commercializing diagnostics


CEO of ABC Diagnostics Takes a Hint from Allergan's Saunders

We found the following wadded up next to a trash can:

CEO Blog: Another Social Contract with Patients

Lately, there has been zero focus on the price of diagnostics.  Damnit.  Drug companies get all the attention.   And the profits.  I’m writing out a new social contract for diagnostics companies. 

It’s often said that 50% of solving a problem is in first of all defining the problem.   This holds true for medicine as well.  If a patient pays $100,000 for a medication, we should get paid $100,000 for the correct diagnosis.  Period.

June 2016 with Nathan and Laura: GMO Labeling, Misspelling CRISPR, Sequenom Patent Loss, SmidgIon

Today's show was recorded July 1st, the first day that Vermont’s GMO labeling law went into effect. Just how big a win was this for the anti-GMO crowd, we ask our two commentators, Nathan Pearson and Laura Hercher. They have a surprisingly optimistic take, suggesting that the GMO labeling could become a positive marketing tool.

Laura says the scale and ease of CRISPR vs the older technology of zinc fingers is like going from manuscript writing to the printing press. She insists, therefore, that the approval of the first ever CRISPR trial is a big deal even though we’ve already been doing the same cell replacement therapy with zinc fingers. She also points out that the new trial is funded by Sean Parker’s foundation which is moving along at a Silicon Valley pace.

"The tech industry has never had their moment where it killed someone to move too fast.”

Last week the Supreme Court killed off Sequenom’s patent for prenatal screening. After Laura and Theral hotly debate whether there should be such patents, Nathan suggests there is a right balance.

“It’s sort of like tuning a carburetor,” he says. "Patents can encourage people to invest, but they can also inhibit the development of technology.”

And lastly, DNA has a new mascot. It’s called the SmidgIon.

Sequenom Patent Loss a Threat to Personalized Medicine, Says Kevin Noonan

It’s a non-decision with big implications. On Monday, the Supreme Court turned down an appeal by Sequenom in their patent case with Ariosa. The rebuff by the highest court kills Sequenom’s prenatal screening test patent for good.

Sequenom was first to market with their prenatal test that screened for chromosomal abnormalities, such as Trisomy 21. And there was nothing unusual in Sequenom’s receiving patent No. 6,258,540 for the test based on a novel discovery by researcher Dennis Lo showing that there was fetal DNA in the mother’s blood. The discovery sparked one of the fastest growing fields in the history of diagnostics.

The final result on this case has many in the field scratching their heads. If Sequenom can’t defend their patent for such a novel test, then what route should diagnostics companies take to protect their IP?

Today we’re joined by Kevin Noonan, a well known biotech patent lawyer and regular Mendelspod contributor, to discuss the case and what it means for our industry.

Kevin points out that in the precedent setting case of Mayo, the Supreme Court acknowledged that the case would end the patenting of many diagnostics, but expressly urged Congress to act and give the patent office more clarification. Until they do, Kevin says, companies are left with the only option of “hiding their technology” in order to get a return on their investment.

“We have this great age of personalized medicine that we’ve been hearing about since the Human Genome Project, which could die on the vine,” he says. "As a business person, you’re not gonna go into that business, you’re going to invest in the next “i” something because that you can protect. As a policy matter, it’s a horrible outcome."

Bringing Home Some Diagnostics Gold: Brad Gray, NanoString Show How It’s Done

You hear it everywhere. And it’s getting old. That "diagnostics is a tough slog.” That it’s the “redheaded stepchild of healthcare.”

And today’s guest doesn’t disappoint, repeating both these phrases. But Brad Gray and NanoString can claim some big “slogging" success. They’re coming out on top in diagnostics through some clever business strategy built on a solid platform. Made CEO at just 33 years of age, Brad has taken NanoString public and overseen a successful expansion from the research to the clinical market.

In his interview, you’ll hear Brad lay out the three pronged approach at NanoString. Starting as a spinout from Lee Hood’s Institute for Systems Biology, the company began in the life science tools space with their nCounter platform. The machine proved a favorite for cancer researchers because of its ability to look at single molecules of nucleic acid. When the company pole-vaulted into the clinical space, rather than set up their own lab and do the testing themselves--such as diagnostics pioneers, Myriad Genetics and Genomic Health--NanoString opted for a decentralized model. They did just the kind of thing that makes the FDA happy. They created a “push button simple” platform with kits so that clinical labs could do the testing themselves in a highly reproducible fashion.

But that’s not all. Under Brad’s leadership, the company has made several major companion diagnostics deals with big pharma. An agreement with Merck announced earlier this year delivered NanoString an upfront payment of $12 million. That’s a nice boost for a diagnostics company slogging away at reimbursement.

“The Merck deal is especially exciting because it’s the first major molecular diagnostics partnership in the field of immuno-oncology,” says Brad. "And the scale of it makes it the largest companion diagnostics deal ever announced, in economic terms.”

And what of the reimbursement slog for theirs flagship Prosigna breast cancer assay? NanoString can now boast Medicare coverage in all 50 states.

That’s about as good as it gets in our industry.

The Solid Future of Liquid Biopsies with Michael Nall, Biocept

There’s been lots in the news this past year about liquid biopsies—those non-invasive tests which locate biomarkers in a vial of blood. Much of that press (perhaps too much) has been about using these blood tests for cancer screening: predictive tests that could be available to consumers some time in the future.

But according to today’s guest, the real news about liquid biopsies is that they are in use now. Michael Nall is the CEO of Biocept, a company based in San Diego which has gone about as far as any organization in commercializing these non-invasive tests. They offer tests for many kinds of cancer, including breast, colon, prostate, and lung.

“The area we’re focused on really hasn’t gotten as much attention [as the cancer screening tests]. And yet it’s the nearest term and the biggest unmet medical need today: how do you help patients who have been diagnosed with cancer and who are progressing?” says Michael in today’s interview.

Biocept stands out in the space for not only their comprehensive line of testing, but for their demonstration of just how to commercialize these tests. The company has thirteen salespeople around the country who call directly on clinics. They are focused on two niches: cases where the cancer has metastasized in the bones or the brain and cases where not enough or no solid biopsy can be obtained.

Most importantly, Biocept has succeeded in getting paid for their tests using the same existing CPT codes that are used for the solid tumor tests.

Will we soon see a time when the liquid biopsy is the preferred test? How is Biocept preparing for impending FDA regulation? Hear this early success story for a pioneer in a rapidly growing field.

Digital Pathology at Scale: Epic Sciences Takes CTC Technology to the Next Level

It’s the beginning of the age of liquid biopsies, when less invasive, regular blood draws will provide more information than the occasional solid tissue biopsy. Companies that offer tests based on circulating tumor cells or cell free DNA in the blood are popping up like genome interpretation companies were a few years ago. As our understanding of biology at the molecular level advances--particularly in the field of cancer research--the more this practical and focused approach for teasing out the information in the cell, in the body gains steady adoption.

The success of prenatal diagnostics with a small amount of blood from the mother has shown us—and investors—that there’s there’s a wealth of information and money to be made from blood samples. And the promise of a non-invasive procedure to provide more important data than traditional biopsies can seems too good to be true.

Yet, we’re still in the early days. Few liquid biopsy tests have been commercialized. Today’s guest, Murali Prahalad, is the CEO of Epic Sciences. They are touting a new platform for analyzing circulating tumor cells, or CTCs. This has been a tricky space for companies (remember On-Q-ity?), so the big question for Murali is what makes Epic better?

Murals says that previous CTC technologies made some "grounding assumptions," such as that the cells had to have surface proteins used to isolate them, or that they had to be larger in size than the surrounding white blood cells.

“What we’ve said is let’s admit we don’t know what we don’t know. So let’s shotgun this. Let’s look at all the nucleated cells and get them on a proprietary glass slide and then use a mixture of staining, imaging, and computation techniques to really figure out what’s cancer from normal. So we’re not making any grounding assumptions here. And what it’s done is reveal a far greater range of these species in the blood than we ever thought possible. . . . We let the biology reveal what we should be worrying about.”

That all sounds fair and good. Now how will Epic take their latest studies and commercialize them into clinical assays that doctors can use?

For inspiration, Murali draws on the history of HIV drug development. It is now customary for AIDS patients to keep regular counts on their viral load as they manage their illness with one pill a day. This type of regular screening using just blood samples could become the norm in cancer as well. Quoting Mark Twain, Murali says, “history may not repeat itself, but it does rhyme."

Why Drugs Are Priced So High and Diagnostics So Low

Pharma companies face escalated flack over high drug prices. Meanwhile the diagnostics industry toils away at comparative pennies to the dollar.

Today's guest, the irreverent and hilarious blogging radiologist, Saurabh Jha (@roguerad), offers an alternative view to the industry's knee jerk reaction to the drug pricing conversation. Saurabh's experience as a radiologist grappling with a medical culture of over diagnosis is on full display along with his typical biting sarcasm. (As background for the interview, we recommend his brilliantly titled blog, The War on Death). To those working to commercialize molecular diagnostics, Saurabh offers some bits of wisdom.

“I do think diagnostics should be more expensive, but I think they should be more expensive because they have some kind of expertise giving meaning to them. I’m very reluctant to simply giving people numbers. Numbers without context, by and large, is very dangerous,” he says.

The Future of Diagnostics Reimbursement with Bruce Quinn

We toss the term "precision medicine" around with ease today, and yet payers continue to refuse to pay for diagnostic tests.

These are tests that might indicate which treatment will work for a specific patient, thereby saving perhaps hundreds of thousands of dollars, not to mention protecting the patient from unnecessary harm. These are tests which prevent invasive procedures such as unnecessary biopsies.

A few weeks ago, we featured the CEO of a leading diagnostics company who has been desperately fighting a recent proposal by CMS to reduce reimbursement of his company’s leading test by a whopping 70 percent. If the cut goes through, the company would probably go belly up.

How does this happen in 2015?  Why, in the golden age of molecular testing, do diagnostics continue to be so devalued?  As a society, why are we undercutting our own investment in biomedical research by not paying for the resulting tests?

These questions led us to today’s guest, Bruce Quinn, a diagnostics reimbursement consultant. Bruce worked five years on the payers’ side and now spends his time helping labs and diagnostics companies get their tests paid for.

Starting with the story mentioned above, Bruce says that the latest CMS proposal to cut rates reflects an old way of calculating reimbursement that goes back to the ‘70s. These old methods such as “crosswalk" and "gap fill” do not work with the sophisticated and costly diagnostics tests coming on the market today. Bruce is hopeful that a new market-based pricing method—similar to that used for drug pricing—which will be implemented as part of the recent PAMA (Protecting Access to Medicare Act) legislation will improve reimbursement rates for the more complex tests. He also warns that it could reduce rates for more simple tests, such as the PSA (prostate specific antigen) test.

Attempting explanation as to why diagnostics are so undervalued, Bruce says that payers have been burned over the years. Many companies and labs say that they are not understood by the payers,  but the payers DO understand them, he says.  The payers just don’t believe them. So what can these companies do? And who will pay for the expensive studies and trials needed to convince the payers?

“The book still remains to be written on how to develop these diagnostics tests with the optimal efficiency and the optimal chance of success,” Bruce says.   “I think people need to recognize we’re still learning how to do it, and we don’t have the answers in hand.  It’s still kind of a white space."

After CMS Announcement, Peter Maag and CareDx Fight for Life

By listening to him, you wouldn’t know that Peter Maag, the CEO of CareDx, was fighting to keep his company from the brink. We booked Peter for the show after news came out that CMS was once again threatening to lower reimbursement rates of established diagnostic tests.

Peter sounds remarkably positive in the face of the recent announcement by the Center for Medicare and Medicaid Services (CMS) that, come January, they would be cutting the reimbursement rate for CareDx's Allomap test by 70%. Because the test is used mostly by Medicare patients, this cut could threaten the company's very existence.

Why is this happening? Ten years ago, yes . . . but why is CMS still jerking diagnostics companies around when these products offer the very promise that President Obama talked about when he announced the Precision Medicine Initiative?

CareDx and the other companies, such as well known Genomic Health and Veractye, have thirty days to reply. Peter has some strong voices backing him up and is optimistic about getting the disastrous change negated.

He’s also very happy about a new test CareDx is working on using cell free DNA from not only heart transplant recipients but also for the transplant organs as well.

If diagnostics companies could focus more on their new products and less on continually fighting for a dime over a nickel with CMS, the future of precision medicine would be much brighter.




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