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Luminex Says Q2 xTAG GPP Sales 'Strongest to Date,' Calls BioFire Gastro Test Market Entry a 'Net Positive'

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NEW YORK (GenomeWeb) – Demand for Luminex'sxTAG Gastrointestinal Pathogen Panel continues to increase despite the US Food and Drug Administration's recent clearance of a competitive assay sold by BioMérieux.

In fact, the Austin, Texas-based molecular diagnostics company experienced its greatest amount of GPP sales since the FDA cleared the test early last year, and believes BioMérieux's offering will help to grow the market for multiplex gastrointestinal pathogen testing, rather than siphon off sales, according to Luminex CEO Patrick Balthrop.

"We believe having additional competition in the GPP market will increase overall awareness of the significant benefits of multiplex testing for gastroenteritis, both in terms of the clinical value and economic cost advantage," Balthrop said during a second quarter earnings call this week.

For the three months ended June 30, Luminex reported a 2 percent uptick in revenues, driven by instrument placements, consumables sales, and royalties, and offset by a decline in assay revenues due to the loss of sales to Natural Molecular Testing, a major account that declared bankruptcy last year.

Excluding NMT-related sales in the year-to-year comparison, Luminex's assay revenues grew 6 percent due to growth in demand for the GPP, the xTAG Respiratory Viral Panel, and sales of pharmacogenomic and genetic analysis assay kits to large customers such as Laboratory Corporation of America.

While Luminex has offered in vitro diagnostic assay kits for a number of years, the FDA's clearance of the GPP in early 2013 marked an intensification of its push into the molecular diagnostics market, as the company moved to a direct sales model to support the introduction of the test, which can be used to detect 11 diarrhea-causing pathogens.

"We continued to make good progress in our commercialization efforts for recently launched panels in our assay business, and with GPP we experienced our strongest quarter to-date since receiving FDA clearance," Balthrop said. He noted that the company has taken a number of steps to enable customers to quickly validate the assay prior to introducing it in a clinical setting, and that Luminex's pipeline of GPP account additions "continues to ramp at a strong pace."

The market for multiplex gastrointestinal pathogen testing gained a new competitor in May when BioFire Diagnostics, a BioMérieux company, gained FDA clearance for its 22-target FilmArray Gastrointestinal Panel. Although BioMérieux claims the multiplex PCR assay is the "most comprehensive gastrointestinal test to be cleared by the FDA," with double the targets of the GPP, Balthrop made it clear that Luminex views its bead array-based GPP to be higher throughput and more cost effective.

"The BioFire product, it has a couple of unique features," said Balthrop of the company's competition. "One is that it's very highly priced," he claimed. "It's also very low volume, meaning that there [are] a limited number of tests that one can produce in a shift." Luminex, on the other hand, "continues to be successful, particularly in the high-volume segment because of our high-throughput capabilities," he said. Because of this advantage, Balthrop maintained that Luminex has experienced "minimal competitive pressure in our high-volume accounts" from the FilmArray GI Panel.

Rather, he portrayed the two assays as complementary, with BioFire's assay catering to lower-throughput labs, while the GPP serves laboratories that run greater numbers of samples. Because of this lack of direct competition for accounts, Luminex sees BioFire's assay as possibly expanding the market for multiplex gastrointestinal pathogen diagnostics in general.

"We're serving one volume segment, they're serving the other, and we're both working to educate the market about the benefits of the panel," Balthrop said. "In the short, intermediate term it's actually been a net positive," he said of BioFire's market entry.

In addition to BioFire, Luminex may soon be joined by other firms in its quest to grow the market for such tests. Applied BioCode, a Santa Fe Springs, Calif.-based company, is developing a 16-target gastrointestinal pathogen panel based on its barcoded magnetic beads technology, with the intention of submitting the test to the FDA for review next year.

'Significant amount of visibility'

Sales of the xTAG GPP and other infectious disease assays, such as the xTAG RVP, comprised two thirds of all of Luminex's assay sales in Q2, while genetic analysis test sales made up the remaining third. The latter group of assays consist of Luminex's pharmacogenomics tests as well as diagnostics for inherited genetic conditions, such as cystic fibrosis.

Though Luminex did not recognize revenue from sales of pharmacogenomic tests to NMTC in Q2, causing the assay revenue decline in its year-over-year comparison, it did maintain close ties to Laboratory Corporation of America, which it claims as its "largest customer."

In May, LabCorp announced that it would offer Luminex's FDA-cleared xTAG CYP2D6 Kit to aid clinicians in determining strategies for therapeutics metabolized by the CYP2D6 gene product. Luminex gained FDA clearance for the assay last year.

Because of its relationship with LabCorp, Balthrop said that Luminex has enjoyed a "significant amount of visibility" in the pharmacogenomic testing market of late. At the beginning of the year, Luminex also reorganized its sales force, forming a specialty group specifically focused on selling its pharmacogenomic tests, and Balthrop said that Luminex is "pleased with the trajectory of our pharmacogenomics business as we continue to rebuild the customer base in this market."

The company also continues to enjoy steady reimbursement for its infectious disease and genetic analysis panels. Changes to US reimbursement policies negatively impacted Luminex last year, when some of its customers experienced delays in receiving reimbursement, or lower reimbursement, for tests after the US Centers for Medicare & Medicaid Services moved to the gap-fill process for pricing new codes for molecular diagnostics.

However, given that the 2014 clinical laboratory fee schedule rates for the codes associated with its tests have been now been set, Balthrop said that reimbursement rates are healthy.

"Even more important is the increased confidence and comfort by our customers," said Balthrop. "In the near term, we're optimistic that we'll continue to benefit from these recent developments on the reimbursement landscape as customer sentiment is favorable and order patterns are returning to a more normal level," he said. "And in the long term, we firmly believe that we're very well positioned given these trends."

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