Bellissima Magazine
March Issue
Website Text

Molecular Diagnostics: San Diego Companies Lead the Way Toward a New Era of Clinical Testing

With as many as 70% of health treatment decisions based on the results of diagnostic tests, which themselves typically account for only 5 to
6% of a hospital's budget, quality care is dependent on accurate and efficient diagnostics. New techniques based on molecular biology, combined with knowledge arising from basic research such as the Human
Genome Project, are combining to produce new tests that make the diagnostic process more streamlined and precise. A number of San Diego companies are contributing to the development of a new era in clinical testing, termed molecular diagnostics.

GEN-PROBE
Gen-Probe, located in Mira Mesa, is the largest company in the world devoted solely to diagnostics, with annual revenues currently in the neighborhood of $400 million. Gen-Probe competes successfully against multi-national companies in several markets. The company produces diagnostic tests for infectious diseases including tuberculosis and the sexually-transmitted diseases Chlamydia and Gonorrhea. Because of their accuracy and ease of use, these tests have been widely adopted by clinical laboratories. Most of the tests are designed to be run using Gen-Probe's signature instrument, the Tigris DTS' System.

According to Michael Watts, Gen-Probe's senior director of investor relations, this unique instrument is the only fully automated platform available. "The technician doesn't have to do sample prep," he said, referring to a process that is typically a series of manual steps that constitute a bottleneck in many labs. Instead of manually uncapping tubes, transferring liquids between tubes and tracking each sample throughout the process, lab techs load samples into the Tigris and walk away, receiving automated reports from the instrument. The innovative quality of the Tigris System was demonstrated when Gen-Probe won the 2004 National Medal of Technology, awarded in recognition of "lasting contributions to America's competitiveness, standard of living, and quality of life through technological innovation."

Gen-Probe also produces tests for HIV and hepatitis that are used to screen donated blood. These tests "have done a tremendous job of protecting the nation's blood supply," said Watts, who noted that the chances of contracting HIV through a transfusion are now less than one in two million. The company is also developing a test for West Nile virus.

Gen-Probe's success has been reflected in its soaring stock price, which has climbed during the previous five years from seven dollars per share to approximately 60 dollars today. Watts attributes this success in large part to the terrific science in San Diego, and to being in the same community as institutions such as University of California, San Diego, The Scripps Research Institute and the Salk Institute. He says the company's more than 450 patents "has enabled us to compete effectively against larger, better-resourced companies."

For example, Gen-Probe's HIV test has an 85% market share, and its STD tests enjoy an approximately 60% market share. In summary, Watts says,
"Gen-Probe has always been a San Diego company, and we want to stay a
San Diego company."

NANOGEN, INC.
One of Gen-Probe's founding partners, Howard Birndorf, is also at the helm of growing diagnostics company Nanogen, Inc. A relatively small company with annual revenues approaching $30 million, Nanogen produces diagnostic assays for infectious diseases and for emergency room identification of cardiac infarction and drugs of abuse.

The company's infectious disease tests make use of a technology called real-time PCR (polymerase chain reaction), which can give labs in several hours results that could take days to weeks using traditional methods. (The initial development of PCR was awarded a Nobel Prize I 1993.) Nanogen's MGB Alert products employ a patented type of PCR chemistry that offers labs a number of advantages such as enhanced trouble-shooting abilities. Most of its PCR products are used in monitoring immuno-compromised individuals. Viruses such as CMV (cytomegalovirus) do not pose a threat to the general public but are a danger to those whose immune systems are depressed due to chemotherapy or the drugs that transplant patients must take in order to prevent tissue rejection.

According to Robert Proulx, Nanogen's vice president of sales and marketing, the company has the "broadest and deepest menu" available for this testing market. Nanogen is "not competing with diagnostic companies in the high volume space of HIV and HPV but has developed an extensive portfolio of products" for the post-transplant market.

Nanogen is also producing tests for the rapidly growing segment of the market known as "point-of-care." Certain tests are beginning to migrate out of clinical labs to be used nearer to patients, either in the emergency room or doctor's office. For example, Nanogen's Cardiac
STATus tests are designed to measure levels of proteins that are released into the blood during cardiac infarction. The tests are intended to deliver additional diagnostic information to emergency room physicians to help them determine the status of admitted patients. Some signs of cardiac events can be subtle and overlooked; according to a New England Journal of Medicine study cited on Nanogen's website, "between 2% and 8% of patients with acute MI (myocardial infarction) who present to the emergency department are sent home." The Cardiac STATus tests deliver results to physicians in 15 minutes and are designed to be stored at room temperature, enabling them to be close at hand in the ER.

Late in 2006, Nanogen was awarded a competitive grant from the Centers for Disease Control and Prevention to develop a rapid flu diagnostic.
Part of the federal government's preparation for a potential influenza pandemic, the goal of the grant program is to develop one test that can simultaneously detect multiple flu strains, including influenza Type A, Type B, seasonal flu (H1N1 and H3N2) and avian flu (H5N1).

Nanogen announced in December of 2007 that the company had reached a milestone in the project. According to Proulx, Nanogen "submitted a good working prototype that meets the specifications of the project."
If the prototype is approved, the project would be funded to complete development of a commercial product.

QUIDEL CORPORATION
San Diego's Quidel Corporation, founded in 1979, is also a developer of point-of-care diagnostics, with tests leading in several markets including streptococcus (the bacteria that causes strep throat) and pregnancy tests for physician's offices. Quidel also markets assays for infectious mononucleosis, Helicobacter pylori (a bacteria linked to gastric ulcers), colorectal cancer, and respiratory syncytial virus (RSV), a common cause of childhood bronchiolitis and pneumonia.

According to Quidel' president and chief executive officer, Caren L. Mason, the company's success is due in large part to its "dedication to the Quidel Value Build (QVB') program, which emphasizes evidence-based medicine through clinical and economic validation." The company takes an active role in forming partnerships with medical advisors, government agencies, and professional societies and also places a high priority on participating in clinical and economic studies that help to define health care standards.

In December 2007, Quidel announced a partnership with Roche aimed at developing a comprehensive approach to managing influenza infection, a collaboration arising from a long-standing dialog on flu management and surveillance between the two companies. During the 2007-2008 flu season, Quidel's QuickVue Influenza A+B test and Roche's Tamiflu, an oral antiviral flu medication, will be utilized together in select U.S. markets. Approximately 500 physician offices in five key metropolitan areas (Los Angeles, Dallas-Ft. Worth, Charlotte, Chicago and New YorkCity) will receive tests and complete a questionnaire regarding their approach to diagnosing and treating influenza cases in their practices.

"The agreement with Roche should allow us to demonstrate what physicians and researchers have been reporting globally, that a rapid test helps to support the appropriate utilization of antivirals, resulting in improved patient care," said Mason. "We anticipate that the resulting data from this collaboration will add further evidence to support the use of a test in influenza diagnostic and treatment protocols."

The future of molecular diagnostics looks highly promising. According to a 2005 report published by market research firm Frost and Sullivan, the molecular diagnostics market is estimated to exceed $3.6 billion by 2010, making it the fastest growing segment of diagnostics. San Diego companies will be growing along with that market, contributing to the region's economy and improving healthcare for people around the world.

# # #