molecular diagnostic model." Additionally, Navigenics brings to Life Tech a network of oncologists, pathologists, and genetic counselors that will enable it to educate physicians, patients, and better drive adoption of its molecular diagnostics.

Life Tech and Navigenics haven't yet settled on the exact titles and roles that Navigenics' employees will hold within their parent company, and Life Tech hasn't indicated if there will be any personnel changes following the acquisition.

The acquisition comes while Life Tech has been involved in a flurry of diagnostics collaborations.

In October last year, Life Tech partnered with GlaxoSmithKline to develop a companion test for the drug developer's MAGE-A3 cancer immunotherapy. As reported by PGx Reporter sister publication Clinical Sequencing News, Life Tech is also helping GenProbe garner regulatory clearance for a transplant diagnostic and other assays operating on Life Tech's 3500 Dx Genetic Analyzer capillary electrophoresis sequencer.

Separately, Life Tech is collaborating with Boston Children's Hospital and the Hospital for Sick Children in Toronto to develop next-generation sequencing-based workflows for pediatric diseases research.

The Navigenics transaction is unique in that a life sciences tools vendor has purchased a genomic testing services company. "This deal is a game changer for personalized medicine, and marks first time where you see a marriage of the capability of the research tools that Life Technologies brings with clinical capabilities of Navigenics," Vanier told PGx Reporter. "Life [provides] the tools that has made field of genomics possible and has been focused on the research market, while Navigenics has focused on bringing complex information to physicians in a way they can use it in every day care."

In 2006, Navigenics opened shop as a direct-to-consumer genomics firm that marketed online testing services to assess people's predisposition for various diseases and characterize their pharmacogenetic responses for drugs — similar to services offered by other companies that launched around the same time.

However, after the nascent consumer genomics field faced pushback from the US Food and Drug Administration for marketing what the agency deemed medical tests to consumers without their physicians' involvement, Navigenics abandoned the DTC strategy, choosing to market its genome-wide testing services through doctors' practices and employer groups focused on delivering personalized medicine (PGx Reporter 7/28/2010).

"For the past few years our model has actually been to provide our services through physicians, medical centers, and employer wellness programs," Vanier told PGx Reporter. As a DTC genomics firm, Navigenics marketed two types of genetic testing services: its full suite of genomic screening services for around $1,000, called Health Compass, and a pared down version for $499.

Navigenics was one of the first consumer genomics firms to partner with a physicians' network, MDVIP, to incorporate its DNA analysis services as part of annual physicals (PGx Reporter 02/04/09). The company also marketed its genomic testing services through wellness programs at Cisco, Intel, Scripps, and several other West Coast health and technology companies.

Following the acquisition, Life Tech said that it will honor Navigenics' genetic analysis services contracts with existing customers, but will not take on new customers. "In compliance with existing policies and informed consent, all customer information will be protected and handled according to regulatory guidelines, in alignment with Navigenics' founding principle of protecting the privacy and security of its customers' genetic information," Life Tech ensured in a statement.

Rapid Entrance into MDx

The first tests Life Tech plans to launch through Navigenics' CLIA lab will be for lung, ovarian, and prostate cancer. According to Andrews, in all cases the tests will identify the right treatment path or monitor drug efficacy for patients who fall into "a molecular subclass" of the particular cancer.

Most of Life Tech's tests will be based on qPCR, but the company also plans to launch tests on the Ion PGM sequencing platform outside of the US.

Although Life Tech didn't reveal the acquisition price for the transaction, Andrews noted having garnered Navigenics "at a very attractive price." He reflected that Life Tech could have built its own lab and waited 18 months for certification and licensing. However, in purchasing Navigenics, it was able to "acquire and be licensed in 50 states today."

This timeline is key to Life Tech's strategy of bringing in "early revenue" for its own line of lab-developed tests, Andrews said.

Additionally, Navigenics' physician portal will also be instrumental in driving adoption of Life Tech's tests. The physicians' portal "helps move us forward two to three years in terms of technology development," Andrews said, adding that GE subsidiary Clarient spent three years and between $10 and $12 million to build its physician portal.

More M&A Activity to Come?

Andrews noted at the AACC press conference this week that Navigenics may have initially emerged as a DTC genomics company, but after FDA moved in, they "pivoted" toward a physician-mediated plan.

When several consumer genomics companies received letters from the FDA asking them to explain why their genomic testing services didn't have regulatory approval as medical devices, industry observers predicted that the days were numbered for the burgeoning DTC genomics industry. At the beginning of 2011, Jim Prutow, director of the healthcare business group at PricewaterhouseCoopers' PRTM Management Consulting, had forecasted to PGx Reporter that "there's not going to be a DTC genomics industry in this fashion any more. So, what 23andMe is doing now isn't going to continue long term." (PGx Reporter 1/12/2011)

Currently, the only consumer genetics firms that have withstood regulatory pressure and continued to market their services DTC are 23andMe – which has the most venture funding among all the players in the market – and Icelandic firm Decode Genetics – which managed to emerge from bankruptcy in 2010 and is now focusing on conducting research discovering rare variants associated with common conditions. Meanwhile, Pathway Genomics, like Navigenics, decided to market its services through doctors.

Observing the changing tides in the consumer genomics industry a year ago, Prutow had noted the possibility that the likes of an in vitro diagnostics company, a health technology company, or a large lab might acquire a consumer genomics firm in an effort to "augment their test offerings with some of the offerings at DTC firms." His prediction wasn't that far off, as Life Tech is a life sciences tools vendor that purchased Navigenics to speed its entry into the molecular diagnostics space.

"Navigenics is a … medically endorsed provider of genomics for physicians and individuals in the US and will continue to use that experience in Life’s medical channels," Vanier said. "Navigenics will be shifting its resources to Life Technologies' development of its molecular diagnostic business, and together we will focus on becoming a comprehensive provider of technology and informatics to pathologists and oncologists worldwide."

Whether this acquisition is a sign that more M&A activity is on the horizon among consumer genomics players remains to be seen. 23AndMe, for its part, earlier this month expanded its potential customer base and its ability to conduct genome-wide association studies through the acquisition of CureTogether, a website where patients share qualitative information about more than 500 conditions. The purchase marked 23andMe's first acquisition.

For Life Tech, its purchase of Navigenics represents the first in a series of "small, tuck-in acquisitions" the company is planning over the next two to three months that will allow it "to immediately address unmet medical needs" in various disease areas, Andrews said. Other than oncology, Life Tech will focus on advancing molecular tests in the areas of inherited diseases, infectious diseases, transplantation, and neurology.