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Helicos Aims to Position Platform for 'Large' Opportunity in Diagnostic Sequencing

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By Julia Karow

This article was originally published December 14

Helicos BioSciences sees a "very large" diagnostics opportunity for sequencing and believes that its single-molecule sequencing technology is well-suited for clinical sequencing, according to a company official.

In a presentation posted on Helicos' website earlier this month, Stan Lapidus, the company's co-founder and chairman, said the firm's platform offers "simplified sample prep, easy interpretation, and high throughput," allowing Helicos to pursue diagnostic applications, whereas competing second-generation sequencing systems have "limitations on throughput, cost, and complexity of sample prep."

Until recently, the company has focused mostly on research applications of its Helicos Genetic Analysis system. But in its last quarterly earnings call, Helicos CEO Ron Lowy said the firm has seen "an increased interest in clinical applications for which the Helicos system is uniquely suited" (see In Sequence 11/10/2009).

In particular, genetic testing company Correlagen Diagnostics, which acquired a Helicos system this fall, recently launched a multi-gene assay for familial cardiovascular diseases that runs on the Helicos platform (see In Sequence 10/20/2009).

Lapidus said in the web presentation that the company has seen a "recent and profound interest of all the major testing labs in sequencing," which he said "evoked very little curiosity" just a couple of years ago. While he acknowledged that clinical sequencing using Sanger technology is not new, he said that it has not been widely adopted due to limitations set by cost, throughput, and sample prep complexity.

Because of these limitations, he said, "complete pathways are not comprehensively tested" and the amount of information that the tests provide is limited. He added that these tests are "very expensive and, therefore, are run in small volumes."

In the near term, he predicted, sequencing-based tests for inherited cancer risk as well as existing tumors will be "one of the largest markets" for clinical sequencing because the limitations of Sanger sequencing "have meant that much potentially valuable and actionable diagnostic information is unexplored."

Another interesting area for sequencing is in prenatal and neonatal testing, he said, where testing today is restricted to certain disorders because of cost and complexity. Single-molecule methods — such as Helicos' — Lapidus said, are able to detect low amounts of fetal DNA in maternal DNA, thus decreasing the risk associated with amniocentesis testing.

In the future, he predicted, the largest application of clinical sequencing will be for cancer screening in samples such as blood, stool, and urine.

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In his presentation, Lapidus pointed out a number of advantages of the Helicos platform over competing systems. For example, he said that Helicos requires no PCR amplification as part of its sample prep. "The rather simple and low-cost hybrid capture methods we're developing for our sample prep are in stark contrast to the need for an expensive PCR license required for many molecular diagnostic tests," he said.

He also suggested that the expected costs of clinical sequencing on the Helicos platform might be lower than that of existing sequencing tests, which are Sanger-based and cover fewer genes.

"Compared to tests consisting of smaller panels looking at much smaller regions of the genome, which cost up to $3,000 to $5,000 or more, the cost reduction on the HeliScope is truly dramatic," Lapidus claimed, citing molecular diagnostics sold by Myriad Genetics, Genomic Health, and Precision Therapeutics.

By comparison, the retail price of an assay on the Helicos platform may be on the order of $1,000 to $2,500, depending on volume, including the cost of royalties, accession, informatics, QC, compliance and reporting, and the fact that "labs strive to operate at 70 percent growth margins," he said.

Breaking down these costs, Lapidus said that a typical clinical sequencing assay — covering a panel of several genes — might encompass 500 kilobases of DNA, which would need to be sequenced at 20-fold coverage. Internal Helicos results have shown that it will be possible to analyze 200 samples — and maybe as many as 250 — per run on a HeliScope, or 40 to 50 samples in each of its 50 channels. Given Helicos' pricing for reagents and flow cells, this would translate into $65 in consumables costs per sample, he said. Adding $40 per sample for depreciation costs would result in total direct sequencing costs of $105 per sample.

The instrument currently has a list price of $999,000, meaning that Lapidus spread the instrument's depreciation over 25,000 samples, or about 100 multiplexed runs.

On top of direct sequencing costs comes the cost of selecting DNA targets, according to Lapidus. Over the last year, he said the company has been working with an unnamed clinical partner to develop a "novel hybrid capture method" for selecting DNA regions for sequencing and has estimated that the capture will cost about $50 to $100 per sample, which is expected to decrease with optimization. Thus, the total cost of sequencing 500 kilobases would be on the order of $200.

Lapidus also pointed to general benefits of sequencing as a platform for diagnostic tests. Citing the US Food and Drug Administration's draft guidelines that would require greater regulation of so-called In Vitro Diagnostic Multivariate Index Assays, or IVDMIAs, he said these assays — performed, for example, on microarray platforms — use algorithms that combine the values of multiple variables to generate a patient-specific "score." In contrast, he said, in sequencing, "no algorithms are involved" and "interpretation takes place directly based on the alterations of the DNA." As a result, he said, "the effect will be to drive testing that is today IVDMIA testing to sequencing."

Citing "scientists and policy experts," Lapidus suggested that in the future, two different entities might produce the sequencing data and provide the interpretation of the results, though it was not immediately clear why that would be.

He also said that Helicos has "the potential to receive platform clearance" for its sequencer, so "deployment of sequencing in FDA-cleared or FDA-approved assays — the so-called 510(k) or PMA paths — becomes much simpler for Helicos' business partners. He did not say, though, whether the company is currently seeking FDA clearance for its instrument.

He said the first company to develop an FDA-approved sequencing platform will have "the unshakable 'first-mover' advantage" because that platform "can be used by IVD companies in their FDA submissions without a need for re-validating the platform."

While FDA approval would mean that "companies like ours must implement a quality system and design controls, the payoff is large, [because] once an IVD company settles on a platform, it may be hard to dislodge." He added that "this is very different than in a research setting, where we regularly see one platform dislodging another."

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