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Recent CDx, NGS Deals Signal Siemens' Increasing Interest in Genomics Arena

By Tony Fong

NEW YORK (GenomeWeb News) – As companion diagnostics gain acceptance within the pharmaceutical sector and next-generation sequencing progresses toward clinical applications, Siemens is seeking a bigger role in the genomics space.

In the past few months, the German-based electronics company has announced three deals that signal its renewed interest in genomics after largely being a spectator in recent years. Last month, it entered into an agreement with UK-based ViiV Healthcare to develop a companion diagnostic for evaluating patients who may benefit the most from an HIV treatment.

At the same time, it obtained the rights from Tocagen to commercialize a companion diagnostic for the San Diego firm's gene therapy for primary brain cancer. And in November, Siemens said it would make its molecular HIV tests compatible with Illumina's MiSeq platform under a partnership between the firms.

Until about three years ago, Siemens had been active in the 'omics space, forging several partnerships, including ones with Laboratory Corporation of America; Beckman Coulter, which is now part of Danaher; and Celera, now part of Quest Diagnostics. It also established a molecular diagnostics laboratory in Germany.

Since then, however, while Siemens is repeatedly mentioned as a possible buyer whenever a life science tools firm is up for sale, the company has kept a relatively low profile in the 'omics space. But as the results of the Human Genome Project begin to have some impact on the practice of medicine, Siemens is joining a handful of other large, diversified firms that are poised to increase their presence in the genomics space.

With the ViiV, Tocagen, and Illumina deals, Siemens is telling the genomics market that it is "ready to play," Harry Glorikian, founder and managing partner of Scientia Advisors, said.

According to Trevor Hawkins, head of next-generation diagnostics at Siemens Healthcare Diagnostics, the deals represent starting points for the company, catalyzed by what it sees as new phases in genomics technology development and a growing acceptance of the technology by both pharma/biotech and the clinical world.

Hawkins declined to disclose the level of Siemens' investment in its diagnostics operations. Overall, R&D in Siemens Healthcare reached €1.2 billion ($1.59 billion) in fiscal 2011 ended Sept. 30, 2011, or 31 percent of the €3.93 billion spent on R&D companywide.

The Healthcare business generated €12.52 billion in revenues in 2011, or 17 percent of total revenues of €73.52 billion. Within Healthcare, Diagnostics generated €3.67 billion in revenues during the year, unchanged from fiscal 2010.

While Siemens has an established medical imaging and in vitro diagnostics business, the ViiV and Tocagen deals are Siemens' first forays into companion diagnostics, fueled by growing adoption of such tools by drug developers, Hawkins said.

"We feel that pharmaceutical companies are now receptive to the use of diagnostics as an empowering tool for improved therapeutics," he told GenomeWeb Daily News recently, "and we felt that Siemens is rather unique in that we can offer the entire spectrum of capabilities of companion diagnostics," from assay design to clinical trials to assay commercialization.

Siemens has experience working with various types of assays, including immunoassays and molecular-based assays, he added, as well as different technologies. Its collaboration with Tocagen, for example, includes both molecular and immunoassays, and will encompass mass spectrometry and PCR technology, Hawkins said.

Also, as imaging increasingly plays a larger role in companion diagnostics, Siemens is positioned to leverage its expertise in that area, "and we look forward to bringing together the in vivo and in vitro components as a single solution in the companion diagnostics arena," he said.

In addition to ViiV and Tocagen, Siemens is working with other pharma firms in the companion diagnostics space, though Hawkins did not elaborate.

According to Glorikian, Siemens recent activity is a clear indication that it is "willing to make deals to gain access to the technologies and content that are going to be driving diagnostics growth for the next decade or so," he said in an e-mail to GWDN. "Every diagnostics company needs a strategy here and these deals are signs that Siemens is executing on theirs."

He added that while the company may have been less conspicuous in the genomics market in recent years, it may have been due not to a lack of interest but rather because of internal work directed at integrating other healthcare-related acquisitions, managing a challenging economic environment, especially in imaging, and addressing opportunities in healthcare informatics.

Stepping into Next-generation Sequencing

In the same way that Siemens views the ViiV and Tocagen transactions as the seeds of a companion diagnostics business, Siemens views its partnership with Illumina as an initial step toward adopting next-generation sequencing for clinical assay development.

The deal focuses on making Siemens' Trugene HIV-1 molecular tests compatible with Illumina's MiSeq benchtop sequencer. The test, which has been on the market for about a decade, was the first DNA sequencing-based HIV test approved by the US Food and Drug Administration.

Trugene is based on a technology called slab gel sequencing, and while the test has been "a really good product," Siemens believes that next-gen sequencing will be a transformational technology, Hawkins said, and the company "really needed to be part of the conversation around how next-gen [sequencing] was going to impact clinical diagnostics."

Trugene, he said, offered Siemens a "great example" of what it would take to move an existing assay onto a new technology platform, and in the process shed light on how next-gen sequencing could have clinical use.

While next-gen sequencing has generated a tremendous amount of buzz in the research community, it has had limited use in the clinic, and it may still be several more years before clinical adoption occurs in any meaningful way. Recently, Quintin Lai, an analyst at RW Baird, said in a research note that broad use of the technology will take time as hurdles such as regulatory and payor support, and as well as cost, still need to be addressed.

Attendees at the Future of Genomic Medicine conference earlier this month expressed doubt that the clinical $1000 genome was obtainable in the near term because although sequencing costs are going down, the "all-in" costs including training and interpretation remain high enough to keep clinical sequencing prohibitively expensive, Lai said.

Additionally, Hawkins said that other issues, such as how regulators will view the technology in the clinic, the quality of the data, the laboratory workflow, and how the data should be interpreted and analyzed, still need to be addressed.

Siemens has programs seeking to tackle many of these questions, and its deal with Illumina is expected to provide some answers, at least in relation to the Trugene assay, Hawkins said.

Illumina is fighting to prevent a $5.7 billion hostile takeover by Roche, which launched its bid for the company in January. A spokesperson for Siemens told GWDN that a potential deal has no effect on its partnership with the sequencing technology firm, which it regards as "as a key element toward providing our customers with a broad, high-quality menu of solutions that address their laboratory diagnostic testing needs."

Siemens is in discussions with the FDA about its plans to move Trugene onto the MiSeq system, and it is comparing patients samples run side by side on Trugene and on a next-gen sequencing-based test. Within the next 12 months, Siemens hopes to move into formal clinical trials for the test and then to submit a regulatory filing, Hawkins said.

He added that in addition to the Trugene test, "we wholly anticipate future assays to be moved over onto next-generation sequencing as well as completely new assays that next-gen sequencing empowers," such as oncology assays.

Maturing Ecosystem

Siemens' renewed push into genomics comes at a time when other large, diversified firms that play in the space are also strategizing to increase their presence. An official with Novartis, for example, told GWDN in December that companion diagnostics is a key strategic focus for that company. A year ago, a Johnson & Johnson executive also outlined that firm's molecular diagnostics strategy.

Scientia's Glorikian said that companies such as Siemens want to see "a level of maturity in an ecosystem," so that they can understand the rules of the game.

"What we’ve seen recently is that the genomics ecosystem, particularly the companion diagnostics area, is slowly becoming better understood," he told GWDN. "Pharmaceutical firms are more actively seeking diagnostics partners … [and] regulatory requirements are becoming better understood.

"We believe that any organization that is serious about having a molecular diagnostics business has to be thinking about their companion diagnostics programs. But it is easier said than done," he added. "There is a level of complexity in the companion arena that most organizations may not appreciate yet."

Hawkins said that for Siemens it also is a matter of clinical value. More than a decade after the first draft of the Human Genome Project was released, "we've gone through the early research phases, and now we're starting to really see the clinical relevance of individual genes, and gene clusters and signatures, and how they are linked to disease," Hawkins said.

"We see molecular as an important part of diagnostics, and we see more and more molecular is a piece of the [clinical] equation," he added. "This is a jigsaw puzzle that you are building here when you're trying to give informed information to the physician, and … at Siemens we see molecular as a very important piece of the diagnostic equation going forward."

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