Qiagen is betting that its $90 million all-cash acquisition of PCR assay developer SABiosciences, announced last week and expected to close before the end of the year, will be of particular interest for its pharma and biotech customers developing companion diagnostics.
SABiosciences, a 100-person company based in Frederick, Md., offers a range of genomic tools and services, but around 80 percent of its business comes from its line of disease- and pathway-focused real-time PCR-based assay panels, called PCR Arrays. Qiagen projects that SABiosciences will generate around $24 million in revenues in 2010.
The company currently offers more than 100 PCR Arrays ranging from Alzheimer's disease to the wnt signaling pathway for human, mouse, and rat. Customers can also order custom assays.
Each array is available in a 96-well or 384-well plate and contains gene-specific qPCR assays for a set of 84 genes relevant to a pathway or disease state as well as several quality-control elements — a housekeeping gene panel to normalize the data, a genomic DNA control primer set to detect non-transcribed genomic DNA contamination, reverse transcription controls, and positive PCR controls to test the efficiency of the PCR reaction.
Qiagen CEO Peer Schatz told PCR Insider that the assays should be of particular interest to the company's pharmaceutical clients — a market that is responsible for between 15 percent and 20 percent of Qiagen’s annual revenue, which reached $950 million in in 2008.
"What we're trying to give our customers is the ability to take an assay that they're using in a very early stage of discovery and validation and — without transitioning technology platforms — seamlessly move that into a companion diagnostic candidate if they so wish," he said.
Schatz noted that the pathway-focused content on the PCR Arrays was the key to the acquisition. Qiagen offers a web-based search tool called GeneGlobe that customers can use to find individual assays that are related to a particular gene of interest, but previously did not offer any bundled assay panels targeted at specific diseases or pathways.
"What we were really interested in was to turn the question around — to basically allow customers to come to us with a certain interest in terms of a pathway or a disease, and then have an extremely well-thought-out panel of PCR assays that they could blast against their sample," Schatz said.
Schatz explained that the PCR Arrays should appeal to researchers seeking more precise quantification than is available through gene-expression microarrays. "If you're already betting a lot on the development of a drug … you want to make sure that you get the best possible information to understand what's actually going on in your pathway or your disease of interest before you move to the next stages, and that's where PCR just simply is ahead of most other technologies," he said.
The product line is also expected to be complementary to DxS, a companion diagnostic developer based in the UK that Qiagen acquired in September for $95 million in cash plus up to an additional $35 million if certain milestones are met.
Including collaborations that DxS had in place prior to the acquisition, Qiagen is now working with 15 undisclosed pharma partners to help them develop companion diagnostics to personalize marketed or investigational drugs.
These partners "are interested in looking at well-validated disease panels [and] in the clinical relevance of the genes that are within the panel. And this is what we can offer now through the SAB portfolio," Schatz said.
"If you have a number of tissue samples, instead of taking individual assays and throwing them against the samples in early validation or even later-stage validation, you can basically blast the whole panel against the samples, and, by doing that, you will see more than that individual assay. You will actually see a small panel emerging that could be potentially interesting to look at a number of different assays in combination," he said.
Schatz noted that the goal of biomarker validation is to ultimately winnow that panel down to one or two assays.
"Just like in drug development, in the earlier stages people use a broad array of different markers, so they will want to run a few hundred different markers against early-stage targets,” he said. “And the more they validate these targets, or the combination of these targets with certain molecules, the more they want to narrow down the number of markers that they take through the process."
According to Schatz, there's a good chance that "certain" genes in a PCR Array could go through further validation "and then could feed into our personalized healthcare-diagnostics portfolio, or into our profiling diagnostics, or into our prevention or screening diagnostics portfolio."
The goal, he said, "is simply to help pharma and biomedical research up-front to create better panel systems for their discovery and validation phases. And through that, also help them feed into potential companion diagnostic markers, or see opportunities for other types of diagnostics that could be of interest of us."
SABiosciences, founded in 1998 as SuperArray Biosciences, is located within a five-minute drive of Qiagen's North American headquarters in Germantown and Gaithersburg, Md.
With the acquisition, Qiagen, which operates out of Hilden, Germany, and employs more than 3,000 people worldwide, now employs around 1,000 staffers in the Maryland area, Schatz said.
Qiagen plans to establish SABiosciences' Frederick site as a "center of excellence" in biological content development, and plans to continue developing new PCR Array panels, although Schatz declined to elaborate, citing the 30-day waiting period until the transaction closes.
Schatz acknowledged that around 10 percent of SABiosciences' reagents and other products overlap with Qiagen's current portfolio. "They've been selling some real-time PCR enzymes, but they will be replaced with Qiagen enzymes, at least partially, for those customers who want to have that," he said.
The PCR Arrays currently run on real-time PCR instruments made by firms such as Life Technologies' Applied Biosystems group, Bio-Rad, Agilent's Stratagene line, Roche, Eppendorf, Takara, and Fluidigm. Schatz said that the firm will continue to support third-party platforms.
"We have always had an open-platform strategy, so a lot of our assays also run on other instruments out there," he said. "We think we have a performance-leading system with the Rotor-Gene Q on the real-time PCR side, but we will continue to sell the panels also for plate-based systems such as the Bio-Rad, ABI, Eppendorf, or other types of systems."
A Qiagen spokesperson said that making the assay panels compatible with the Rotor-Gene Q will be a "top priority" once the deal is closed, but declined to comment further on the integration plans.
Schatz added that the panels can also be read on Qiagen's PyroMark pyrosequencing system. As an example, he said that if a researcher runs an assay on a real-time system and doesn’t get enough information, "you can actually take the same tube and put it onto a pyrosequencing system and get a full-resolution readout of the amplicons."