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With IBS Acquisition, Qiagen to Focus on NGS for Clinical Research and MDx; First Target is Cancer

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Qiagen said this week that it has acquired private next-generation sequencing company Intelligent Bio-Systems in order to develop an NGS workflow that focuses on clinical research and molecular diagnostics.

Qiagen's CEO Peer Schatz told Clinical Sequencing News that the acquisition builds on ongoing work at the company to develop a "sample to result workflow for next-gen sequencing for clinical research and diagnostics."

As part of the acquisition, Qiagen plans to build its own sequencing platform that is especially suited for clinical sequencing, as well as develop targeted sequencing-based diagnostic tests, beginning first with eight different cancer panels for leukemias and solid tumors.

The announcement is a bit of a shift for the company, which last year told CSN sister publication Pharmacogenomics Reporter that while next-gen sequencing was a good research tool, it was not ready for clinical applications, and especially for developing companion diagnostics.

Schatz reaffirmed his opinion this week that sequencing is not the best tool to use in companion diagnostic development. "In the personalized medicine world and companion diagnostics, there's a strong preference to validate a limited set of biomarkers," he said. Next-gen sequencing identifies so many biomarkers that it makes this validation step extremely complex and onerous, he said.

Qiagen has an active development pipeline for PCR-based companion diagnostics. It is developing assays for a number of cancer-related biomarkers, including EGFR, KRAS, BRAF, PI3K, JAK2, and BCR-ABL, and counts 15 pharmaceutical firms — including Amgen, AstraZeneca, Boehringer-Ingelheim, Bristol-Myers Squibb, and Merck — as co-development partners for companion tests.

Schatz noted that sequencing is better suited for "exploratory diagnostics," where a physician has tried several therapies and is looking for a treatment not previously thought of. Additionally, it can be useful in diseases such as leukemia, where a physician wants to "look at 10 different genes for prognostic purposes."

Clinically Focused Platform

Schatz said Qiagen plans to develop its own next-gen sequencing platform that is especially designed for clinical applications. The system will make use of Qiagen's expertise in sample-prep, automation, and bioinformatics, which it will merge with many elements of the sequencing system that IBS has been developing, the Mini-20.

IBS founder and CEO Steven Gordon recently described the system at the Association of Biomolecular Resource Facilities annual conference in Orlando, Fla. (IS 3/27/2012).

IBS's Mini-20 is based on sequencing-by-synthesis chemistry and intellectual property that IBS licensed from Columbia University. Schatz said that the technology's continuous loading and random access features were particularly interesting from a clinical standpoint. The system allows for new samples to be loaded while the machine is running. Up to 20 samples can be run at one time without having to barcode.

Schatz did not disclose when the new system would launch, but said that it will be substantially different from the Mini-20, with the addition of Qiagen technologies for the front and back ends of the sequencing workflow, such as "reagents, software, instrumentation design, flanking instrumentation, and the bioinformatics."

The new system not only builds on the IBS technology, but also "improves on it dramatically," said Schatz, with feature like "superb automation" and parallel processing, which "are not available today in other systems."

Additionally, he said that the bioinformatics and data processing will be integrated with the sequencing workflow, which is critical for the clinical sequencing market. Qiagen is collaborating with SAP to create "ultra fast highly compact systems" for onsite data processing based on SAP's Hana platform, he said.

The automation, as well as the fact that both the sample prep and bioinformatics are all included in the system, is especially important for clinical applications, Schatz said. He added that the company has received positive feedback on its plans from some potential customers in the clinical research and diagnostic space.

Schatz said that further details of the sequencing system would be provided early next year.

A Hot Market

Whether the platform will make significant inroads into the clinical market remains to be seen. Even though clinical sequencing is still a nascent field, both Illumina and Life Technologies have been aggressively pushing into the clinical market.

Illumina reported in April that more than half of all orders for its MiSeq instrument were from clinical customers and that it was in discussion with some 100 potential clinical customers (CSN 4/25/2012).

Illumina has also partnered with Siemens to develop an HIV assay on the MiSeq, while companies such as Sequenom, Verinata Health, and Ariosa have already launched prenatal trisomy tests and Foundation Medicine has launched a cancer test all on the HiSeq 2000.

Life Technologies, meantime, has said that it has been developing a "comprehensive strategy" for expanding its molecular diagnostic presence (CSN 4/25/2012).

Last week the company announced agreements with the Children's Hospital Boston and the Hospital for Sick Children to develop clinical sequencing workflows on its forthcoming Ion Proton machine.

The Fox Chase Cancer Center is launching a cancer sequencing service using the Ion Torrent PGM (CSN 12/21/2011) and AmpliSeq Cancer panel. Asuragen has also developed cancer assays on both the PGM and HiSeq (CSN 1/4/2012).

Life Tech is also working with partners to develop HLA assays for the PGM (CSN 4/18/2012).

Both Life Tech and Illumina also plan to submit their PGM and MiSeq instruments, respectively, to the US Food and Drug Administration for 510(k) clearance this year.

This steep competition from entrenched players may pose a challenge to Qiagen as it looks to carve out a niche in the clinical sequencing market. "While we applaud Qiagen for attempting to bring a clinical focus to the NGS space, we think the likelihood that the Intelligent Bio-Systems technology becomes the clinical standard is remote, given the status of the other platforms in the eyes of researchers and clinicians," wrote Brian Weinstein, an analyst with William Blair, in a research note this week.

Weinstein added that William Blair views Qiagen's acquisition of IBS as "more of a proof-of-concept for Qiagen to show that it has the ability to create an automated sample-to-answer NGS workflow that can be used by a clinical lab."

He added that while the investment in the IBS technology "may not come directly back into the pockets of the investors," the move may allow Qiagen "to collaborate with other NGS platform makers to create clinical workflows in the future. Further, it gives Qiagen "a means to develop the sequencing-based assay market faster as its personalized medicine business begins to roll out advanced oncology panels that require more robust technologies than PCR or pyrosequencing."

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