The clinical market is poised to adopt genomic tests of higher complexityLos Angeles, CA – January 10th, 2013 – The JP Morgan Healthcare conference wrapped up on Thursday. It became clear that life science research tool companies continue a strong push into molecular diagnostics (MDx), in order to move up the value chain, and ride a double digit growth rate observed in that space.This is exemplified by Agilent's $2.2B buy of Dako in June from which Agilent established a new business segment, the Diagnostic Genomics Group. Earlier this year, Agilent had signaled its interest in becoming a larger diagnostics player and registered its Texas facility with the FDA, as well as some of its liquid chromatography and mass spectrometry systems as Class I medical devices.The clinical market is ready to adopt genomic tests with complexity and plex level that go beyond standard PCR / qPCR. Multiplex tests such as BioFire or Luminex RVP tests have gained traction in the market, and other such tests are in the pipeline. For instance, Luminex’s GI panel is expected to be cleared in the next few weeks, according to Luminex’s CEO. Higher plex analysis is also being used by current Dx companies, such as Foundation Medicine.That being said, in the next few years, the most exciting development will likely be in the next generation sequencing (NGS) space. DeciBio estimates that overall, the genomics market has been growing in the mid-single digits, with NGS largely driving this growth. Actually, NGS is the only large (>$500M) genomics market with double digit growth rates.There is little debate around the fact that NGS is poised to become a disruptive diagnostic tool. The only question is when. A number of issues such as cost and workflow (from sample to answer) need to be address before it gains broad adoption. Current cost constraints prevent broad usage for many applications. Further, the timeline of reimbursement from private and public payers (e.g., Medicare) for various test is still unclear. The two main players of interest in this space are Illumina and Life Technologies, and both are moving into the clinical space aggressively.Shortly after the MiSeq was announced in January 2011, Illumina declared its clear potential in the clinic and interest in developing FDA-approved clinical tests for the platform. Illumina has been developing a clinical version of MiSeq dubbed MiSeqDx, and just submitted the system to the FDA for 510(k) clearance. MiSeqDx is expected to have additional software providing more process control and user traceability.Illumina is creating products organically for MiSeq, and recently submitted its first two NGS tests to the FDA for clearance: a cystic fibrosis diagnosis and a carrier screening test. The test is expected to be cleared in H2 2013. In addition, the company has bolstered its clinical portfolio through acquisition. Illumina acquired Verinata Health, a non-invasive prenatal testing company that leverages its NGS to test for fetal chromosomal aneuploidies in high risk pregnencies. Verinata’s Verifi test is the most comprehensive on the market; it covers: Down syndrome or trisomy 21, Edwards syndrome or trisomy 18, and Patau syndrome or trisomy 13, and optionally sex chromosome aneuploidies (e.g., Turner syndrome, Klinefelter syndrome, triple X, Jacobs syndrome).This acquisition consolidates the company position in reproductive health that Illumina entered in September 2012. With an expected 1.5M-2M high risk pregnancies per year, Illumina estimates the addressable market at $600M. The market is currently underpenetrated; Sequenom, the market leader announced it has received 60K samples for its MaterniT21 testing in 2012. Illumina plans to submit.Verinata's test to the FDA as an IVD in the near future. Of note, PerkinElmer has gained US marketing rights to Verinata Health's Verifi prenatal test, allowing the company an opportunity to enter the non-invasive prenatal test market without having to acquire or develop its own test.Life Technologies also continue to aggressively enter the clinical market. This is demonstrated by a number of events: the 2012 acquisitions of Navigenics and Pinpoint Genomics; the launch of Prevenio, a lung cancer test service and company’s first LDT; the establishment of a sales force focused on the CLIA lab market; a partnership with Claritas Genomics.Life Technologies has entered a partnership with Claritas Genomics to develop diagnostics on its Ion Torrent platforms for inherited pediatric diseases. Claritas Genomics will help validate the Ion Proton for clinical use. During the conference, Life Technologies mentioned that ~20% of its 2012 Ion Torrent sales were to clinical customers; this number is expected to increase significantly in 2013.Life Technology has developed a focused CLIA sales channel as well as a focused clinical trials channel. The CLIA sales channel will help clinical labs better understand how to use the broad panel of technologies it offers, including NGS, CE sequencing and PCR platforms. The company is also planning to submit its Ion Torrent PGM machine to FDA for 510(k) clearance in the near future.

Authors: Stephane Budel, Partner at DeciBio, LLCConnect with Stephane Budel on Google+https://plus.google.com/+StephaneBudel