Dx Connex Replay

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.

 

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Global Health Business Weekly (No. 5)

What does it cost in time and money to run a crash vaccine program against a deadly but infrequent disease that occurs in uninsured and underserved people outside the US? The disease, of course, is Ebola, and the program was announced two weeks ago (GSK press release in FierceVaccines). The program’s goal is to complete safety and efficacy tests in about three months, and its costs will be met in part by a $4 million grant from private and government (UK) sources, GSK, and the US NIH. GSK will also receive funding to manufacture 10,000 doses of the candidate vaccine in parallel to be deployed by WHO if the trials are successful. Such success will not only save lives but may provide a model for crash vaccine development programs against other infectious diseases in the rest of the world which have no or limited vaccines like hepatitis C, malaria, and TB.

An effective drug for treating Ebola is also needed, and recently the US Biomedical Advanced Research and Development Authority announced commitment of up to $42 million (10x what is going into the vaccine program) to tiny Mapp Biopharmaceuticals, Inc. for further testing and manufacture of its candidate drug, ZMapp (FierceBiotech article).

At the other end of the funding spectrum, OncoSynergy, Inc. recently announced the start of a crowd-funding campaign to raise $5,000 to test an antibody it is developing to treat cancer against Ebola (FierceBiotech article FierceBiotech article, OncoSynergy press release, and Experiment.com funding page ). My skeptical side says “PR stunt” but I hope I’m wrong and the company has positive results in its in vitro demo.

In the “Nature doesn’t take a day off” category, FierceVaccines reported that an academic study of the polio virus associated with a 2010 outbreak in central Africa found a new, mutated form (FierceVaccines article). The scary part is that the mutated form was not neutralized in vitro by antibodies generated by the current vaccine. Even more scary was that the outbreak had a 50% mortality rate and it was estimated that half of those affected had been vaccinated. Of course, everyone knows that polio was common in the US with 35,000 cases per year in the 1950s and about 1% resulting in limb paralysis until almost universal vaccination was introduced (CDC Polio FAQ).

In the “lost in the noise” category, Gilead mentioned last week that it is in discussion with six generic drug companies about licensing its anti-hepatitis-C drug, Sovaldi (FiercePharma article and Bloomberg article). According to Gilead’s EVP Gregg Alton, the agreements will bring the drug to about 80 developing countries, and the licensing is in addition to Gilead’s plans to sell Sovaldi in India and other countries for $900 per treatment course. The noise, of course, is that Gilead has priced the same treatment in the US at $84,000 which has generated approbation by some payers and members of Congress. Alton noted, however, that this price is the same as that paid by the payers for the older, less effective regime. So I guess the payers are upset not by the cost of treating (and curing) a patient but by the potential demand for the drug. So the overall cost of the drug is the fault of patients and their doctors.

In the “emerging start-up opportunity” category, MIT reported that researchers of the Singapore-MIT Alliance for Research and Technology had built an MRI-like prototype device for detecting the malaria waste product, hemozoin, in blood (Fierce Diagnostics article and MIT press release). The team is starting a company to develop and test a cheaper, portable version that may be faster and more reliable than the current microscopy-based detection. Not mentioned was another diagnostics company founded by an MIT alum, Disease Diagnostics Group, that is using a simpler technology to detect hemozoin and that its prototype is in field testing (Boston Globe article).

More on the Business of Global Health (No. 4)

Here are a few items I spotted over the past two weeks.

FierceDiagnostics reported on the clinical test of a concept for a new diagnostic to identify patients with arteminesin-resistant malaria (Fierce article). Almost all the patients studied (about 1200) had parasites with a unique gene, meaning that the quick test could be used to improve treatment (a longer course of arteminesin or combinations of drugs) or to monitor a population being treated prophylaticly (so-called mass drug administration or MDA). MDA is a controversial approach since it may generate stronger resistance (WHO 2011 report on MDA for malaria).

The ever-inventive research group at Harvard University led by George Whitesides is working on a new approach to portable diagnostics using electrochemical analyses. As reported in FierceMedicalDevices (another Fierce article) and published in the Proceedings of the National Academy of Sciences (Nemiroski et al. 2014), the team demonstrated the device’s function using four tests: the detection of blood glucose, trace heavy metals in water for environmental monitoring, sodium in urine for clinical analysis, and a malarial antigen in blood. Fierce also noted that the team wrote software that allows data transmission via basic, not-smart, cell phones and that the whole system is being tested in India. No word on whether Prof. Whitesides, on whose technology the company, Diagnostics for All, is based, has plans for commercial development.

The product development organization, the Global Alliance for TB Drug Development, and Novartis announced the licensing of all the assets of Novartis’s TB therapeutic development program to the Alliance (TB Alliance press release). The assets included a class of promising drug candidates called indolcarboxamides that the Alliance stated it will continue to study. Not addressed in the press release was why Novartis was giving up on TB therapeutics and whether the Alliance tried to get some cash from Novartis to support its work.

One may hope that the Ebola crisis in western Africa may increase the public’s awareness of the lack of foresight and investment by our global society in the development of treatments for neglected diseases, medical infrastructure in Africa, and international health organizations’ ability to response to infectious disease epidemics. And maybe awareness will result in change. A blog post by Julia Fan Li (Li blog post) and a follow up table of the Ebola product pipeline (Bioentrepreneur table) in Nature’s Bioentrepreneur provided concise and cogent statements of the problem and status of developing treatments for Ebola.

Scott Kirsner, the innovation economy correspondent for the Boston Globe, wrote a column recently entitled the “Losing strategy in Mass. on education and health care” (Kirsner column). His point is a valid one: “Where are the voices talking about expanding access to education and health care, and driving costs down? In Massachusetts, they’re scarce. And that’s a losing strategy.” It is a losing strategy for the long-term health of our local economy which is widely viewed as an exemplar for the future of the US economy. As some readers may remember, I have tooted my horn on the potential for profit in providing low-cost, affordable health care (e.g., my post “Missing the Boat”) and I thank Mr. Kirsner for adding his push.

Bending the Curve Replay

I’m still in vacation mode so here is a post from February of this year.

Clearly, HIV/AIDS is a major public health problem in sub-Saharan Africa where, according to the WHO, about 1 in 20 is infected, 60% of all of the people living with AIDS reside, and 1.2 million died of the disease in 2011. Fortunately, with two decades’ input of money, technology, and organization from local and donor country governments, NGOs, and companies, 10 million of the estimated 35 million infected are receiving anti-viral therapy with a better chance of living a relatively long and productive life. The ideal and long-term goal for the public health system is to bend the incidence and mortality curves downward via prevention, early detection, treatment, and monitoring during treatment. Of course, turning back the epidemic also requires treatment for co-infections like tuberculosis and hepatitis C and improved living conditions and nutrition- a tall order. Progress is being made in turning diagnostic technology into products, and I have noted four advances made over the past year that are worth mentioning.

Last August, a product was released that provides earlier and better detection of infection. Alere, a three billion-plus dollar revenue diagnostics company based in nearby Waltham, MA, received FDA approval for its point-of-care (POC) Determine HIV-1/2 Ag/Ab Combo test, which detects an HIV-1 antigen and antibodies to HIV-1 and HIV-2. As noted in the company press release, it is the first test of its kind, and its ease of use makes it ideal for public health settings where lab-based diagnostics are not practical. While the release also indicates that the test is aimed at the US, the product may deployed to developing world markets in the near future. As I noted in my post last March (“DX Rock Stars”), Alere received a $42 million grant from the Gates Foundation for the development of a tuberculosis POC test (mostly) and for the manufacture of a lab-based HIV viral load test (partly). In that post, I posited that Alere was building a developing world/global health diagnostic business, so this new assay may be part of that business.

More recently, Sedia Biosciences, a Oregon-based early-stage company, was awarded a $1 million NIH Phase II SBIR grant to develop an FDA-approved version of its HIV test that is currently used in public health to assess HIV prevalence (FierceDiagnostics article and Venture Beat article). The assay measures HIV-1 antibody binding ability that is a measure of antibody maturation and therefore an indirect indicator of disease progression. Some research has indicated that, in the US anyway, 40 to 50% of new HIV infections come from infected persons who were recently infected and therefore have high viral loads so finding these recently infected persons may help reduce the overall rate of infection. Since the assay is POC and more informative, it may replace the current widely available, rapid HIV tests in Africa if priced right.

There are two companies that are making progress in the development of products for the monitoring of the response of the disease to treatment. The first is Zyomyx of Fremont, CA, which last June signed a financing and distribution agreement with Mylan Laboratories, Inc. (Mylan), a major generic pharma company based in Pennsylvania, for its CD4-positive T-cell count test, a primary measurement of disease progression (FierceMedicalDevices article). Zyomyx’s test is disposable and low-cost ($10 each), works without electronics or instrumentation, and is therefore ideal for developing-world use. The assay is the result of a novel product development effort by the CD4 Initiative, a program based at Imperial College in the UK and funded by the Gates Foundation that started in 2006 with a call for proposals and the awarding of support to six academic and industrial groups including Zyomyx. In my opinion, this model is worthy of study and imitation for any group, foundation, or company serious about global health product development. As for the next steps, Zyomyx will use the new financing, that totals $12 million of which $6 million is from Mylan and the rest from existing investors including the Gates Foundation, to secure US and other regulatory approvals and to scale up manufacturing. The diagnostic deal is a first for Mylan, and it intends worldwide distribution in conjunction with sales of its antiretroviral drugs that are currently used in more than 120 countries and by nearly 40% of HIV/AIDS patients receiving treatment in the developing world (Zyomyx-Mylan press release). Mylan also has agreed to the “global access” terms accepted by Zyomyx as part of its Gates funding (a total of $16 million it received over five years) that essentially require Mylan to distribute the test at a reasonable price. It will be interesting to see how well the Mylan sales team has done its pre-deal work and what price its customers, probably public health agencies subsidized by donor governments or foundations, will find reasonable (no sales have been announced to date). With a patient base of 10 million growing to millions more in Africa alone and testing done on each about twice a year, even an affordable price should generate tens of millions in annual revenue.

The second company is Daktari Diagnostics that is developing a competing technology for CD4 counts (a portable reader and cassette system requiring no sample preparation) and that I have mentioned in previous posts (e.g., “B2B2B2” ). Daktari is a local firm and one of the few global health companies started with venture capital, about $3 million in 2009 followed by another $6.25 million in 2011. Last May the company raised an additional $7 million with the proceeds to be applied to hiring 126 more employees and building operations in Scotland (Boston Business Journal blog). Last month, the company announced receipt of ISO certification of its device and manufacturing process, an important commercial milestone (Daktari press release). And this week, Bill Rodriguez, Daktari’s CEO, said in an interview that the company is in the process of completing a $25 million Series D round to be used to expand its sales and support staff to service eleven African countries and to support development of additional products (FierceDiagnostics article). Next step should be a sales deal. According to Bill: “We’re looking at initial product orders in the hundreds of thousands of tests.”

Headed East Replay

Recently, I read an interview with Omar Ishrak, CEO of Medtronics, one of the largest medical device companies, in which he said that the company’s emerging market strategy was working but not yielding the goal of a 20% growth rate (it was 10% in 2014, Massdevice interview). Medtronics’ tough road reminded me of a post I put up in March 2013 on medtech companies’ strategies for entering the Chinese market. Here is a replay of that post with a bit of an update at the end.

A couple weeks ago I summarized an Economic Times article on India’s booming medical device industry that now comprises about 700 companies with $5.2 billion in revenues (“Indian Kathi”). The other big medtech boomer is China, that, according to a recent McKinsey report (McKinsey report), has a medical products market four times as large at $20 billion as of 2011. So, I appreciated several insights into that country’s health care/medtech business provided by Stephen Stevens in a posting at Massdevice.com (Simpson blog). Some of his points were:

  • while 90% of the country’s 1.3 billion citizens are covered by a government insurance program that provides for basic care, access for 900 million rural Chinese is a problem;
  • co-pays are high, 20-60% per procedure depending on the relative wealth of the patient’s location and 50 to 70% for medical device, imported and domestic, respectively;
  • the government is starting to control device prices by pooling procurement for national or regional providers;
  • domestic companies are competing with foreign companies on price with complex equipment like ultrasound machines priced at 20-35% less, devices like stents 20-50% less, and consumables as much as 65% less; however, foreign companies still garner 60-70% of device spending;
  • domestic companies are also competing on product quality with a few companies making the jump to the highly-regulated the US and EU markets; and
  • with the increase in access to high-quality, affordable products and government spending on health care, the annual growth in the number of procedures performed is in the teens.

The author also pointed out that several of the larger foreign companies (mentioned are Zimmer, Medtronic, and Stryker) have moved beyond just selling their products and have made strategic acquisitions of Chinese companies to obtain existing low-price product lines and access to lower-cost manufacturing, and he posited that these assets will be useful in entering and competing in other emerging markets.

Doing some positing on my own, I wondered if I were heading a US- and technology-based growth stage company with a novel diagnostics platform, what would my China strategy be? The authors of the McKinsey report implied that diagnostics, especially those that are low-cost and give patients actionable information, may be a good fit with the evolving Chinese market. The report noted that the country is becoming more urban and elderly and more middle class (defined as annual incomes of $7000-27000) with the 30% of total population in 2005 growing to 75% in 2020, hence giving individuals more money and motivation to spend on their health. Moreover, “many highly prevalent and burdensome conditions (such as cancer, depression, and respiratory illness) remain under diagnosed and under treated.”

Based on my admittedly superficial research, I’d say the big multinational diagnostic companies (the test providers like Hoffmann-La Roche and Becton, Dickinson and the service providers like Quest Diagnostics) are not good partners for my company since they have substantial investment in proprietary platforms and are cautious about doing business in China. A counter-example though is Alere, a company I wrote about last week (“Dx Rock Stars” ) that has four ventures in China, covering R and D, manufacturing, and sales (Alere China). A second category of potential partners are the major domestic companies and I found several: Auto Bio, Tecom Science Corp., and ChemClin/China Medical Devices. Without investing in a market research and analysis report, I can’t say which of these have an interest in new technology, have a competitive position, or are even accessible to contact from the US. One up-and-coming domestic company I noted is Kindstar Global, formerly Wuhan Kindstar Diagnostics (Kindstar), which provides central laboratory services to hospitals. Kindstar, as reported by Businessweek (Businessweek article), was founded in 2003, now has 2000 hospitals as customers, and has raised more than $20 million in local and foreign venture capital. One challenge for the company was the lack of a national service to shuttle samples so it built its own network that now engages half its 1000 employees. Part of its growth plan is to expand the number of tests it offers, in part through a licensing deal with the Mayo Clinic’s Medical Laboratories subsidiary.

A company I found that seems poised to enter China that both technology- and US-based is True Diagnostics (True). True “specializes in providing accurate, economical and easy-to-use advanced rapid in vitro immunodiagnostic test systems” using a lateral flow format and a reader to provide quantitative data (True press kit). While the company has about 60 tests in development, only two are approved for sale (tests for PSA and TSH) and it has a manufacturer each in mainland China and Taiwan. Of course, True itself is in the hunt for a corporate partner to adopt its platform so unless it offered a the right manufacturing capability and distribution channels it may not be a good partner for my company.

If my company’s tests were simple enough for home use, another way to enter the Chinese market is by offering over-the-counter kits, those in which a sample is taken and sent to a lab for processing or read by the user. I’m sure there are regulatory/approval challenges, but, given the growing middle class, internet access, and need, an on-line or OTC kit business may be viable. The best known tests widely available in the US are for pregnancy, ovulation, and glucose monitoring, but tests are also sold for infectious disease like HIV and hepatitis C and cholesterol, anemia, allergy, and cancer screening (see list of tests as of 2009 in a Pharmacy Times article). A few model companies are:

  • Quick Check Health, a start-up based in Minnesota;
  • Mode Diagnostics, a UK start-up; and
  • BioIQ  that includes in-home tests as one of its services for “enabling clients to measurably achieve their optimal health improvement goals.”

Yes, there is gold in them thar Eastern hills but good partners, planning, and luck will be needed to find it.

[Update on True Diagnostics: the company recently announced a marketing agreement with Merck KGaA for its thyroid stimulating hormone (TSH) test in China, an important step in positioning the company’s tests for wide use within the Chinese health care system (True Diagnostics press release).]

Fit to Print

Diagnostic tests are critical to the delivery of timely and cost-effective health care, especially in the developing world where infectious diseases are prevalent, non-infectious disease rates are rising, and health care resources are limited. Inventors, investors, and company executives are slowly recognizing the opportunity to develop and sell diagnostic tests specific to the developing and emerging market countries. Here’s my summary of some several notable events over the past year in the global health diagnostics business.

Last April, Lumora, a ten-year-old, 13-employee spin-out of the University of Cambridge in the UK, announced a collaboration with the non-profit Foundation for Innovative New Diagnostics and financed by the German Federal government to develop a rapid field assay for malaria (Lumora press release and FierceMedicalDevices article). The test will use the company’s BART (Bioluminescent Assay in Real Time) technology that it claims is simple and robust and its proprietary sample preparation system that is also simple and requires no outside power. Lumora has sales of products through licensees, one of whom is about to launch a low-cost HIV assay, and closed a second, $1.1 million round of funding in 2013. I could not find any report of progress on the malaria assay.

Also last year in May, a team of researchers from Michigan State University and the University of Malawi published a report on the use and assay for a malaria-specific protein to identify those children who are most likely to progress to the cerebral and likely fatal form of malaria (FierceMedicalDevices article, MSU Today article and Fox et al 2013). A commercial version of this assay could be used to differentiate rapidly between those cases needing only oral drugs and those needing hospitalization (about 1% of all cases resulting in about 100,000 deaths in children under the age of 5 years). The lead investigator, Karl Seydel of MSU, reported that he and colleagues are developing an inexpensive, portable test that I am guessing will utilize the widely-used ELISA format. For anyone or company interested in licensing this technology and speeding its commercialization, the MSU technology transfer office lists it as available (Quantitative Test for Malaria).

Last November, another company joining the biotech IPO gold rush was Oxford Immunotec Global plc which had its first day selling on NASDAQ (FierceDiagnostics article). Immunotec is a 12-year-old, UK-based company whose primary product is the T-SPOT.TB rapid blood test for tuberculosis screening that is an alternative to the skin puncture test with which many of us are familiar. The test is approved for sale in 50 countries, including the US, EU, Japan, and China, and its sales contributed to the company’s $20 million in product revenue in 2013 (total revenue was $39 million, an 87% increase over 2012) (Immunotec press release). The stock opened at $14 per share with sales generating about $75 million, and it is now trading in the mid $17 range. The T-SPOT test detects latent cases of TB, that is, when the patient is asymptomatic, and is therefore most attractive for screening in the developed world, but long term the company sees its lower-cost alternative being used more widely in Asia, starting with China and Japan (Immunotec JP Morgan presentation).

Closer to home and just last week, Cambridge (MA)-based Daktari Diagnostics closed a C round of financing by raising $13 million, primarily from Merck’s Global Healthcare Innovation fund, Norwich Ventures, and Partners Innovation Fund (FierceMedicalDevices article and Boston Business Journal article). The company has raised about $30 million since its founding in 2008 and will use the new funds to bring its CD4 monitoring system for HIV patients to market. According to the BBJ article and Daktari’s CEO, Bill Rodriguez, the system was first launched in Africa a couple of months ago. Also recently, the company received a $2.7 million grant from UNITAID, the Swiss-based NGO that is part funded by a tax on airline tickets of nine countries, to commercialize its system in seven African countries (Daktari press release). UNITAID primarily subsidizes the purchase of medicines and diagnostic tests for HIV/AIDS, malaria, and tuberculosis by governments and NGOs in developing countries (UNITAID About), so this grant looks to be the first of its kind for the organization, that is, to assist a company enter a market. It will be interesting to see how Daktari uses this infusion of private capital to generate revenue.

Dx Connex

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 careHPV 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.