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UBS Global Life Sciences Conference, Day 2: Cepheid, Complete Genomics, ProteinSimple, Luminex, Response Genetics

NEW YORK (GenomeWeb News) – The second day of the UBS Global Life Sciences Conference in New York featured several life science tools and molecular diagnostics companies making their pitches to the investor community.

Below are capsules from their presentations and breakout sessions.

Cepheid

Cepheid CFO Andrew Miller provided investors with an update on the firm's ambitious plans for rolling out new molecular tests over the next five years.

The Sunnyvale, Calif.-based firm currently sells 11 molecular tests in the US and 12 tests outside of the US. It has several tests in clinical studies including those for Chlamydia trachomatis/Neisseria gonorrhoeae, multi-drug-resistant tuberculosis, and a CLIA-waived test for Staphylococcus aureus. And in 2012-2013, it expects to have the CE-IVD Mark for its HIV, human papillomavirus, and hepatitis C virus tests. Miller also noted that Cepheid hopes to have the HIV test on the US market in 2014.

Overall, Miller said Cepheid is aiming for 47 tests on the market globally by 2016. It plans on having 39 tests on the market in both the US and Europe.

He estimated that Cepheid currently captures two-thirds of the $100 million market for molecular testing for methicillin-resistant Staphylococcus aureus, with C. difficile testing and tuberculosis as its two next-biggest revenue drivers.

Over the next several years, Cepheid also aims to enter the oncology market. Miller said the firm will focus on cancer recurrence tests first, since those would likely be easier to get through the US Food and Drug Administration.

He added that Cepheid expects to come to market with a breast cancer test that will rival that of Genomic Health and contain the same markers. However, he said the firm believes its competitive advantage will come from the test being available through any lab that has the firm's GeneXpert platform.

Miller also noted that Cepheid revamped its GeneXpert systems this past summer and launched its highest-throughput system to date, the GX Infinity-80, which can process up to 2,000 samples a day, and like the other GeneXpert systems is entirely random access.

Miller did not update Cepheid's previous guidance from its second-quarter call. The firm expects to report 2011 revenues of $265 million to $270 million.

Complete Genomics

Complete Genomics has been working on bringing the cost of its whole human genome services down while increasing its capacity.

CFO Ajay Bansal reiterated the firm's previous forecast of shipping 4,000 genomes to customers this year. As of the end of August, its order backlog was around 4,900 genomes, which translates to roughly $26 million in revenues. That backlog includes the recent orders from the National Cancer Institute/SAIC-Frederick and Inova Translational Medicine Institute for the delivery of 2,700 genomes.

The firm's production capacity currently is around 600 genomes per month, but it anticipates increasing that to between 800 and 1,200 per month by the end of the year. According to Bansal, each of its sequencers can currently do between one and two genomes per day, but it expects to increase that to six genomes per day in the first half of 2012 and to 10 genomes per day by the first half of 2013.

By 2015, Complete Genomics anticipates being able to sequence 80 genomes per machine per day.

Bansal estimated that from July 2010 to Aug. 3, 2011, Complete Genomics has taken orders for around 7,000 whole human genomes, compared to an estimated 3,250 for the Illumina Genome Network, a competing service offered by Illumina. BGI also offers whole human genome services, but Bansal couldn't provide an estimate for them, though he stated BGI is mostly focused on smaller projects and uses third-party sequencers, unlike Complete Genomics and Illumina.

Two events are expected to provide additional avenues of revenue growth for Complete Genomics. The first is the impending launch of its long-fragment read technology, which will separate out maternal and paternal chromosomes and resolve distributed repeats, Bansal said. The second is the firm's expectation of receiving CLIA certification of its facility next year, opening the door for it to begin sequencing genomes for clinical purposes.

Bansal couldn't provide a timeline for when the firm would begin offering such diagnostic services. But he noted during the presentation that Complete Genomics sees opportunities in pediatric diagnostics, offering whole human genome sequencing as a screen, as well as for cancer pathology and selecting oncology therapeutics. He also said the firm's services could potentially be used as a universal diagnostic tool in personalized medicine applications.

Asked during the breakout session about the potential effect of the continuing economic difficulties in the US and abroad, as well as a potential cut in NIH funding, Bansal said, "Funding pressures don't work that much against us."

He cited Complete Genomics' very small share of the overall research market and its potential revenue opportunities from pharma customers and in diagnostics as reasons the firm may not be as dependent on NIH funding as other tool providers. He noted the bigger question for the firm's customers and potential customers is whether they should outsource or invest in capital equipment.

ProteinSimple

ProteinSimple CEO Tim Harkness has plans to make the company a $100 million protein analysis pure play firm within three years.

The company, formerly called Cell Biosciences, posted revenues of $24 million in 2010 and is on the way to make $40 million-plus in 2011, Harkness said. With its newly launched system called Simon and leveraging acquisitions made during the past few years, he said that the company, based in Santa Clara, Calif., could reach its lofty goal.

With the Simon platform, ProteinSimple seeks to address the Western blot market, which Harkness estimated at $1 billion. By comparison, the three other markets that ProteinSimple participates in, Biologics ($100 million), Imaging ($150 million), and protein cell signaling ($250 million) — addressed by the firm's NanoPro product — have an addressable market of $500 million.

Simon uses an automated assay called Simple Western that requires no gels, transfer devices, blots, film, or manual analysis, and allows researchers to put a sample on a plate and then put the plate in Simon.

That, along with the capabilities gained through companies Protein Simple has acquired in the past two years, will allow it to achieve $100 million in revenues in 2014, Harkness said. In late 2009 the company bought Alpha Innotech and Protein Forest. A year later, it bought Convergent Bioscience, and this past May it purchased Brightwell.

Luminex

CEO Patrick Balthrop said the company is actively developing its platforms to be able to run assays that were developed by others on next-generation sequencing instruments.

He did not detail the work Luminex is doing but said that the firm believes some of its platforms are flexible enough already to run next-gen-based assays. The company will need to do further development to ensure it can run the assays in a manner compliant with US Food and Drug Administration regulations.

"We feel we have our hands around the technology," Balthrop said.

However, sequencing-based assays are not expected to have an impact on Luminex's business for the "next few years," he said.

Response Genetics

During the past six months, the Los Angeles-based genetic test development firm has added Sequenom's MassArray platforms as well as immunohistochemistry and fluorescent in situ hybridization technologies to its capabilities, allowing it to expand its product offerings, President Christine Meda said.

As a result, Response Genetics now has the ability to offer panels for bladder cancer and pancreatic cancer, and improved tests it already offers for lung, melanoma, and colon cancers.

The company, Meda added, has increased its sales staff to 21 across the country from 16.

Response Genetics has partnerships with a number of drug firms, though she identified only two: GlaxoSmithKline, with which it has had a years-long relationship but most recently entered into an agreement developing a companion diagnostic based on the BRAF gene associated with melanoma; and Taiho, with which Response Genetics first collaborated in 2001.

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