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Under New CEO, SQI Prioritizing Drug Development Partnerships with IVD Pipeline as Second String

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After appointing a new CEO this summer, SQI Diagnostics is continuing its focus on services to pharmaceutical partners in providing custom multiplex immunogenicity panels, with its pipeline of in vitro diagnostics assays as a second priority, the company said this week.

SQI announced this June that Andrew Morris, the company's chief financial officer, had assumed the roles of president and CEO. Morris told BioArray News this week that he doesn’t foresee any significant operational or strategic changes for the Toronto-based firm connected with the appointment.

SQI will continue a shift that began in late 2011, he said, which placed its internal diagnostic development efforts on the back burner and focused resources more heavily on its CustomPlex diagnostic tools and services business.

SQI launched CustomPlex two years ago as a service for clients looking to create custom multiplex microarray panels which they could then potentially market as research-use only assays, lab-developed tests, or, with proper regulatory approval, IVDs (BAN 12/6/2011).

Morris said this week that the company's focus on the diagnostics services side has since shifted even more firmly toward working specifically with pharmaceutical and drug development companies.

"I'm not discounting or diminishing the importance of our IVD product development, but as a priority, the drug development space is top," Morris said.

In March, SQI announced a partnership with Algorithme Pharma, a CRO which it has been working with to develop a multiplex assay for immunogenicity testing of heparin and heparin-based biosimilar compounds (BAN 3/26/2013).

In 2012, SQI also said it had contracted with CRO Celerion to develop a proof-of-concept immunogenicity test (BAN 8/28/2012).

Another partnership SQI has disclosed publicly is with Bristol-Myers Squibb, for which it has also developed a custom immunogenicity assay.

SQI and Bristol-Myers Squibb presented a poster at the Bioassays and Bioanalytical Method Development Conference in Berkeley, Calif., last week comparing SQI's platform to a standard enzyme assay as well as another competing multiplexing technology sold by Meso Scale Discovery.

According to the poster, "sensitivity and drug tolerance of the SQI assay [was] equivalent to or better than other assays while providing isotyping and automation," in a four-species test.

Moving forward, Morris said that SQI's custom services will be focused more strictly on deals made directly with pharmaceutical companies and drug developers, rather than those made with contract research organizations.

"With CROs it has become pretty obvious pretty quickly that you have to get drug companies on board first," he said.

Morris said that the sizes of the panels it has created for its current pharmaceutical customers vary. The panel the company developed for BMS is "relatively small," he said. With another unnamed large drug company, he said SQI is working on a 21-plex panel based on interest from the company in a broader profile of immunogenic response to its target drug.

Overall, he said, SQI is working on prototyping assays for two global pharmaceutical companies and two other companies. Agreements with four other firms are in the "negotiation phase," he said.

Though secondary to SQI's current focus on its CustomPlex service agreements, Morris said that the company's internal IVD development efforts are also progressing.

First in line for validation and launch is a new, more current quantitative celiac test, which replaces the company's previous four-plex celiac assay, according to Morris.

"The big push right now is to finish up validation of the celiac test … and we hope to do that this calendar year and then start the regulatory [approval process]," he said.

The FDA cleared SQI's original 4-plex celiac assay in 2011. The agency also cleared a test for rheumatoid arthritis in 2009. SQI has also received Health Canada licenses for both tests.

Following the updated celiac panel will be a vasculitis product, Morris said, and then finally a lupus panel.

SQI had said previously that as it looks to generate revenues through its CustomPlex business segment, the firm had formed a special committee to review strategic alternatives, which could include a possible merger or sale.

When the company announced its third quarter financial results this August, SQI said that in light of the recent commercial progress in its CustomPlex business, the company and its board of directors decided to put that assessment on hold and disband the special committee.

SQI had planned to acquire German array firm Scienion for $15.6 million in 2011, a business combination that would have given SQI a foothold in Europe via Scienion's Dortmud and Berlin-based offices. The deal, however, fell apart when SQI was unable to raise the capital to complete the transaction (BAN 10/11/2011).

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