Becton Dickinson, Gen-Probe, and Cepheid last week updated attendees of an investor conference on their development timelines for upcoming nucleic acid testing platforms and assays.
Speaking at the JP Morgan Healthcare Conference in San Francisco, the tool vendors emphasized their plans to launch automated testing platforms intended to reduce the time and complexity of nucleic acid-based molecular diagnostic testing.
Becton Dickinson highlighted the BD Max platform that it plans to launch at the end of 2011. The instrument, built upon an automated PCR technology platform that it acquired as part of its purchase of HandyLab last fall, will be a "complete walkaway system" that will generate 24 real-time results in under two hours, BD CEO Ed Ludwig said in his presentation, which was webcast.
Gen-Probe also touted an upcoming instrument — the Panther — which is an updated version of its current Tigris transcription-mediated amplification platform that will be targeted at "smaller customers than Tigris," CEO Carl Hull said during his presentation.
Panther, which is targeted for launch in Europe by the end of the year and in the US "four or five quarters hence," will have a "smaller footprint, improved reliability, and lower costs" than the Tigris, Hull said.
Cepheid also highlighted the capabilities of its instrumentation — namely the recently launched GeneXpert Infinity automated real-time PCR system, which is a higher-throughput version of the company's flagship GeneXpert platform that can run up to 2,074 tests in a 24-hour period.
CEO John Bishop noted during his presentation that the Cepheid system enables labs to increase their throughput just by adding new modules, and that the same test cartridges can be used for all of the company's tests — an approach that he said is "one or two generations ahead" of platforms from other vendors in the market.
"Our competitors are developing different platforms for different market components," such as women's health, healthcare-associated infections, infectious disease, and oncology, he said. "We're offering one system that can address all those markets, and, importantly, because it's the same system, will get same result irrespective of where the test is done."
Rather than focus on Cepheid's instrumentation roadmap, Bishop opted to underscore the company's expanding test menu.
BD Max and Viper
Last November, Becton Dickinson acquired HandyLab for $275 million in cash. The deal gave BD HandyLab's Jaguar system, which incorporates sample preparation, nucleic acid extraction, microfluidic real-time PCR amplification, and detection into a single automated platform.
BD said at that time that it would migrate its BD GeneOhm assays for methicillin-resistant Staphylococcus aureus, Clostridium difficile, and vancomycin-resistant Enterococcus to the HandyLab platform, which would be rechristened BD Max.
BD's Ludwig provided some additional details about the system at the JP Morgan conference last week.
BD Max "is where the HandyLab platform is going," he said. "It requires minimum lab space, minimum skills. It is CLIA-moderate, and [requires] minimum labor."
Ludwig said that the platform "enables the mixing of sample types and assays within a single run, generating 24 real-time results in less than two hours — up to 144 answers per instrument per shift."
BD Max "also enables on-demand testing — up to four samples, plug and play, fast turnaround," he said.
Ludwig added that the company received clearance from the US Food and Drug Administration in December "for new sample processing technology on the existing GeneOhm platform, which improves workflow by nearly 50 percent — particularly the front-end sample-prep time."
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The new procedure reduced the sample-prep time for the GeneOhm system to between 25 and 30 minutes from between 40 and 45 minutes, he said. That time is expected to be reduced even further — to between 10 and 15 minutes — on the BD Max.
Ludwig said that BD is also planning to add PCR capability to its Viper system, which is targeted at the detection of Chlamydia trachomatis and Neisseria gonorrhoeae and uses strand displacement amplification rather than PCR for the amplification step.
"We will be introducing PCR capability on the Viper in 2013, and enable menu expansion to include HPV," Ludwig said.
"We're also developing a mini-Viper with a PCR capability, so this allows us to mix and match different amplification capabilities — both in larger systems and in smaller systems for smaller labs."
He added that the new Viper capability is "powered by our own system and the HandyLab acquisition."
Panther on the Horizon
Gen-Probe, another firm that has historically based its molecular diagnostics business around non-PCR-amplification methods, also picked up a PCR-based test menu when it acquired Prodesse last year for $60 million.
In his JP Morgan presentation, Gen-Probe's Hull said that Prodesse's real-time PCR assays "complement" the company's existing transcription-mediated amplification-based instrumentation.
He noted that Prodesse's products are in line with the company's "strategic focus on infectious disease testing," primarily in the area of influenza testing. Prodesse markets the ProFlu+ test, which has FDA clearance to detect and differentiate influenzas A and B and respiratory syncytial virus; as well as ProFlu-ST, a sub-typing test that differentiates the 2009 H1N1, seasonal H1, and seasonal H3 viruses and has emergency use authorization from the FDA.
While the company projects $15 million in revenue from the Prodesse business in 2010, Hull was hesitant to make broad projections about the flu testing market. "We've been asked what the flu market looks like and the answer is, 'We don't know.' Nor does anyone else in the flu business at this point."
Hull said that changes in novel H1N1 have been "so rapid and so different than historical patterns" that it has been difficult to predict future growth patterns. One thing that the H1N1 epidemic has highlighted, however, is the "inadequacy of rapid tests," which Hull said could likely signal a shift in the market toward PCR-based tests.
Gen-Probe estimates that there are around 12 million flu tests performed in an "average" year, and that currently molecular tests make up fewer than a million of those.
However, "we see a shift toward molecular as the preferred test," Hull said. "We think we're taking share from other modalities."
As for Gen-Probe's legacy TMA technology, Hull said that the company will launch the Panther platform later this year. The system will target low-to-mid-volume labs and will enable testing capabilities not currently available on its Tigris system — namely the "ability to do quantitative assays."
Tigris only enables qualitative tests, Hull said.
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Panther will initially run the same tests as Tigris — chlamydia and gonorrhea — but the company plans to launch a human papillomavirus assay and a PCA3 assay to help identify men at increased risk of prostate cancer.
Gen-Probe estimates that it currently controls 64 percent of the market for chlamydia and gonorrhea testing, leading BD with 27 percent and Roche with 6 percent.
A Focus on the Menu
Cepheid is looking to take a bite out of Gen-Probe's share of the STD testing market with the European release of a chlamydia/gonorrhea test for its GeneXpert platform this year. A US release for the CT/NG test is slated for 2011.
Bishop told investors during the conference that the company plans to launch five additional tests in 2010. Two of these, for flu and for VanA, were cleared earlier this month [PCR Insider 1/7/2010].
Other tests slated for FDA clearance this year include an MRSA/SA nasal test, a Flu A/B panel, and a C. difficile test.
Cepheid is also developing a microRNA-based test for lung cancer. Bishop said that preliminary results indicate that the test delivers "just short of 92 percent sensitivity and 100 percent specificity relative to detection of disease, and with lung cancer you're doing darn good if you can get 50 percent."
He did not provide a timeline for the launch of the miRNA-based lung cancer test, but noted that the company is also looking to use miRNA markers in the infectious disease area.
"It turns out that microRNA expression profiles are potentially extremely valuable in looking at inflammation and sepsis for early detection," he said.
Bishop also touched on the impact of several patents held by Roche and Life Technologies' Applied Biosystems group that will begin expiring in the third quarter of this year. As a result, the royalty rates that Cepheid is currently paying will go down considerably beginning late this year and into 2012.
The company estimates that PCR royalty payments currently carve around 17 percent out of its non-GAAP gross margins, but believes it can narrow this figure down to 7 percent by the end of 2012 once the royalty payments are decreased.
"Royalty rates are going to be dropping off," Bishop said. "We expect to pick up, between this year and 2012, 1,000-basis-points improvement in overall profitability, which positions us to have … a profit margin on product sales in the mid-60s at the end of 2012."
Bishop noted that the Roche IP, which impacts both the tests and the systems, will begin "dropping out" in the US in the third quarter of this year and in Europe in the third quarter of 2011.
The ABI IP, which only affects the systems, will begin expiring in the second quarter of 2011 in the US and the second quarter of 2012 in Europe.