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Somalogic Exploring New Models for Selling Clinical Products Based on SomaScan System

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NEW YORK (GenomeWeb) – Having raised $200 million in financing over the last year, Somalogic is ending its fee-for-service business to focus on developing its SomaScan platform as a clinical tool.

The company is establishing collaborations with pharmaceutical companies, health systems, and other organizations that will allow it to collect and test the patient data it hopes to ultimately package for clinical use, said Stephen Williams, Somalogic's chief medical officer.

While Somalogic has pursued diagnostics development in the past, Williams said the company plans to sell its clinical products not as discrete tests but as sets of "insights" derived from patient proteomic data collected using its SomaScan platform.

How exactly the company will package these insights is still being determined, but Williams said "it's not going to be one at a time with doctors checking off boxes," as diagnostic products are typically sold today.

He gave as one possible route an enterprise solutions model in which the company sells access to SomaScan to patients and providers. "We're in the process of working out with health systems which is [the sales model] they want and what is the nature of the [clinical] evidence that they would need in order to sign up," he said.

The company's exploration of new models for selling diagnostic information reflects the desire among some within the industry to move beyond sales of discrete tests and into the sort of broader patient management role Somalogic envisions. At the 36th annual JP Morgan Healthcare Conference in San Francisco last week, Sean George, CEO of genetics firm Invitae, declared that "genetic testing is dead," and said his company aims to develop a new business model for genomics in healthcare based on managing genomic data within networks of patients, doctors, and healthcare systems.

Somalogic's vision is much the same, only focused on proteomic rather than genomic data. At the core of its model is its SomaScan platform, which uses the company's aptamer-based affinity reagents called Somamers to measure proteins in patient samples, typically blood. Somalogic launched SomaScan in 2012 and since then has derived the bulk of its revenues from service work using the platform, with the pharma industry being one of the firm's largest customers.

The company has always harbored clinical ambitions, though, and several deals in recent years have indicated a shift in that direction. In 2016, it announced a deal with Visium Healthcare Partners under which it received up to $60.5 million in debt and equity financing with the funds going to develop clinical diagnostics based on the SomaScan platform.

Last year, Chinese healthcare firm iCarbonX made a $161 million equity investment in Somalogic, and the company joined iCarbonX's "Digital Life Alliance," a collection of life science companies working to develop what iCarbonX has termed a "Global Digital Health Ecosystem," which will use omics and other data to track individuals' health.

That investment was part of the larger $200 million financing round the company closed this month, funding the company said it will use to pursue its goal of becoming a "leading provider of precision digital health insights."

As part of its shift in focus, Somalogic is ending its fee-for-service work to concentrate instead on collaborations aimed at building its collection of patient data, said Larry Gold, the company's founder and chairman.

"There will be some revenue from pharma collaborators, but the real goal for us is to get data from some of the things we do for them in order to have more insights, more data, than we would be able to get merely from the 200,000 samples we are running on our nickel," he said. "This is a massive knowledgebase creation [effort] where the ultimate monetization will be from selling insights to the people who need them."

In addition to ending its fee-for-service work, the company will stop offering targeted SomaScan panels, Gold said. Instead, all samples will be run on the full SomaScan platform, which currently measures 4,995 proteins.

"The data, the insights, that we need for medical or direct-to-consumer customers will always be algorithmically derived from a subset of those 5,000 [proteins], but it need not be just the, say, 20 you thought you were going to measure" initially," he said.

Somalogic currently offers a SomaScan panel covering roughly 1,300 proteins, run out of its CLIA lab. It plans to begin offering the 5,000-plex version out of its CLIA facility in Q2 of this year.

As Williams noted, the exact business model for selling these proposed insights remains to be determined, but the company envisions a mix of consumer products and products sold to doctors and health systems.

Williams said that on the consumer side, the company is in discussions with several companies that have direct-to-consumer channels about offering SomaScan-derived insights that, he said, "could enhance their existing products."

"There may be some consumer applications in terms of improving people's diet, nutrition, exercise, and so on, that are non-medical and could go to market quite quickly," he said.

With regard to its products aimed at healthcare organizations and professionals, the company is working to establish collaborations where they can demonstrate the value of its data within those systems.

"Our first step is to go into integrated health systems and to convince them that we can generate evidence of impact," Williams said. "What we don't know yet is can these packages [of insights] enhance a person's health. So we are building collaborations with health systems to take them into medical practice to see, if you provide this information to the care team and the patient, what can they do about it.

"Can they do something that leads to an improved outcome or changed behavior or something else that is of benefit to the patient or the health system? We can't do that from retrospective samples because this information is all new, and so that is the purpose of setting up these health system collaborations," he added.

He added that Somalogic is in discussions with several US health systems as well as several systems within the UK's National Health Service.

The company's first such project will be with the Leeds Centre for Personalized Medicine and Health in the UK where it is looking to see whether use of SomaScan data around can improve compliance with a diabetes prevention program.

The Leeds Centre was "instrumental in setting up the national diabetes prevention program in the UK," Williams said. "And that has been shown to be effective in terms of improved outcomes and diabetes prevention."

"The issue that they are facing, though, is that two-thirds of the eligible people don't join it," he noted. "So the first project we will do with them is to say, if you take some of the non-compliers and you show them this [SomaScan-derived] information [around diabetes risk] can you get them to join the program."

"The nice thing about that is that it is very simple," Williams said. "We don't have to prove the effectiveness of their program because they have already proved that. All we have to show is that when you give this comprehensive information to an individual, does it convince them to become compliant with an effective program? It's quick. We aren't waiting for five-year outcomes or anything."

Depending on the outcome of this initial project the relationship could develop further, he said. "You might go on from there to see if you keep providing them with that information, does it allow them to further enhance their diabetes prevention program, as well. We haven't yet finalized that protocol but that is the kind of thing we are talking about."

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