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Aggressive Acquisition Strategy Fills Out Roche's Pipeline of Dx Tests and Platforms

NEW YORK (GenomeWeb) – Roche's molecular diagnostics business strategy is benefiting from a series of acquisitions designed to advance the firm's penetration of clinical sequencing, and a number of these acquisitions are on track and in line with the company's expectations, said Paul Brown, head of Roche molecular solutions, during a presentation to analysts and investors earlier this month at the American Association for Clinical Chemistry Annual Scientific Meeting & Clinical Lab Expo.

The firm's broad diagnostics portfolio includes a number of important technologies such as liquid biopsy tests for non-small cell lung cancer, a non-invasive prenatal test, and PCR-based point-of-care diagnostics, among others.

"If we want to succeed in the clinical sequencing arena, we need to have an end-to-end value proposition that will meet the needs of our customer base," Brown said, "and within that end-to-end requirement we need improved sample preparation, we need, of course, a sequencer to do the sequencing itself, we need menu, and last but not least we need strong informatics to generate actionable data from the information being analyzed."

With those objectives in mind, the firm acquired a number of companies within the past two years including CAPP Medical, Signature Diagnostics, and Ariosa Diagnostics to expand its menu. It also acquired nanopore sequencing firm Genia, and inked collaborations with sequencing tech firms Pacific Biosciences and Stratos. And it acquired Kapa Biosystems, Lumora, AbVitro, and MilliSect to bolster its sample preparation capabilities, and Bina Technologies for its informatics.

Brown said that before the end of this year, the firm will make available for research use only a liquid biopsy test for circulating tumor DNA that's used for cancer therapy selection and monitoring. The firm became the owner of the test through the acquisition of Stanford University spinout CAPP Medical in 2015.

The test won't be Roche's first foray into the liquid biopsy market, however. In June, its EGFR Mutation Test v2, which detects EGFR mutations associated with non-small cell lung cancers, became the first blood-based genetic test for NSCLC-related mutations approved by the US Food and Drug Administration.

Roche is also advancing its rapid PCR technology, and earlier this month received 510(k) clearance from FDA as well as a CLIA waiver for a point-of-care molecular test to detect and distinguish influenza A, influenza B, and respiratory syncytial virus. The molecular test, the Cobas Influenza A/B & RSV, runs on Roche's Liat system, a rapid PCR-based platform that also runs waived assays for Group A Strep and flu A/B alone, and takes 20 minutes from sample to result.

"The upcoming flu season in the US is really our opportunity to increase the number of placements and to start to drive revenue," Brown said. "There's a long list of requests coming in from customers, and I have the luxurious problem of prioritizing which one we do first. Our first priority is to help expand the menu so that we can be successful in the US market. MRSA and C diff. are pretty close to CE market launch."

Roche's Geneweave platform and technology, which enables identification of multidrug-resistant organisms and assessment of antibiotic susceptibility, is another key part of its product portfolio that should launch, Brown said. Roche acquired the platform from GeneWeave Biosciences in 2015 and said at that time that the technology could address a blind spot in its molecular diagnostic offerings. Roche said then that it hoped that GeneWeave's technology would succeed where PCR fails in providing rule-in answers about antibiotic resistance in bacterial infections.

GeneWeave is a fully automated in vitro diagnostic platform designed to do both identification testing and antibiotic susceptibility testing with live-cell assays (in contrast to PCR or sequencing, where the cells are lysed to look at the molecular components).

"We were very clear about the market for antimicrobial susceptibility testing when we had a look at it," Brown said during the analyst and investor presentation. "We knew that we would not be able to compete effectively in the marketplace with PCR technology and that we needed a new way to look at AST. GeneWeave technology does just that for us. We've started clinical trials, and we look forward to launching this technology into the marketplace."

The addressable market for tests that could run on the GeneWeave platform is CHF 2 billion ($2.1 billion), according to Roche. Methicillin-resistant Staphylococcus aureus will be the first test launched on the platform. Tests for carbapenem-resistant Enterobacteriaceae, fluoroquinolone-resistant Enterococci, and vancomycin-resistant Enterococci are also in development.

The firm's Ariosa Diagnostics acquisition in 2015 provided Roche with the Harmony Prenatal Test, a blood screening test for trisomies 21, 18, and 13, and access to the fast-growing noninvasive prenatal testing market. The test received a boost from the American College of Medical Genetics and Genomics, Brown said, when the organization recently released an updated position statement on noninvasive prenatal screening for detection of fetal aneuploidy, addressing questions about the expanded role of NIPT in prenatal practice.  

ACMG's position statement makes it "very clear that NIPT testing should be recommended for all pregnant women, including not just high-risk pregnancies but all pregnancies," Brown said. "In our minds, one of the most important outcomes is the recommendation that when you do NIPT testing, you must measure fetal fraction, and that's a very important characteristic of the Harmony test."

Brown described a two-pronged business model for Harmony that includes a test send-out business, in which testing is completed in Ariosa's labs in San Jose, California, and technology transfer, especially in Europe, to Roche customers who perform the tests themselves.

According to Roche, the global market for in vitro diagnostics is worth around $52 billion and is growing at a pace between 3 and 4 percent — though the molecular portion of the market is believed to be growing at around 10 percent. Roche estimates that it holds approximately 20 percent of the Dx market, with its next nearest competitors being Abbott at 11 percent and Siemens at 9 percent. In the US market, Roche said it has a 13 percent share.

"Our business model is built around having a closed system with our instruments, with revenue coming predominantly from reagent pull-through on those instruments," Brown said. "Across the customer base we are present in every segment from the patient to the centralized lab and high-volume, high-throughput testing. What we believe is our competitive advantage in the marketplace, and it's something we work very hard to maintain, is our technology and our reach."