In the first part of this two-part story, GenomeWeb spoke with commercial developers, end users, and federal regulators to understand whether the animal health market is a parallel path or a parallel universe in MDx. Part two of the story can be read here.
NEW YORK (GenomeWeb) – Detecting pathogens' nucleic acids by using molecular techniques is an active, growing market segment in healthcare, and this is true for both humans and non-human animals.
Whether a blood sample is from a person or a pig, molecular diagnostics, particularly PCR-based assays for infectious diseases, theoretically work the same way. Thus, animal health might seem a logical untapped market for a diagnostics company wishing to expand its portfolio.
Although some diagnostics companies, like Idexx, specialize exclusively in animals, a few large companies, such as Qiagen and Thermo Fisher Scientific, pursue parallel paths of veterinary and human diagnostics development.
Smaller companies, too, like Madison, Wisc.-based Lucigen and Rockville, Maryland-based Tetracore, aim to serve these markets via parallel, sometimes overlapping, product development.
Yet extreme, unpredictable swings in customers' profitability margins and nuances in the regulation of animal diagnostics by the US Department of Agriculture make the animal health landscape rather different than the human one.
In recent interviews with GenomeWeb, executives at Thermo Fisher, Lucigen, and Tetracore described their animal health diagnostics businesses, suggesting that flow between the two areas can ultimately enhance each of them.
Same tests, different customers and constraints
Molecular diagnostics intended for animal use are marketed to veterinary diagnostics labs. Like clinical labs on the human side, these are staffed by experts in molecular biology techniques. They perform bacterial and viral culture, ELISA assays, histology, and genomic analyses to hunt down pathogens. These diagnostics labs then report their results to veterinarians or animal health agencies.
In emails with GenomeWeb, representatives of the American Association of Veterinary Laboratory Diagnosticians (AAVLD) and members of the Method Technical Working Group of the National Animal Health Laboratory Network (NAHLN) said that veterinary diagnostics labs frequently use PCR-based assays to detect endemic diseases.
Vet labs are extremely mindful of costs, however, and the groups noted in a statement that "in the past five years, veterinary diagnosticians have developed multiplexed PCR assays based on clinical signs … as a cost-saving measure." Labs have also developed Luminex and microarray assays for disease syndromes, but this is less common. Additionally, "most large veterinary diagnostic laboratories have launched development programs with the goal of incorporating next-generation sequencing techniques into their assay portfolio, [and] NGS techniques and multiplex platforms will likely be the biggest growth area in veterinary diagnostics in the coming years."
Established in response to post-9/11 bioterrorism threats, in addition to their work on endemic diseases, the 62 labs in the NAHLN lab network also participate in surveillance for foreign animal diseases and emerging diseases using standardized real-time PCR assays, the groups said.
Overall, then, the animal health market includes diagnostics designed to detect diseases affecting companion animals, such as dogs and cats, and ones used to surveil wild animals for zoonotic diseases, like influenza or West Nile virus, which are thought to account for up to three quarters of newly emerging infectious diseases of people. A large proportion of the market also serves the needs of agricultural veterinary diagnostic labs, helping to ensure healthy farm animals and food production.
According to MarketsandMarkets, this global animal health diagnostics market is poised to reach $4.2 billion by 2018.
In theory, the patient population in this market is huge. In the US, the approximately 164 million household pets, 9 million horses, 9 million dairy cows, 87 million head of cattle, and 110 million hogs raised for food alone rival the 320 million-person population. An additional 8 billion chickens slated to be consumed this year tip the balance.
If some proportion of these animals requires molecular diagnostic testing each year, the animal healthcare market could be comparable to that for humans. However, at least on the agricultural side, patients are also considered inventory, and they can be put down to stop the spread of infection or if testing costs exceed what an animal is worth to its owner.
Flow between business segments
Comparing nucleic acid amplification testing in animals and humans, Martin Guillet, global head and general manager of animal health at Thermo Fisher, explained that "exactly the same processes, workflow, and chemistry [are] being used for sample prep and extraction [for] a real-time PCR reaction, and the same platforms are being used."
Thermo Fisher supplies both instrumentation and chemistry to veterinary diagnostics labs, he said.
The company also works with government programs to monitor notifiable and reportable diseases, such as influenza B in birds, foot and mouth disease, classical swine fever, African swine fever, and tuberculosis. The latter is particularly important to track, since recent research suggests infection of people via zoonotic reservoir species (which can include cows and elephants), may more frequently result in as extra-pulmonary TB.
"The beauty of our business is we're able to leverage everything that's being done by Thermo Fisher Scientific on the human side, and all the advances that are coming out … we can transfer over to the animal side," Guillet said.
Although somewhat less common, the flow of innovation can also go in the other direction. Guillet said influenza testing may be one example of "cross-fostering" at Thermo, and that zoonotic illnesses are "largely shared now between the animal health, food safety, and human health." He cited salmonella testing for birds, poultry, and people, and E. coli testing for cattle, beef, and human patients as examples of inter-relatedness that the company fosters and leverages.
"Our customers are the labs, but we're collaborating with the entire industry value chain to make sure that we understand the needs and that we're in the best position to answer those needs," Guillet said.
Molecular biology firm Lucigen also pursues inter-related diagnostics development tracks. That firm is founded on a unique technology; a polymerase it calls OmniAmp which happens to have endogenous reverse transcriptase properties.
"Our strategy is to leverage our core technology across market segments," Hemanth Shenoi, Lucigen director of business development, said in an email.
In animal health, the firm is focusing on porcine disease diagnostics, Shenoi said. In parallel, Lucigen has also been developing a point-of-care viral hemorrhagic fever assay for humans, and is pursuing Emergency Use Authorization from the US Food and Drug Administration for an Ebola test.
Lessons learned from one test development project ― in terms of assays, as well as hardware and consumables ― can directly benefit the other he said, adding that this approach "shortens the development timeline, reduces risk, and adds cost efficiencies to product development."
Similarly, diagnostics firm Tetracore has been developing PCR-based assays for biological warfare agents as well as infectious diseases in humans and animals for about 20 years, according to Co-founder and CEO Bill Nelson, and has about 70 employees. The firm uses products from other manufacturers ― polymerases and chemistries from Bioline, Qiagen, and Thermo Fisher, Nelson said ― and develops PCR-based assays which it then markets primarily to veterinary diagnostics labs serving the livestock industry.
Nelson noted that this diagnostics domain, compared to that for people, or even companion animals, has especially "tight margins in profitability."
This is partly because pig farmers and cattle producers have narrow margins as well. There can be lean years, he explained, which ultimately results in an "enormous difference" in the price of agricultural veterinary diagnostics versus the human diagnostics that the company also manufactures.
In other words, in the veterinary market, "We're not making much per test; it's the nature of this business that we're selling in to," Nelson said.
Comparative anatomy of federal regulations
Tight profit margins also seem to influence whether or not a company chooses to pursue licensure via the USDA.
Analogous to the US Food and Drug Administration regulation of human diagnostics, the USDA's Animal and Plant Health Inspection Service division's Center for Veterinary Biologics (CVB) can issue licenses for animal diagnostics.
On the human side, assays are submitted to FDA for clearance or approval prior to becoming commercially available for use by labs. Running a lab-developed test, or LDT, in a CLIA-certified lab is currently an alternate commercial pathway.
But where the FDA has an ever-expanding list of cleared molecular in vitro diagnostics, the USDA has only ever issued a handful of licenses for molecular assays. All of the hundreds of other molecular tests used by veterinary diagnostics labs are either "home brew" LDTs, or are sold by companies as individual reagents.
The CVB's authority to regulate molecular diagnostics comes from something called the Virus, Serum, and Toxin Act of 1913, which declared it illegal to sell or distribute "worthless, dangerous, contaminated, or harmful products," explained CVB director Byron Rippke in an interview. The center regulates vaccines, toxins, antiserums, antibody products, and immunomodulators, among other veterinary products for animals. "Diagnostics are part of that equation, they're considered to be an analogous product under the regs, and so we've regulated them," he said.
There are only six USDA-licensed molecular tests among the list of licensed veterinary biological products. Four of these ― PCR test kits to detect avian influenza virus, bovine virus diarrhea RNA, swine influenza virus, and DNA of a parasite called trichomonas foetus ― are manufactured by Thermo Fisher's Life Technologies brand, while two ― test kits for classical swine fever RNA, and Mycobacterium paratuberculosis, the causative agent of Johne's disease ― are made by Tetracore.
For molecular diagnostics, the CVB licenses what are called kits, Rippke explained.
Kits for general sale and distribution must contain all reagents as well as complete instructions. "The idea is that somebody who is relatively competent in laboratory practices could pick up that test and run it start to finish, including the interpretation of the result, without a whole lot of intervention," he said.
Kits are advantageous to end users, and are often the assay of choice in NAHLN labs. A USDA-approved kit, with "an approved claim, a standardized set of instructions, a standardized set of reagents, and a standard way to interpret that test," can also have cache with international users, Rippke noted.
But, "unlike a FDA 510(k), the USDA licensing process also involves review of manufacturing processes and facility inspection" prior to clearance, Lucigen's Shenoi noted.
As his company has one of the few facilities that is currently inspected by both the FDA and the USDA, Tetracore’s Nelson noted how the animal health commercial dynamics contrast with current concerns at the FDA over LDTs. "The FDA says there are issues with the way things are currently operating, or they feel that there are potential problems … [but] within the USDA and animal veterinary arena, that is a major process by which laboratories test for things," he pointed out.
In the animal health market, then, it turns out that understanding what constitutes a kit is key. "It's splitting hairs in one sense, but it isn't," Nelson said. "You can't provide instructions, you can't provide controls … so we develop primer and probe sets, we put them into chemistry, and as long as you follow certain guidelines you can stay on the [reagent] side of the fence." A licensed kit can also claim it is testing for a disease while reagents are only for detecting a pathogen, he explained.
Unable to sell a complete set of reagents and instructions without a license in the US, yet knowing that a PCR-based test can sometimes succeed or fail depending on reagent variability, Tetracore buys up lots of components from its suppliers to ensure customers get a reliable product.
Another important point is that USDA-licensed kits need to be re-inspected whenever they are tweaked, Nelson noted.
"If I produce a product for the FDA, I follow current good manufacturing practices which are spelled out in the code of federal regulations, [but] there is no process like that for USDA; they don't have the same kind of cover of federal law," he explained.
"If I make a product for the FDA, I can make changes as long as I document them … make small tweaks ... The way the USDA works is that they clear everything that I make. I can't make a product and release it, which I can for FDA."
For instance, he noted, if Tetracore makes a new batch of RedLine Alert, its FDA-cleared lateral flow immunoassay for anthrax, and it meets all the criteria, "I can start selling it, and when the FDA comes to inspect they will look at the records and agree or not. But with the USDA, if I make a classical swine fever [kit], I have to send them the test, they test it and say OK, it's good, and now I can release it to sell," Nelson said. "That's not an efficient process," he added.
"We were the first people to license a real-time PCR assay through the USDA," Tetracore's Nelson said, but noted that the company stopped going this route after its second kit was licensed.
"From an economic standpoint, it is not necessarily a good proposal," he said. "It's a balancing act, and you hope over the long term you'll recoup that cost of getting the licensure versus selling it as a reagent."
The PEDv epidemic
This past summer, porcine epidemic diarrhea virus, or PEDv, swept through the USswine industry. Highly virulent and contagious, the virus had killed 5 million pigs by July, according to many published reports. It is not zoonotic, and does not affect people or food safety, but it has up to 100 percent morbidity and a mortality rate of around 95 percent in newborn piglets, according to a 2013 study in the Journal of Veterinary Diagnostic Investigation.
PED was first spotted in the USin 2013. The current outbreak is thought to have originated in China. The culprit is a coronavirus with an RNA genome. It has been sequenced, and the epidemic in the US seems to be the result of three strains, as recently reported in Emerging Infectious Diseases. The transmission route is thought to be oral-fecal, but it can be airborne, and has been detected up to 10 miles downwind of infected farms. It was also recently shown capable of infecting immortalized duck intestinal cells, which may ultimately be useful in vaccine development but also raises the possibility that wild birds are reservoirs for the disease, which could lead to potential transmission between birds and swine and reassortment similar to H1N1 pandemic influenza.
While attending a conference in China in 2012 on another viral illness ― porcine epidemic respiratory and reproductive syndrome ― Tetracore's Nelson and his colleagues became aware of the PED epidemic in Asia at the time. They raced to put together a PCR-based assay using available sequence data. When the virus began killing piglets at US farms the next year, they were ready with what was actually the first multiplexed PCR diagnostic in the animal health space, Nelson said.
The test distinguishes between three coronaviruses ― PEDv, transmissible gastroenteritis, and delta coronavirus ― and contains an internal control, helping a veterinarian differentiate the three infections, which can all present as piglet wasting but each result in different infection management strategies for herds.
"RNA viruses change constantly," Nelson explained. "We have to constantly monitor the situation and possibly make little tweaks to [the test]," he said.
This test is not USDA licensed. It is sold as separate reagents in order to comply with federal regulations. Thermo also offers custom reagents for PEDv detection. Lucigen, meanwhile, is working on a PEDv assay that will be a handheld, "penside," test, but has not declared whether it will pursue licensure.
"The speed to which we can react means a lot to the industry," Guillet said, since the PEDv epidemic "wiped out a considerable amount of the inventory in terms of number of heads on the swine production side." Partnering with industry to ensure assays — like Thermo Fisher's influenza tests, for example — are as up to date as possible to catch the new variants "is also core to our business," he said.
Ultimately, Thermo intends to increase the number of tests it has USDA licensed, Guillet said. And Rippke at CVB said he believes the center will likely be seeing more molecular tests in the applications queue, particularly as technology that was funded in response to 9/11 comes to fruition.
Part two of this series will delve deeper into these and other trends in the animal health diagnostics markets, as described by commercial and end-user sources.