Potential IVD Market Disruptors

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Potential IVD Market Disruptors

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#1 More Walk-In Clinic Testing, More DTC Testing

A growing segment in clinical laboratory testing is as a service provided by walk-in style clinics in pharmacies and retail food outlets. Retail clinics, also known as convenience clinics, have become a quickly growing segment of the U.S. healthcare marketplace. Retail patient service centers have grown in number since they first came on the scene in the mid-2000s. In 2010, there were 1,200 retail clinics operating in 32 states in the U.S., according to the Convenient Care Association (www.ccaclinics.org). Accenture Consulting estimates the number of U.S. retail health clinics would reach more than 2,800 in 2017 (www.accenture.com/us-en/insight-retail- health-clinics).

In 2016, total U.S. retail clinic sales are estimated at more than $1.4 billion, an increase of 20.3% per year from $518 million in 2010. Through 2020, sales are expected to continue expanding (Kalorama Information: Retail Clinics 2017: The Game-Changer in Healthcare).

With the Theranos (Palo Alto, CA) debacle in 2016, the allure of retail clinic ventures had faded somewhat. But, in 2017, various news reports indicate that Quest Diagnostics (Quest) and Laboratory Corporation of America (LabCorp) have become more active and have been opening more patient service centers in grocery stores and retail pharmacies. In 2017, Quest has announced plans to open patient services centers with several retailers, particularly in the states of Texas and Florida. Similarly, LabCorp disclosed an agreement with Walgreens Boots Alliance.

Walgreens and LabCorp announced a collaboration through which LabCorp will develop and operate patient service centers within select Walgreens stores. The centers, which will be co- branded “LabCorp at Walgreens,” will offer LabCorp patient services in a secure, comfortable

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―Focusing on laboratories is not the only choice for IVD marketers‖


environment for specimen collection, located near the pharmacy area inside the store. Tests on specimens collected at the Walgreens locations will be performed through LabCorp’s network of primary and specialty laboratories.

Consumer Testing

In some cases, the consumer is seeking out testing directly. The global direct-to-consumer (DTC) genetic health testing market totaled $99 million in 2017, according to our most recent report. With average 25.6% growth, the market will grow to $310 million in 2022. Kalorama Information said growth of the direct-to-consumer genetic testing market is born out of a paradigm shift among consumers who are seeking greater

control over their own healthcare. Kalorama did not include paternity testing in its number. The finding was presented in the firm’s recent report, The Market for Direct-to-Consumer Genetic Health Testing: http://www.kaloramainformation.com/Direct-Consumer- Genetic-Health-Testing-11370673/.

Ethical dilemmas are also a concern for the industry. This
involves the interpretation and use of genetic test results.
To address this concern, many DTC genetic testing companies have employed onsite genetic counselors. Because this is a fledgling industry, there will be a number of growing pains before this field is mainstream. ―However, demand by the consumer to unlock their genetic health information will likely triumph over the adversities,‖ said report author Mary Anne Crandall.

#2 Skipping the Pathogen: Syndromic Testing

Infectious disease tests most companies produce detect a single pathogen, or an antibiotic resistance gene. However, if a patient presents with general symptoms of a respiratory infection, or with symptoms of a gastrointestinal infection or some other type of infection, there are several different pathogens that may have caused the infection. This has led to the development of syndromic panels that include a panel of pathogens and often also resistance genes commonly found with the targeted type of syndromic infection.

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Kalorama Information’s Retail Clinics 2017: The Game- Changer in Healthcare


Some of these companies were exhibitors at the 2017 AACC Annual Meeting. Examples include:

BioFire Diagnostics (a bioMérieux company) has commercialized the FilmArray platform. Four syndromic panels are currently available: Respiratory Panel, Meningitis/Encephalitis (ME) Panel, Gastrointestinal (GI) Panel, and Blood Culture Identification (BCID) panel. BioFire Diagnostics also offers the FilmArray® Respiratory Panel EZ on the FilmArray® EZ Configuration platform. This is a CLIA-waived test designed for point-of-care settings.

Curetis currently has developed the Unyvero Platform. Unyvero cartridges are available for three applications: (1) Unyvero HPN Pneumonia Cartridge – 19 resistance markers and 20 pathogens, (2) Unyvero i60 ITI Cartridge – for implant and tissue infections; for detection of up to 102 analytes, and (3) Unyvero BCU Cartridge – for blood culture; for detection of up to 103 analytes. In addition, an intra-abdominal infection application is in development. In the United States, Curetis has conducted clinical trials and submitted to the FDA, seeking clearance of the Unyvero Platform and Lower Respiratory Tract Infection (LRT) Application Cartridge.

GenMark Diagnostics has developed the ePlex® System. A respiratory panel is currently available.

In addition to the single disease tests, Luminex is developing tests on the company’s VERIGENE platform. Luminex showcased the VERIGENE Respiratory Pathogen’s Flex Test at the San Diego AACC Annual Meeting in 2017. Luminex has also developed two gastrointestinal infection tests.

#3 – Immunoassay Point of Care Pushes Back

With all the attention on Molecular Point of Care systems, it’s worthwhile noting that there are also improvements in immunoassays. Few technologies in the point-of-care diagnostics market pit molecular against immunoassays in an interesting way. The healthcare market researcher with a specialty in the IVD market said that as molecular diagnostics enter point-of-care (POC) settings, cost becomes a key issue in comparison to predominantly used and cheaply performed rapid immunoassays. In routine testing applications such as screening, test cost is often prioritized over performance, especially in low-resource health systems. High-burden tropical diseases in the developing world such as malaria represent a significant opportunity for

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molecular tests in the POC diagnostic market, but must displace or compete against rapid immunoassays in established screening programs or future initiatives.

The sensitivity and specificity of nucleic acid analytes provide molecular diagnostics key advantages in clinical practice, particularly in critical health situations. Nucleic acid amplification, or molecular tests, are now open to routine and distributed use in healthcare thanks to advancements in microfluidics and molecular reagents. Emblematic in terms of where the infectious disease POC testing market is heading and the competitive challenges awaiting molecular POC products, rapid test specialist Chembio Diagnostics recently announced plans to develop a single test for 9 febrile illnesses. Multiplex testing of infections with similar symptoms or syndromic panel testing is increasingly used in healthcare to quickly diagnose patients during admission and initiation of care.

  •   Sekisui’s FastPack® IP System is a fully automated quantitative immunoassay analyzer designed for use in the Physician Office laboratory. Utilizing sophisticated chemiluminescence technology, the FastPack® IP System provides the capability to produce complex immunoassay results in 12 minutes or less with a push of a button. Tests available on the system are: Vitamin D, Testosterone, TSH, Free T4, PSA, and hCG.
  •   OPKO Diagnostics, formerly Claros Diagnostics, Inc., has developed a point-of-care system able to produce laboratory-quality results in about ten minutes. The device includes a pipeline of diagnostic tests and a portable hardware device, and it has been acclaimed for its innovation in multiple publications.
  •   Meridian Bioscience recently launched a line called TruQuick – rapid, one-step diagnostic tests consisting of more than 60 assays, primarily for infectious diseases. The 60-test menu at launch covers the areas of women’s health and infectious diseases, such as HIV, syphilis, and hepatitis B; respiratory diseases and tropical diseases, including dengue, Chagas, and malaria; cardiac immunoassays for creatine kinase-MB, myoglobin, D-dimer, C-reactive protein; and miscellaneous tests for targets like calprotectin and fecal occult blood. Most of the tests are CE-marked and performance data is part of each package insert. The Cincinnati-based diagnostics company has subsidiaries in Beijing, China, Singapore, and Sydney, Australia that constitute warehousing, shipping, distribution, sales support, and customer service in the Asia-Pacific region.

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#4 -Emerging Microbiome Diagnostic Companies

The human microbiome consists of trillions of microbes (bacteria, fungi, archaea and viruses) that exist symbiotically within the human body. These organisms are important, as they perform essential functions that human cells cannot do. There is growing interest and research activity in the microbiome.

Bacteria in the gut, mouth and plaque (biofilms) have been implicated in a number of diseases. Thousands of species of microbes—bacteria, viruses, fungi, and protozoa—inhabit every internal and external surface of the human body. The microbiome’s complicated relationship with its human host is increasingly considered crucial to health. Imbalances in the microbiome’s diverse microbial communities, which interact constantly with cells in the human body, may contribute to chronic health conditions.

Researchers have evaluated specific diseases associated with disturbances in the microbiome, including gastrointestinal diseases such as Crohn’s disease, ulcerative colitis, irritable bowel syndromes, and obesity, as well as urogenital conditions, those that involve the reproductive system, and skin diseases like eczema, psoriasis, and acne, diabetes, autoimmune disorder, acute diarrhea, cancer, mental disorder, and others.

Many diagnostic companies have traditionally not shown interest in the microbiome, and diagnostic companies in this field have primarily been small. Examples of companies offering microbiome diagnostic products or services include Genetic Analysis SA, ISdiagnostics, Metabiomics Corporation, Proderm IQ, and Epibiome. uBiome markets the SmartGut test directly to consumers, although the individual’s doctor must order the collection kits. The direct- to-consumer company Arivale, co-founded by Leroy Hood, MD, PhD, raised $36 million in a Series B financing in 2015. Arivale’s focus is on wellness. Meanwhile, several pharmaceutical companies are active in the therapeutic microbiome market. These include large multinational companies such as Abbvie, Janssen Biotech (one of the Janssen Pharmaceutical Companies of Johnson & Johnson), Merck, Pfizer, and Roche as well as emerging therapeutic companies. Some therapeutic companies have developed the diagnostic tests that are needed for use with their therapies since the diagnostic industry has not met their needs.

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The microbiome in vitro diagnostics market is likely to continue to emerge. Meanwhile, consumer-focused microbiome testing companies are also continuing to attract investments. In July 2017, Viome raised $15 million in a Series A financing. Viome provides a wellness monitoring service that includes using a stool sample to analyze a person’s gut microbiome.

#5 –Multiple Target Liquid Biopsy

Interest is high in non-invasive methods to screen for cancer. While much of this interest is focused on blood-based cancer screening tests, other types of non-invasive screening tests are also attracting attention. At the J.P. Morgan healthcare conference, Guardant Health CEO Helmy Eltoukhy said during the company’s liquid biopsy presentation that it plans to submit to the U.S. Food and Drug Administration a liquid biopsy assay,

Guardant360IVD, by the end of 2018. The firm has also developed a liquid biopsy assay that analyzes more than 500 genes, GuardantOMNI, which it launched in the second half of 2017 and which has so far seen “higher than anticipated demand.” GuardantOMNI is the firm’s second product after Guardant360, a liquid biopsy assay it launched in 2014 that analyzes 73 genes.

# 6 -Rare Diseases Testing

Though a large amount of testing occurs, there are many conditions undetectable by current testing and therefore a need for further diagnostics products. A consortium of researchers called Solve-RD, funded with $18.8 million from an EU healthcare medical research booster, plans to use clinical knowledge and genomics to assist patients with unsolved rare diseases obtain a molecular diagnosis.

The consortium involves participants from 21 organizations in Germany, the U.K., the Netherlands, France, Italy, Spain, Portugal, Belgium, the Czech Republic, and the U.S. The project is coordinated by Olaf Riess and Holm Graessner, both at the University of Tübingen in Germany, with co-coordinators Han Brunner from the Radboud University Medical Center in Nijmegen, the Netherlands, and Anthony Brooks from the University of Leicester in the U.K. According to Graessner, an estimated 30 million Europeans suffer from a rare disease, and about

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Kalorama Information’s The Worldwide Market for In Vitro Diagnostic Tests, 10th Edition.


80 percent of these likely have a genetic cause. Of those patients, about 12 million don’t have a molecular diagnosis yet and might thus benefit from the initiative.

The consortium is working closely with four existing European Reference Networks (ERNs) for rare diseases, virtual networks that each focus on a different disease type and bring together healthcare providers across Europe. Last year, the EU launched the first 24 ERNs, which have more than 900 participants from over 300 hospitals in 26 European countries.

Despite the fact that exome and genome sequencing has helped researchers find many novel rare disease genes, 30 and 80 percent of patients who receive such a test don’t get a diagnosis from it, according to Alexander Hoischen, an assistant professor of immunogenomics at Radboud who leads one of the sub-projects of Solve-RD. Solve-RD aims to change that. Initially, the consortium plans to reanalyze more than 19,000 patient cases, collected by the four partner ERNs, where exome sequencing did not reveal a disease-causing mutation but where the disease is believed to be genetic in origin. Overall, Solve-RD hopes that the reanalysis could solve at least 3 to 5 percent of the unsolved exome cases, and could uncover a number of novel disease genes. In addition to reanalyzing exomes, the consortium plans to explore whether whole- genome sequencing can solve additional cases in selected patient cohorts totaling a few thousand, using both short-read and long-read sequencing technologies.

Solve-RD also plans to move beyond sequencing and employ other omics technologies, depending on the availability of affected tissue samples from patients. For example, the consortium has muscle biopsies for some patients with neuromuscular disease phenotypes that will be analyzed by RNA-seq, using mostly short-read, but in selected cases, long-read technologies. For other groups of patients, the consortium wants to employ mass spectrometry- based proteomics, metabolomics, or epigenomics.

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# 7 -Watch DNA Sequencing Move into In Vitro Diagnostics (IVD) and Towards More FDA Clearances/Approvals

At this time, there are only two FDA cleared next-generation sequencing (NGS) based in vitro diagnostic tests, the Illumina MiSeqDx Cystic Fibrosis Clinical Sequencing Assay and the Illumina MiSeqDx Cystic Fibrosis 139-Variant Assay.

In addition, in the U.S., the FDA has approved the ViroSeq HIV-1 Genotyping System, which is performed on the 3700 Genetic Analyzer and is marketed by Abbott. Outside of the U.S., Abbott also offers the CE-IVD marked Abbott HBV Sequencing Assay. The FDA also approved the TRUGENE® HIV-1 Genotyping Kit and OpenGene®

DNA Sequencing System, although Siemens Healthineers does not currently offer this test on its website.

In addition to these IVD products, on December 2016, the FDA approved Foundation Medicine’s FoundationFocusTM CDxBRCA for use as a companion diagnostic to aid in identifying women with ovarian cancer for whom treatment with RubracaTM (rucaparib) is being considered. Foundation Medicine’s test is performed as a service in the company’s CLIA-certified laboratory. At this time, all other NGS-based and Sanger sequencing-based tests that are performed for clinical applications in the U.S. are laboratory-developed tests (LDTs).

Here’s what the FDA said about NGS tests in a recent
statement: Most IVDs detect only a single or a defined
number of substances to diagnose one or several
specified conditions. In contrast, NGS tests are
capable of detecting the over 3 billion bases in the
human genome, and in doing so identify the approximately 3 million genetic variants an individual may have. A single use of an NGS test could enable the diagnosis of any one or more diseases or conditions a patient presents with. NGS tests can also help to predict a patient’s risk for developing certain conditions. Because it is possible to sequence the whole genome, it is not

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Detailed, Realistic Analysis of the Biotechnology and IVD Markets



necessary to know what variant one wishes to identify prior to running and successfully interpreting an NGS test—a concept which is very different from how traditional IVDs are used.

# 8 -Nutrigenomics

Expect to hear more talk of nutrigenomics and testing aimed at consumers with the purpose of a diet plan. While not an area that traditional IVD companies are creating products in at the current time, the use of DNA sequencing-based
tests to codevelop diet plans is one to take note

of. While scientific evidence isn’t clear on these tests, that won’t stop companies of various persuasions from cropping up to sell such products. Some companies test for genes which have no statistically significant association as published in meta-analyses.

It’s not out of the question that IVD companies would enter nutrigenomic testing:

A market now populated by a mix of companies, including companies without testing market experience, could be an opportunity for established IVD seeking high-volume sales.

Vitamin D testing and cholesterol testing are established areas of IVD testing, and the principle of testing for a nutritional recommendation is not out of the question. Diagnostics for various markers and hormones will affect not only disease detection but diet recommendation from a provider.

Since at least one major food company has entered IVD, it should not be surprising that the reverse would happen as well. Nestle owns Prometheus Laboratories and in July 2017, Enterome and Nestle Health Science announced the creation of a 50/50 joint venture called Microbiome Diagnostics Partners (MDP).

It is important to separate nutrigeonomics (alter DNA transcriptions) from nutrigenetics (mere genetic connection). The genetic tests offered by companies want to give an insight into the risk of various diseases, and related to that give recommendations on how to change a customer’s diet and lifestyle. At that point, the research was really premature and we wondered whether there was scientific evidence and whether these genes were associated with the risk of disease.

Companies were not allowed to do this just a few years ago, or they brought themselves trouble by claiming to do more than what they actually did. There has been a recent approval to 23andMe for the detection of disease and now it’s more common for companies to tell you that you have an increased risk for heart disease, therefore you should adopt a healthier lifestyle. Now the companies are more upfront. They just focus on process genes – genes that have some

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effect on how the body metabolizes a given nutrient. To succeed long term, companies will need to establish a gene-nutrient interaction. That’s more difficult to establish than just a genetic association. They need to show that if they find variation in the response of those genes, how customers need to adjust your diet to obtain the effect they should have.

This is not to say this is an easy-to-navigate area or one without controversy. The Federal Trade Commission (FTC) recently issued a warning to consumers on this topic:

Companies are advertising at-home DNA test kits that promise intriguing insights into your past (―Where did my forebears come from?‖) – and your future (―Do I have the genetic markers for certain medical conditions?‖). If you’re thinking about buying a kit for yourself or a family member, the FTC has advice about protecting the privacy of the

sensitive information that DNA tests reveal. If you think a genetic testing company isn’t living up to its promises, let the FTC know. We’ve brought dozens of cases challenging deceptive or unfair practices related to consumer privacy and data security – including a settlement with a business that sold products based on at-home genetic testing, but allegedly failed to provide reasonable security for consumers’ personal information.

All the more reason for established IVD companies with a record of working with federal regulators to become the leaders in this market if it is to bloom. Lesser operators are going to be on the edge of regulatory trouble.