Affymetrix believes it stands to benefit from increased US Food and Drug Administration regulation of laboratory-developed tests because several assays that run on its FDA-approved platform have received clearance in the past — a fact that may give it an edge, or at least a head start, in a more regulated molecular-diagnostics environment.
LDTs — homebrew assays offered through laboratories accredited under the Clinical Laboratory Improvement Amendments — have historically been overseen by the US Centers for Medicare and Medicaid Services, but the FDA has recently decided to regulate some of these tests in a risk-based manner.
Though the agency in July held a meeting to discuss its plan to regulate LDTs, it has not yet provided guidelines on what steps labs should take to submit such tests for clearance as in vitro diagnostics.
According to Doug Farrell, vice president of investor relations at Affy, the company could profit from increased regulation of LDTs in general, as its GeneChip platform has already been cleared as a component in two FDA-cleared IVD tests.
"Obviously, the scrutiny of laboratory-developed tests has some people concerned, but we actually think it's an opportunity," said Farrell, who discussed the Santa Clara, Calif.-based company's strategy at the RW Baird Health Care Conference in New York last week.
"The FDA realizes that these tools have real value [and] the question is how to best get those to the marketplace and customers," Farrell said during the conference, which was webcast. "It is our belief that a robust, reliable platform that can make it through an FDA approval process is the best way to go."
To date, two assays that run on Affy's GeneChip platform have received FDA 510(k) clearance. The first, Roche's AmpliChip CYP450 test, won the agency's clearance in 2004. That test uses an Affy array to genotype patients for two cytochrome P450 enzymes: 2D6 and 2C19, which can be used to assess metabolism for a wide array of drugs.
The second test is Pathwork Diagnostics' Tissue of Origin Test. Available since 2008, the IVD relies on an internally discovered gene-expression signature to identify the tumor of origin in patients with cancer of unknown primary (BAN 8/5/2008).
Affymetrix also has at least a dozen diagnostic partners
that are working on tests that will run on Affy's FDA-approved platform. They include such firms as Craigavon, Northern Ireland-based Almac Diagnostics and Taipei, Taiwan-based Vita Genomics. Most recently, Potsdam, Germany-based Signature Diagnostics said that it is developing two tests for colorectal cancer on the Affy platform (BAN 6/29/2010).
Farrell noted that Affy "continues to see interest in its platform for complex diagnostics," adding that the company has its own internal diagnostic-development programs, though he did not elaborate. The company has previously discussed plans to obtain clearance for the clinical use of its technology in the detection of genetic abnormalities (BAN 7/6/2010).
Additionally, during the conference, Chief Financial Officer Timothy Barabe commented on Affy's M&A strategy by saying that the company is in the future "more likely to make acquisitions or investments in the cytogenetics and diagnostics areas" than other areas.
According to Farrell, the likely increased regulation of LDTs could make the company a potential partner for diagnostics firms that want to get their tests to market on a platform that has been cleared before.
"All indications are that the FDA wants to find the appropriate path to make these tests accessible," Farrell said. "The goal is not to tighten up on laboratory-developed tests; it is to make sure that the tools out there are going to be reliable and robust if they are going to be used to make decisions for patients. We see this as an opportunity more than a challenge."