NEW YORK (GenomeWeb News) – This week executives from several firms in the molecular research tools and molecular diagnostics fields made their pitch to investors at the annual UBS Global Life Sciences Conference held here.
Below are snapshots from those firms' presentations and question-and-answer sessions.
Referencing the firm's collaboration with IBM to co-develop nanopore-based DNA sequencing technology, Daniel O' Day, COO of Roche's diagnostics division, said that the company would continue to seek similar partnerships to keep pace with technology innovations in the sequencing space.
That market is moving toward single-read sequencing, he said, which its collaboration with IBM would address. He cautioned, however, that he has seen other firms which purport to offer such technology, or are developing it, fail. He added that it would be three to five years before its work with IBM could result in a proof of concept.
O' Day said that although sequencing has potential as a platform for the development of diagnostic tests, the technology still has the hurdles of costs and speed. Additionally, what to do with all the data remains unclear, and in some instances, PCR assays may currently offer an advantage over a sequence-based test.
The "most attractive" areas for diagnostics development, he said, are in HLA-related diseases, cancers, HIV, and human papillomavirus.
Gene Cassis, corporate vice president of worldwide business development and investor relations for Waters, said that the firm eventually sees its Acquity UPLC H-Class System replacing its Alliance HPLC instruments.
Launched in January, the H-Class was meant to be a bridge between HPLC and UPLC technology and was to bring more researchers into the UPLC fold. Responding to a question, Cassis acknowledged that at some point the H-Class will supplant its Alliance technology completely.
"I don't think it's our immediate strategy to discontinue the Alliance," he said, but Waters is positioning the H Class to do so, and is moving manufacturing of the instruments to its Singapore facility so that it can be manufactured in high-volume, Cassis said.
The ending of licensing payments to Roche and Life Technologies' Applied Biosystems business will add to the company's bottom line over the next few years. According to Andrew Miller, Cepheid's CFO, the company no longer has to pay royalties to Roche for systems and tests sold in the US. In 2011, royalties to Roche for systems and tests in Europe will also discontinue as will royalties to AB for systems in the US. The year after, Cepheid will stop paying royalties to the company on systems in Europe.
Miller also said that Cepheid expects FDA clearance on a new flu assay by the end of the year and is seeking FDA clearance for assays for Chlamydia trachomatis/Neisseria gonorrhoeae, C. difficile 027, HIV, and human papillomavirus.
In addition, Miller noted that the recall of all lots of its Xpert MRSA/SA blood culture products during the summer has had no long-term fallout, and to date only one customer has stopped using the product. "The whole thing is behind us," he said.
Thermo Fisher Scientific
Thermo Fisher CEO Marc Casper said that the firm has had about $125 million in benefits from stimulus funding, putting it on track to finish on the high end of its previously projected $100 million to $200 million in revenues that the company expected from such business.
Because the funds are coming incrementally and expected to continue into 2012, when stimulus funding ends, Thermo Fisher does not expect a nosedive in revenues, he added.
This year, the firm has expanded its presence in the PCR space by buying Fermentas and Finnzymes. During the company's Q2 earnings conference call, Casper remarked on the importance of the PCR market and Thermo Fisher's desire to make an impact in the space.
This week, Casper spoke briefly about linking that business with the company's diagnostics business, and noted the development of flu-based diagnostics as a possibility for the firm.
Bruker CFO William Knight said that the company has done about $100 million in global stimulus-related business with mass spectrometers and NMR instruments the prime beneficiaries.
He added that while its mass spec business has mostly been directed at life science applications, the purchase of certain business segments of Varian's business in March will help shift some of the focus to chemical analysis.
Like officials from several other companies presenting at the conference, Knight said that in spite of worries over the economic situation in Europe, Bruker continues to see no ill effects. Europe "has been very good for us," he said.
Affymetrix CEO Kevin King said that in addition to the development of an array for genome-wide association studies of Chinese populations, the company is either developing or exploring developing arrays for other populations, saying there is "great interest" in such arrays.
In three of the four most recently completed quarters, Affymetrix has seen a net loss, and during the past year its stock price has been nearly halved. To address this, King said that there have been internal discussions of a share buyback. He expressed reluctance at such a strategy, however, saying that cash would be better spent on new acquisitions, particularly of firms or technologies in the molecular diagnostics space that are "at the inflection point" and complementary technologies.
He also said that one of the challenges in drumming up investor interest is that there is a misconception that microarrays have become irrelevant, and as a result, Affymetrix has become irrelevant.
Qiagen CEO Peer Schatz said that the firm expects to launch its first companion diagnostic next year: a KRAS test in conjunction with Amgen's Vectibix (panitumumab), a treatment for metastatic colorectal cancer. He said the firm plans to file for US Food and Drug Administration clearance for the test later this year.
The firm's companion diagnostics program was a major focus of Schatz's presentation on Monday. He noted that the firm has 15 partnerships with pharma companies for potential companion diagnostics. Among those partners are Amgen, Pfizer, Bristol-Myers Squibb, AstraZeneca, Eli Lilly, and Merck. He added that developing diagnostics in partnership with pharma firms costs of a fraction of the price for developing such tests as standalones.
Schatz said that although Qiagen currently takes in around $50 million annually from its personalized healthcare tests business, it is growing at a 40 percent clip.
Mark Capone, president of Myriad Genetic Laboratories, reasserted the firm's earlier claims that the outcome of the suit challenging the BRCA1 and BRCA2 patents would not have any material impact on its business or sales of its BRACAnalysis test. He noted that Myriad's test is covered by 23 patents in the US and by five patents in Europe.
Myriad currently has eight tests on the market, but BRACAnalysis accounts for nearly 90 percent of the firm's revenues. The firm hiked the price of the test by 7 percent to $3,400, but has not seen any pushback from insurers, according to Capone.
He also noted that the firm has two tests in the pipeline for companion diagnostic purposes, including BRACAnalysis with PARP inhibitors, and Prezeon with PTEN inhibitors.
Capone said that Myriad is working with a consulting firm on its strategy for entering the European market, which it hopes to do by 2013. He noted that initial discussions on reimbursement for BRACAnalysis in Europe have been "positive." He also said that the firm's approach could differ country-by-country, with Myriad partnering for some, going it alone, or even buying a smaller firm with distribution capabilities.
Celera has a handful of tests, including ones for stroke, thrombosis, and lung cancer, in development to complement its current roster of genetic tests: KIF6, LPA, 9P21, and a recently launched test for CYP2C19. CEO Kathy Ordoñez said that the lung cancer test is in feasibility testing and "looks promising," and added that the firm is working on a breast cancer test that has been partnered with LabCorp.
Ordoñez also admitted that the firm had suffered a "huge setback" when certain members of its Berkeley HeartLab sales staff left the firm and siphoned off some customers. Celera sued those former employees and reached a settlement in April, but sales at BHL have continued to be hampered — and the firm subsequently reported a 21 percent drop in second-quarter revenues.
Ordoñez said that the firm has tried to counter the drop in sales by hiring new staff earlier this year in major metro markets throughout the US.
Genzyme CFO Mike Wyzga told investors that the firm expects to receive final bids for its diagnostics business, which was put up for sale earlier this year, and expects to complete a deal by the end of the year. The firm recently announced a definitive agreement to sell its Genzyme Genetics segment to LabCorp for $925 million in cash. In addition, the firm has put its pharmaceutical intermediates business up for sale.
Genzyme recently rejected an $18.5 billion bid from Sanofi-Aventis to buy the whole firm.
For coverage of the conference earlier this week see the following articles: