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Q&A: New Novartis Dx President Discusses Nucleic Acid Testing, Blood Screening Business

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CarstenNovartis.jpgNAME: Carsten Schroeder

POSITION: Global Head of Diagnostics, Novartis Vaccines and Diagnostics

As the recently appointed president of Novartis Diagnostics, Carsten Schroeder oversees global operations for a unit within Novartis Vaccines and Diagnostics that employs nearly 1,000 people worldwide and, according to the company, is rapidly growing.

Novartis Diagnostics' nucleic acid amplification tests, which the company develops and markets with Gen-Probe for use on the Tigris and Panther testing systems, screen millions of blood donations around the world each year for pathogens such as HIV, hepatitis B, hepatitis C, and West Nile virus. Currently, more than 80 percent of the US blood supply is screened using Novartis Diagnostics and Gen-Probe systems to make sure they are safe for transfusion or use in other blood products, the company said.

Schroeder took on his new role in October after previously serving as vice president of commercial operations for Novartis Diagnostics' branch in Basel, Switzerland, where he was responsible for geographic expansion in Saudi Arabia, Russia, and Iran, and increasing adoption of individual donor nucleic acid screening with Novartis' blood screening products in France, Poland, Spain, Italy, Scandinavia, and South Africa.

PCR Insider spoke with Schroeder this week about the diagnostics unit's role within Novartis; the company's ongoing partnership with Gen-Probe; and some future directions for the division. Following is an edited transcript of the interview.


How long has the Novartis Dx unit been in business? Was it originally formed to accommodate the Gen-Probe blood screening partnership?

Since we bought Chiron [in 2006]. What Chiron used to be flowed into the division that is now called Novartis Vaccines and Diagnostics, and officially that division is based in Cambridge, [Mass.,] headed by CEO [Andrin Oswald]. Then, within that division, there is Novartis Dx, which is essentially here in Emeryville, [Calif.,] … for antigen production, which is a joint business with Ortho-Clinical Diagnostics. And then there is the blood screening piece, which is the partnership with Gen-Probe. [Novartis Dx] is not a legal entity that publishes results independently. It is part of the [Novartis] Vaccines and Diagnostics division.

How have your responsibilities changed now compared with what you were doing with Novartis Dx in Basel?

The [Basel-based] regional role is essentially focused [only] on the [nucleic acid testing] side … whereas the role here is larger. On the NAT side we have three regions – one for Europe, Middle East, and Africa; one for the Americas; and one for [Asia-Pacific]. In addition to that I have other support functions – supply chain, quality, regulatory, scientific affairs, plus obviously finance and HR. And we have a production site here … for the antigens [and immunoassays]. And then on the side, I am responsible for a committee to see where we want to expand, which building do we lease or buy, what capacity [is needed], how can we attract more research activities to Emeryville, things like that.

Can you further distinguish what the Dx unit does versus the Novartis MDx unit [profiled in December by PCR Insider sister publication GenomeWeb Daily News]?

The MDx unit sits within the pharma division, and is tasked with developing what is known either as personalized medicine or companion diagnostics. Even the board of Novartis has asked that same question as recently as last year … of whether it makes sense to have two units that have diagnostics in the name … or whether we should merge all this together. But our focus is very different, and for the time being it makes sense to leave us separate. If Novartis throws [the units] together, we will only achieve dilution of efforts and inefficiencies. So both units asked the board to leave us separate, but to ask the question again every two years or so – and that's what they are doing.

So besides immunoassays, the Dx side exclusively works in the area of blood testing and NAT for infectious diseases, right?

It's all blood testing … and for the most part it's just infectious disease. We have one venture that is strictly speaking a little outside that scope.

How much of what the division does now is focused on the Gen-Probe blood screening partnership and/or other nucleic acid testing versus immunoassays?

The three regional units only do nucleic acid testing. They don't do immunoassays, which are run here out of Emeryville. NAT is a relatively high-maintenance, high-support business [in regards to] training the operators, installing machines, and making sure they run smoothly. Percentage-wise, the NAT business is probably 60 percent of [Novartis Dx's total business].

What are your thoughts about the direction of industry in general … regarding NAT versus immunoassays for infectious disease testing? Is Novartis following an industry trend?

The immunoassay market is pretty flat. It doesn't have double-digit growth anymore. It's become more of a high-volume, low-price kind of market. The NAT side is growing, and that is actually driven by mostly what we call geographic expansion in countries like India, China, and Indonesia … where NAT is now introduced pretty much consistently in addition to serology. The blood supply in China, for instance, if you take a total of 10 or 11 million donations … you'll see about 1 million of those tested with NAT. That still makes 10 million or so not tested using NAT, but we are actively engaging with the decision-makers at China's [Ministry of Health] to find ways to move toward 2 million, 3 million, or more donations tested [using NAT].

What is the current status of the Gen-Probe blood screening collaboration?

The collaboration was extended [and expanded] in 2009, and it runs until 2025, so it's a very long-term contract. Novartis is essentially the commercialization arm, and Gen-Probe is the manufacturer and the R&D arm for blood screening. We have a governance process that consists of an operating committee and supervisory board … and we collectively agree on development projects for the coming year, for instance.

What is the current lineup of blood screening tests offered by Novartis and Gen-Probe?

We have the [Procleix] Ultrio, Ultrio Plus, and Ultrio Elite assays. Ultrio tests for HIV-1 in two [separate genomic] regions; hepatitis B and hepatitis C. Ultrio Plus does the same but has a higher sensitivity for hepatitis B. Ultrio Elite, which is not yet on the market, but will be later this year, is Ultrio Plus with an additional test for HIV-2. And we also have a West Nile virus assay, which is a seasonal virus.

How much of your business is in developing regions of the world versus more industrialized nations?

If you look at the splits both from a dollar perspective and from a worldwide perspective, most developed markets test with serology and NAT; while most developing countries test minimally with serology, but more and more … such as Malaysia, India, China, Indonesia … they are now introducing NAT in addition to serology.

How does Novartis Dx approach sales and marketing for the developing world versus more industrialized nations? How do you ensure that the largest number of people receive these tests while still maintaining a profit?

We have pretty sound scientific arguments in favor of adding NAT to existing serology testing. We spend a fair amount of time educating decision-makers in these emerging markets, to convince them that NAT is for the greater good of the overall healthcare in a particular country.

[One example of successful introduction of NAT is the South African National Blood Service] which introduced NAT technology in late 2005, and [last year] they presented a view of five years of NAT testing and compared the results to serology … and found that they would have missed about 100 [HIV infections] if they had only tested with serology during that period (PCR Insider, 7/28/2011). [Ravi Reddy], the COO of the SANBS and lead author of that study … has noted that since introduction of NAT testing in South Africa, he doesn't know of any cases of HIV transmission via blood donations, and that is in a population in which [about 11 percent] of the population is infected.

What do you have in the pipeline for blood screening test development? Novartis Dx and Gen-Probe recently disclosed they were developing a test for Dengue fever, correct?

Yes. This will go into investigational studies in the US later this year. It is not yet entirely clear whether the Dengue virus gets transmitted via blood. Most people believe it does, but we want to do this investigational study first. This is one of the emerging viruses that the scientific community has been talking to us about developing an assay for.

The [xenotropic murine leukemia virus that was linked to chronic fatigue syndrome] was the buzz virus in blood screening last year, and it took a lot of attention away from others before it sort of deflated (PCR Insider 1/5/12 and 6/9/2011).

Any other areas on the horizon?

Yes, one virus that has received more and more attention over the past several years is the hepatitis E virus.

And that's something Novartis Dx has begun looking at, as well?

Yes.

Any plans for the Dx unit to move beyond blood testing into other NAT areas?

For the time being, no. We are very much focused on blood screening and immunoassay production, and NAT commercialization. But in any corporation, nothing is ever final.

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