From the vault, my posting on deals in the diagnostics business from March 2014.
Thanks to the excellent reporting of the Fierce newsletters staff, I read two announcements recently about the launching of diagnostic products specific to developing world markets. Both are of interest since the companies involved took different paths to their products and each may be willing to partner with start-up companies for the development of additional tests utilizing the respective proprietary platforms.
In the first, ChemBio Diagnostics, Inc. (ChemBio), a New York-based company, announced two agreements with RVR Diagnostics SDN BHD (RVR), a privately-held company in Kuala Lumpur, Malaysia, that was set up in 2010 to provide point-of-care (POC) diagnostics to Asia (ChemBio press release in FierceDiagnostics). Under the first agreement, ChemBio will transfer the information and knowledge for making its proprietary Dual Path Platform (DPP) assays, grant a license to make a number of DPP-based products, two of which are the company’s HIV 1/2 and HIV-Syphilis Assays, and grant exclusive distribution and sales rights for certain Asian countries. In the second agreement, RVR agrees to manufacture products for ChemBio to sell outside the licensed countries. ChemBio received an unspecified signing fee and presumably fixed pricing for RVR-made assays and will get a future milestone payment and a royalty on sales. As pointed out in the press release, the deal gives ChemBio a cost-effective manufacturer for its products for sale in emerging and established markets (since RVR has agreed to obtain FDA certification for its facility), and RVR gets a proven product line appropriate for low-resource areas.
The agreements with RVR are an important step for ChemBio in expanding its global markets. As a small, publicly-traded company (about $30 million in annual revenues and $2.8 million in profits), it needs to sell through distributors and compete on price. The RVR agreements are similar to those made by the company in 2008 with the Oswaldo Cruz Foundation, a research, development, and supply division of the Brazilian government, also for DPP-based diagnostic products (see my post, “Fio Cruise”). ChemBio is working on a number of DPP tests relevant to global human and animal disease diagnosis (e.g., tuberculosis, malaria, leprosy, leishmaniasis, leptospirosis, syphilis, and influenza; see ChemBio Products) and may be willing to enter cooperative research and development agreements with start-up companies to advance these tests or adopt its DPP platform to other analytes. The ChemBio tests detect protein and are enzyme-based and hand-held.
In the second, Qiagen, a multi-billion dollar company based in the Netherlands (Qiagen), announced the launch of its careHPVÔ test for the detection of human papilloma virus, the causative agent for cervical cancer, in India (FierceDiagnostics article and press release in FierceMedicalDevices). Although in the US and Europe, screening for cervical cancer is common, screening rates in the rest of the world are in the single digits and worldwide cervical cancer is the third most common cancer among women, with approximately 470,000 women having the disease and 300,000 dying each year mostly in South and Central America, sub-Saharan Africa, and Southeast Asia (NCI Cancer Facts). The careHPV test is based on DNA analysis, does not need sample refrigeration, and uses a portable, self-contained (reagents, water, and electricity) and easy-to-use reader. Qiagen apparently will be distributing the test at an affordable price to public health providers as it does in China where the tests and reader are manufactured and where they were first approved for use in 2013 (Biovalley article).
The path to the careHPV product launch is a long one and began with a venture-capital-backed diagnostics company called Digene started in Gaithersburg, MD, in the 1980s (jVen Digene). Digene was a pioneer of molecular diagnosis in which RNA or DNA sequences are read for identification and in 2004 received a $2.2 million dollar grant from PATH to develop, test, and get approved an HPV test using its Hybrid Capture technology (PATH press release). PATH, a leading non-profit developer of global health technology based in Seattle, engaged Digene as part of a $13 million program backed by the Gates Foundation to develop cervical cancer diagnostics for areas of the world with minimal resources and medical infrastructure. Apparently, the progress Digene was making on its PATH test and revenues from its only FDA-approved test (also for HPV) made it an attractive acquisition for Qiagen which purchased the company in a $1.6 billion cash and stock deal in 2007 (Market Watch article). Both Qiagen and PATH conducted trials of careHPV: Qiagen in China, Nigeria, Rwanda, and Thailand, and PATH in China, India, Nicaragua, and Uganda. The latter showed the test can be used effectively even in very basic clinics with much higher sensitivity than other methods and that self-sampling produced useful samples, an important demonstration needed for wide acceptance. I should note that as important as careHPV is to finding HPV infection, the next steps, detection and removal of precancerous cells, require higher levels of medical infrastructure.
What is the next assay for Qiagen to develop for its careHPV reader? I did not find any suggestions on the Qiagen or PATH websites but think it should be obvious to use the platform for additional molecular diagnostics. I’m assuming that PATH has thought along these lines and is looking for a research and development partner for new assays for global health, but then I lean toward optimism.