NEW YORK – Hosting its inaugural Capital Markets Day event in London on Thursday, Oxford Nanopore Technologies delineated its ambition and strategies to further penetrate the clinical and applied markets with its nanopore sequencers.
The company set the stage for the webcast event, which was open to institutional investors and financial analysts, by announcing its newly minted collaboration with Mayo Clinic and a £70 million ($84.6 million) strategic investment deal from French in vitro diagnostics firm BioMérieux.
"As clinical lab networks globally are expanding, we see this as a key opportunity for nanopore sequencing to enter clinical and diagnostics markets," Emma Stanton, Oxford Nanopore's VP of clinical, told investors.
According to Stanton, the company's collaboration with Mayo will first focus on breast cancer, specifically for the detection of BRAC1 and BRCA2 mutations. The collaborators are also interested in working on sequencing assays for rare cancers and infectious diseases.
For its partnership with BioMérieux, Stanton said the companies are working together to roll out a nanopore sequencing-based test for the rapid identification and characterization of drug-resistant tuberculosis. Besides that, she said they are working to validate nanopore data on BioMérieux's EPISeq software, which is used for hospital infectious disease surveillance and outbreak monitoring.
Furthermore, Stanton said Oxford Nanopore and BioMérieux will codevelop an IVD reflex test for clinical pathogen identification using targeted amplicon sequencing.
"We always look for things that are faster, give more actionable information, and are easier to use," said Mark Miller, executive VP and chief medical officer of BioMérieux. "It's natural for us to then take the next step and want to collaborate and develop products [with Oxford Nanopore] that really start impacting patients and infectious diseases."
When asked by investors whether nanopore sequencing would undermine the company's existing BioFire multiplex PCR platform for infectious disease testing, Miller asserted that the former is "not cannibalistic at all" but rather "very complimentary and additive" to the company's product portfolio.
"I don't think that with multiplex PCR you are going to achieve the degree of confidence in tuberculosis and tuberculosis [antibiotic] resistance that you will with nanopore sequencing," he said. "Nanopore sequencing gives you a vast number of genes and mutations that are relevant for antibiotic resistance on the most commonly used drugs, which we cannot obtain right now with multiplex PCR, and we are not going for."
Overall, Stanton said the newly announced partnerships fit into the four pillars of Oxford Nanopore's clinical strategy. These include collaborating with leading clinical institutions, deploying a dedicated clinical commercial sales team, developing end-to-end diagnostic solutions, and forging commercial partnerships with diagnostics firms that have established expertise, commercial presence, and market access.
Additionally, she pointed out that the top three clinical and diagnostic market segments for Oxford Nanopore are oncology, human genetics diseases, and infectious disease.
Still, all of Oxford Nanopore's products currently are developed for research use only, although labs can leverage them to develop and validate their own laboratory-developed tests (LDTs), Stanton said. To that end, she noted that the company will eventually need to have a "more prescribed and documented approach" for its products to achieve regulatory compliance such as IVDR marking and US Food and Drug Administration approval.
However, the company declined to comment on which product it plans to seek regulatory approval for first, and it did not disclose a concrete timeline.
During the event, Louisa Ludbrook, Oxford Nanopore's VP of commercial market development, accentuated the company's so-called Q-Line sequencing portfolio, which includes ISO 9001-certified, locked-down versions of instruments and sample prep reagents to help industrial or clinical customers who desire to implement long-term and stabilized nanopore sequencing workflows.
She also highlighted the company's ongoing partnerships in industrial markets. These include a collaboration with PathoQuest, a next-generation sequencing-based biosafety testing firm, to commercialize tests for biomanufacturing quality control — both good manufacturing practices (GMP)-validated and non-GMP. According to her, the non-GMP assay is now available while the GMP-validated test is expected to launch in early 2024.
In addition, she said the company is working with the Base facility within the University of Queensland in Australia for nanopore sequencing-based mRNA vaccine quality control testing. "Together we'll develop a rapid, comprehensive direct RNA sequencing test suitable for industry use, and we're currently in discussions regarding commercial evaluation of this test," Ludbrook told investors.
As Oxford Nanopore moves into the clinical diagnostic and applied markets, the company is also focusing heavily on partnerships and collaborations to share resources, build new nanopore sequencing-based products, and equally reap the benefits, said John Schoellerman, Oxford Nanopore's senior VP of corporate development and investor relations.
It remains to be seen how much penetration into the clinical market the company can achieve in the near term, especially given the increasingly competitive next-generation sequencing landscape.
In 2021, the company established a subsidiary called Oxford Nanopore Diagnostics to help develop validated clinical diagnostic tools harnessing nanopore sequencing. However, the company has largely remained quiet since its inception, and Oxford Nanopore's 2022 annual report listed the subsidiary's principal activity as "dormant."
Oxford Nanopore did not respond to a request to comment on the future role Oxford Nanopore Diagnostics will play in helping the company go after clinical markets.
When asked about what percentage of the company's current revenues are directly related to the clinical diagnostic segments during the Q&A portion of the event, CEO Gordon Sanghera said, "If we define clinical as not discovery and translational, then I would say very little."
"It's too early to figure out what that looks like, as we're at the beginning in the foothills of these tests," he added.
JP Morgan analyst James Gordon, who attended the event, wrote in a note to investors that it feels like the company "has turned a corner" with technological development now mostly complete and commercialization stepping up. "Though we believe there is still further detail to be fleshed out on this expansion, we see the company as well placed to deliver very strong top-line growth for many years, and we also came away with increased confidence in the company's ability to also deliver on the plans to reach profitability," Gordon noted.
Commenting on competition in the nanopore sequencing space, Sanghera said that while there is a rumor that Roche might launch a platform imminently, "we have not seen anything yet." Still, he said the company's "highly differentiated platform has significant first-mover advantage," and its "evergreen" IP portfolio has managed to "defend our position and block entrants."
In that regard, he also pointed to upcoming product launches, including TurBot, a benchtop device capable of "fully hands-off" sample extraction, library prep, sequencing, and data analysis, as well as TraxIon, a hand-held device also capable of carrying out the end-to-end nanopore sequencing workflow.
He also teased the audience with a so-called voltage chip that the company is developing, which will come with 10,000 to 100,000 channels and "ultimately lead to a one-hour, $10 genome."
"Don't ask me when that's going to happen," Sanghera said. "It's three to five years out."