October 2015

medtechFrom the publishers of Nature

Dedicated to nurturing collaboration and partnerships in the medical technology industry

Medtech partnering: Megamergers and digital health

The realization of precision medicine

Demand for cancer technologies drives dealmaking

As originally published in the October 2015 editions of Nature Biotechnology, Nature Medicine and Nature Reviews Drug Discovery as an advertising feature.

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medtechFrom the publishers of Nature

MEDTECH DEALMAKERS OCTOBER 2015www.nature.com/medtechdealmakers

PUBLISHING TEAMHead of Publishing ServicesRuth Wilson

EditorRaveena Bhambra

Editorial AssistantChristine Janssen-Seijkens

Business Development TeamClaire ThompsonSamia BurridgeVeronica Zacatenco

Profi le WritersSuzanne ElvidgeJackie KellyPam KershawDolly KoltchevMary Lee MacKichanGaspar Taroncher-Oldenburg

Feature WritersAaron BouchieMelanie BrazilNick Taylor

ProductionRichard ThomasJason Rayment

MarketingVirginia Lee

Note: Companies that appear in this table of contents have paid for their advertisement features and have fi nal approval of their content. If you would like to appear in the next MedTech Dealmakers please contact: Claire Thompson | c.thompson@nature.com

FEATURES

M2 KEY DRIVERS IN THE MEDICAL TECHNOLOGY DEAL LANDSCAPEVenture capital investment in devices remains lackluster, but megamergers and startups in digital health, drug delivery and minimally invasive technology are providing new impetus to today’s evolving medical technology industry.

M8 GENOMICS TECHNOLOGIES MARCH INTO NEW MARKETSNext-generation sequencing platforms are building market share not only in the research setting but also increasingly in population research and clinical applications.

M15 PRECISION MEDICINE’S INVIGORATING EFFECT ON CANCER MEDICAL TECHNOLOGYGlobal recognition and advances in precision medicine have led to new approaches in cancer treatments and a consequent increase in dealmaking.

PROFILES

M4 LOHMANN & RAUSCHER

M5 BTG

M6 THE UNIVERSITY OF TOKYO

M10 NUGEN TECHNOLOGIES

M11 DNANEXUS

M12 INVIVOSCIENCES

M13 BIOCARTIS

M14 PACIFIC EDGE

M16 HISTIDE

M17 BIOPHARMA SNAPSHOT

October 2015

medtechFrom the publishers of Nature

Dedicated to nurturing collaboration and partnerships in the medical technology industry

Medtech partnering: Megamergers and digital health

The realization of precision medicine

Demand for cancer technologies drives dealmaking

As originally published in the October 2015 editions of Nature Biotechnology, Nature Medicine and Nature Reviews Drug Discovery as an advertising feature.

MedTech Dealmakers October 2015 cover.indd 1 10/09/2015 14:48

MedTech Dealmakers contents October 2015.indd 2 16/09/2015 10:06

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Key drivers in the medical technology deal landscapeVenture capital investment in devices remains lackluster, but megamergers and startups in digital health, drug delivery and minimally invasive technology are providing new impetus to today’s evolving medical technology industry.

AARON BOUCHIE

The first word that comes to mind when thinking about recent dealmaking trends in the MedTech space is ‘megamerger’. This

trend was epitomized by Medtronic’s acquisition of Covidien for $49.9 billion in January 2015. The new combined company is by far the largest in the MedTech space, with more than 85,000 employees in 160 countries, $27.8 billion in rev-enues in 2014 and $2 billion in R&D spending. But that was not the only example of consolida-tion in the top tier: Zimmer Holdings acquired Biomet for $14 billion in June 2015, and Becton Dickinson bought CareFusion for $11.7 billion in March 2015 (Table 1).

Although the early-stage MedTech space remains much smaller than biotech, companies pioneering minimally invasive technology have been spurring recent deal activity. Indeed, at least 19 of the 102 acquisitions during 2014 and the first 6 months of 2015 were in this space. Two other key developments in the space have been a spurt of activity around drug delivery devices and startups in the digital health space.

A consolidating industry As is often the case when industries undergo con-solidation among top-tier companies, increasing the bottom line via cost synergies is a clear driver of deal trends. Although such types of deals will likely continue given the amount of cash the larger MedTech companies have on hand, both large

and medium-sized companies also have shown an appetite for smaller companies, albeit those with marketed, de-risked, innovative products. Medtronic, for example, spent billions to acquire at least nine additional companies in 2014 and the first half of 2015, all but one of which have marketed products.

Elsewhere, other companies have been re focusing their businesses on more profitable sectors. Wright Medical, for example, has used mergers and acquisitions to refocus its busi-ness on biologics and on orthopedics products for the extremities. According to Julie Tracy, the company’s SVP and chief communications officer, the upper extremity, lower extremity and biologics markets are three of the fastest growing areas in orthopedics. She believes that all of these areas are under penetrated and will continue to benefit from product innovation. To achieve these ends, in 2014 Wright unloaded its OrthoRecon hip and knee business to MicroPort Scientific for $290 million and acquired OrthoPro, Solana Surgical and Tornier. For $32.5 million plus up to $3.5 million in revenue-based earn-outs, the OrthoPro deal gave Wright numerous foot and ankle devices, as well as some tissue grafts. Solana Surgical, acquired for $90 million, provides numerous foot bone implants and other musculoskeletal surgical products. Wright’s largest deal was the $1.2 bil-lion all-stock acquisition of Dutch company Tornier NV. Billed as a merger, the deal granted Wright

shareholders 52% of the combined entity. Tornier offers nearly 100 upper and lower extremity prod-ucts for joint replacement, bone repair and soft tissue repair, plus several biologics. Tracy said the company expects to perform more acquisitions in the future, but it is currently focused on closing the Tornier transaction.

Such deals are taking place in a MedTech eco-system that not only remains much smaller than biopharmaceuticals but also has languished in a prolonged downcycle for most of the past decade as a result of poor returns, regulatory and re imbursement challenges and limited access to public financing markets. While the public markets certainly opened in 2014 and the first half of 2015, with 43 IPOs averaging $55.8 million, biotech's numbers have still outshone MedTech's. Timothy Haines, managing director at VC firm Abingworth, says that the macro-economic environment is very important to future trends in public investment. Given the general attitude towards public equities since the Chinese markets began tumbling this summer, Haines believes that public investors may soon find MedTech's low-risk, low-reward profile to be more attractive than high-risk drug developers.

Innovation in the space has also been con-strained by a limited number of active venture funds, including Abingworth, Canaan Partners, Domain, Lightstone Ventures, NEA, Orbimed and Versant Ventures. In this respect, a positive development in the area is the increasing influx of cash into MedTech from corporate venture funds. Whereas pharma companies’ corporate venture funds have been an important source of investment for biopharma startups for more than a decade, MedTech corporate venture funds have been few and far between. Haines says he has seen more activity in this area, with larger companies seeding new startups. For example, Boston Scientific led a series A round of $5.9 mil-lion for InterVene in March 2015. The startup is developing a minimally invasive, catheter-based approach to treat chronic venous insufficiency. The technique creates new deep vein valves from a patient’s own vein wall tissue, with aims of being the first to correct the underlying cause of disease.

Even so, it is hard to see innovative startup activity taking off in MedTech without more exit opportunities for investors. Particularly in the con-text of few IPOs, most venture capitalists (VCs) are faced with a rather limited pool of buyers. This pool includes such companies as Abbott, Boston Scientific, CR Bard, GE Healthcare, Johnson & Johnson, Medtronic, St. Jude Medical, Stryker, Wright Medical and Zimmer. But with this small selection, there is a restricted number of trade-sale exits that can happen each year. Compared with big pharma, there is also less impetus for

Table 1. Recent high-value MedTech mergers and acquisitions.

Date Headline Companies Deal value

(US$M)

January 2015

Medtronic buys Covidien PLC Medtronic PLC and Covidien PLC 49,900

June 2015 Zimmer buys Biomet Zimmer Biomet Holdings, Inc. and Biomet, Inc.

14,000

March 2015 Becton Dickinson acquires CareFusion

Becton Dickinson & Co. and CareFusion Corp.

11,771

July 2015 St. Jude Medical buys Thoratec St. Jude Medical, Inc. and Thoratec Corp. 3,474

January 2015

EQT acquires Siemens audiology business

EQT and Siemens AG, Siemens Audiology Solutions and Siemens Healthcare

2,700

March 2015 Mallinckrodt buys Ikaria Mallinckrodt PLC and Ikaria, Inc. 2,300

September 2014

Danaher Corp. acquires Nobel Biocare Holdings AG

Danaher Corp. and Nobel Biocare Holdings AG

2,265

June 2015 Hill-Rom acquires Welch Allyn Hill-Rom Holdings, Inc. and Welch Allyn, Inc.

2,049

March 2015 Cardinal Health buys Cordis Cardinal Health, Inc., Cordis Corp. and Johnson & Johnson

1,944

May 2014 Smith & Nephew acquires ArthroCare

Smith & Nephew PLC and ArthroCare Corp.

1,500

*Data sourced from Informa’s Strategic Transactions (https://www.pharmamedtechbi.com/deals).

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system, for $250 million plus undisclosed regulatory milestones. Also this year, Edwards Lifesciences acquired CardiAQ, which is currently recruiting patients for two clinical trials of its TMVR system, for $350 million plus another $50 million upon reaching a regulatory milestone in Europe.

The largest deal for minimally invasive technolo-gies was Smith & Nephew’s $1.5 billion acqui-sition of ArthroCare completed in May 2014. ArthroCare develops and markets minimally inva-sive surgical devices that incorporate its Coblation RF technology. The company utilizes the technol-ogy in its two major business segments, sports medicine and ear, nose and throat. The Coblation-equipped instruments operate at lower tempera-tures than traditional RF-based electrosurgical devices and lasers. As a result, they are able to dissolve tissue in a less invasive manner, thereby decreasing harm to surrounding healthy tissue. ArthroCare also markets more traditional musculo-skeletal devices, such as knotless anchors, the Opus AutoCuff suturing system, and PEEK (poly-etheretherketone) and titanium anchors for hip and shoulder labral repair.

Drug delivery technologyWhen it comes to alliances, drug delivery technolo-gies have led the charge and are only increasing. In 2014, there were 14 such deals, and 11 more took place in the first half of 2015.

In the largest of these deals, in November 2014, Intarcia Therapeutics granted Servier exclusive rights to develop and commercialize type 2 dia-betes candidate ITCA650 worldwide (excluding the United States and Japan). ITCA650 is a match-stick-sized subdermal pump that delivers exena-tide, a glucagon-like peptide 1 (GLP-1) agonist. The product can be implanted via a five-minute in-office procedure and needs to be administered only once or twice each year. The drug-device combination has completed three phase 3 trials and is cur-rently in a fourth. Intarcia received $171 million up front and is eligible for $880 million in milestones, plus royalties ranging from the low double-digits to the mid-30s. Haines believes drug delivery deals will become increasingly important, particularly when it comes to delivering larger molecules, cell therapies and gene therapies.

In terms of innovation, substantial funding is now being aimed at the intersection of drug deliv-ery technology and what is known as digital health, in which ‘smart’ tech converges with healthcare. In June 2014, venture capital fund Canaan led a $32 million series A round for Chrono Therapeutics, which is developing a drug–device combination for smoking cessation. Chrono’s SmartStop is a wear-able device that provides programmable, trans-dermal nicotine-replacement therapy in combina-tion with real-time behavioral support. The device keeps track of daily peak nicotine-craving patterns and automatically varies nicotine levels throughout the day to manage the cravings. Eliminating crav-ings and withdrawal symptoms, rather than just alleviating them, increases quit rates, a ccording to VC Brent Ahrens, general partner at Canaan.

Digital health Apart from drug delivery, digital health is making inroads in several other areas, such as consumer

health. The highest-profile deal in this area was Novartis’s Alcon eye-care division’s collaboration to develop Google’s “smart lens” technology, which embeds noninvasive sensors, microchips or other miniaturized electronics in contact lenses. The partners are first developing a lens that meas-ures glucose levels in tears and transmits the data to a wireless mobile device, eliminating the need for diabetes patients to perform finger pricks throughout the day. The companies’ second area of focus is the development of a product that pro-vides accommodative vision correction in the form of a contact lens or intraocular lens for patients with presbyopia.

Overall, according to incubator Rock Health, venture funding for digital health companies in the first half of 2015 reached $2.1 billion. Five companies—Evolent Health, Fitbit, Invitae, Mindbody and Teladoc—floated successfully on the public markets.

Both Haines and Ahrens are very interested to see what innovations come out of digital health. But a big question remains: how regula-tory approval and reimbursement environment will evolve. Ahrens says that most VCs are able to exit their investments in MedTech startups—either by acquisition or by going public—only once they have an approved product on the market, and often only after they have established sales. What has changed in recent years is the number of device clinical trials required by the US Food and Drug Administration, which is higher now than it was in the past. Once a device is on the market, companies also need to generate more cost-effectivenes s data in order to satisfy payors’ demands. The upshot is that VCs need to put much more money into MedTech firms before they see any returns, and the returns are often smaller. For example, Canaan typically obtains 4× returns in 6–10 years in MedTech companies, compared with between 3× and 15× returns in about 4 years for biotech investments, according to Ahrens. As a result, MedTech startups will need to not only have highly innovative technology to attract early investors, but also understand how their products will navigate and prosper in the regulatory and payor worlds.

Aaron Bouchie is a freelance analyst, writer and editor who covers the biotechnology, pharmaceutical and medical device industries.

these large MedTech companies to look for innova-tions, because they don’t face the same pressures of immediate generic competition and patent cliffs.

One dark-horse buyer new to the MedTech space is healthcare services company Cardinal Health. Cardinal distributes pharmaceuticals and medical products to hospitals, ambulatory surgery centers, clinical laboratories and physician offices, in addi-tion to operating the largest network of radio-pharmacies in the United States. The company expanded into the MedTech arena in April 2014 by acquiring AccessClosure for $320 million. With the acquisition, Cardinal gained the Mynx femoral artery sealing system and the Flash ostial system dual-balloon angioplasty catheter for stent apposi-tion procedures. In May 2015, Cardinal made its biggest purchase, paying $1.9 billion for Johnson & Johnson’s Cordis stent business. Cardinal also entered the wound-management business by acquiring Innovative Therapies and orthopedic trauma–products manufacturer Emerge Medical. Whether other healthcare services companies will also take advantage of their distribution networks to sell their own branded products remains to be seen.

Of the remaining sectors that have seen signifi-cant deal activity, one of the most active has been minimally invasive technologies.

Minimally invasive technology Interest in minimally invasive technology is noth-ing new. Several years ago, Medtronic splashed out $800 million on Ardian, a medical device startup pioneering the approach of renal denerva-tion. That approach involved a minimally i nvasive endovascular catheter–based procedure in which radio frequency (RF) waves were aimed at renal nerves with the aim of treating hyperten-sive patients resistant to standard therapies. Unfortunately, shortly after the acquisition, the device failed to meet its endpoint in a pivotal phase 3 trial. This not only sent shockwaves through the sector but also curbed the appetite of large companies for startups with experimental and innovative products.

That relatively conservative attitude may now be changing again. Donald E. Bobo, Jr., corporate VP of corporate strategy and corporate development for Edwards Lifesciences, notes that there is a broad focus in MedTech on making procedures or monitoring less invasive, either through catheter-based approaches or through minimally invasive therapies and technologies. Of 19 acquisitions for minimally invasive technologies during 2014 and the first 6 months of 2015, 12 were for products that accounted for the top two areas of acquisition: surgical equipment and devices (7) and cardio vascular (5) according to data from Informa's Strategic Transactions.

In August 2015, Medtronic announced it was acquiring Twelve for $458 million up front and $50 million once the company’s transcatheter mitral valve replacement (TMVR) device receives CE-marking in the European Union. Abbott and Edwards Lifesciences also have made large acquisitions in the space in the past few months. In September 2015, Abbott acquired Tendyne Holdings, which is currently enrolling patients in a clinical trial for its bioprosthetic mitral valve

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Lohmann & Rauscher GmbH & Co. KGwww.lohmann-rauscher.com

Advanced wound healing through partneringLohmann & Rauscher, a leading international provider of high-quality medical devices and hygiene products for hospitals, medical practices and consumers for over 160 years, is looking to identify partners to drive innovation in advanced wound care over the next decade.

B uilding on its extensive experience in the development and commercializa-tion of wound-healing solutions, from

conventional dressings to more sophisticated wound therapies (e.g., negative pressure wound therapy), Lohmann & Rauscher (L&R) is looking for new opportunities to establish partnerships in advanced wound care to drive innovation in the space for decades to come.

Unlike healing acute small wounds, which for the most part is not problematic, the treatment of larger and deeper acute wounds—such as those caused by burns or traumatic injuries—or hard to heal wounds associated with certain diseases—such as diabetes or persistent infec-tions—requires a suite of solutions that are more complex than a simple dressing. Opportunities for innovation cover a variety of areas ranging from new materials and medical technology solu-tions to new therapy concepts (Box 1).

“L&R prides itself in nurturing a culture of inno-vation in the medical field,” said CEO Wolfgang Suessle. “Our corporate philosophy is to be the preferred solution provider and a reliable partner in the fields of medicine, nursing and hygiene worldwide.”

A healing pipeline L&R’s extensive pipeline of medical technology solutions for advanced wound care includes prod-ucts in all stages of development.

In the area of negative pressure wound thera-pies, for example, L&R is expanding its portfolio through the development of sophisticated solu-tions and new applications in close collaboration with clinicians. New applications are tailored to every wound phase and indication.

At the cellular level, and together with a startup company, L&R is developing an alternative medi-cal technology that mediates wound disinfection and wound healing simultaneously. The preclini-cal research associated with this project is being performed by two other research organizations in L&R’s partner network.

Another ongoing effort at L&R is the R&D of novel antimicrobial products for either improved efficacy (e.g., next-generation antimicrobials) or additional benefits such as effectiveness against biofilm. In the area of biofilm control, for example, L&R is collaborating with the University of Florida and the University of Copenhagen.

According to Suessle, “Our in-house and exter-nal R&D activities are the foundation on which our company was successfully developed. We invest in extensive research to develop new prod-ucts and to find the best solutions for patients and medical professionals.”

Partnership ethosL&R is an international family-owned company that has built its reputation on both the quality of its reliable products and services and its fair-ness and transparency with its partners. With four R&D sites strategically located in Germany, Austria, France and the United Kingdom and over 4,100 employees worldwide, the company is well positioned to offer the best value proposition to potential partners ranging from startups and smaller companies to established enterprises. Each new partnership opportunity is welcome and will be carefully evaluated and reviewed by the L&R innovation team.

“The secret of our success throughout our long history has also been recognizing trends in the healthcare markets at an early stage and proac-tively integrating them into our business activi-ties,” said Katharina Merz, head of innovation management at L&R. “We have always been keen to set up new collaborations with research organi-zations and universities as well as with individual researchers or clinicians.”

L&R has a very flexible approach to partner-ships and will work with potential partners to develop and implement a business model that is best suited for each individual situation and for both partners. Cooperation arrangements can range from joint development or straight licens-ing agreements to the formation of joint venture companies and even mergers and acquisitions. For example, L&R is a shareholder of the Austrian Center for Medical Innovation and Technology and is working with the center on projects such as the development of sensors for wound diagnostics.

One example of an L&R asset deal is the bio-cellulose dressing Suprasorb X from startup company Xylos Corp. In this deal, L&R acquired patents surrounding the technology. On the basis of this development, the company successfully launched a product with exciting wound-healing characteristics while continuing to develop this biomaterial product in collaboration with the University of Natural Resources and Life Sciences, Vienna.

On the other end of the spectrum, L&R has his-torically differentiated itself from its competitors by establishing a number of long-standing collab-orations with research organizations to develop new materials and platforms. At the University of Natural Resources and Life Sciences, Vienna, L&R is an active member of the Christian Doppler Laboratory for Advanced Cellulose Chemistry and Analytics; at the Universities of Copenhagen and Florida, L&R is involved in research programs to further biofilm research.

According to Suessle, “L&R’s biggest strength is its ability to translate medical needs into excel-lent products and solutions owing to its unique combination of access to users, its high-quality manufacturing practices and its vast collaborator network, allowing L&R to seize opportunities and rapidly develop innovative ideas.”

CONTACT DETAILSKatharina Merz, Head of Innovation ManagementLohmann & Rauscher GmbH & Co. KGNeuwied, GermanyTel: +49 2631 99 6067Email: katharina.merz@de.lrmed.com

BOX 1: FACTS ON POTENTIAL PARTNERING OPPORTUNITIESKey medical areas

� Wound healing

� Infection control

� Hemostasis

� Pain prevention, relief and control

� Scar prevention and treatment

� Regenerative/personalized medicine

Key technological areas of innovationIngredients and materials for wound care products:

� New materials, including biomaterials

� Biocompatible materials consisting of proteins, enzymes, cells and/or tissues

� Next-generation antimicrobials with low potential for resistance and toxicity

� Antibiofilm agents for infection control

Medical technologies for wound care:

� New medical technologies for all areas of wound care

� New applications for negative pressure wound therapy

� Diagnostics, sensors and biomarkers for wound evaluation, preferably with a subsequent treatment recommendation

� Smart solutions

New therapy concepts � Holistic approaches, from diagnostics via debridement to healing

New solutions should: � Be directly related to an indication and provide a clear path to application

� Have a target implementation of no more than 5–10 years

� Not be a pharmaceutical (although these are not categorically excluded)

Lohmann & Rauscher.indd 4 15/09/2015 11:32

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BTGwww.btgplc.com

Driving innovation in interventional medicine BTG combines medicines, device technology and new techniques to deliver more targeted treatments, and is leading the way in bringing these innovative interventional medicine therapies to market.

Image-guided, minimally invasive therapies are fast replacing traditional surgical procedures and, where

appropriate, systemic drug treatments, bringing many benefits to patients and physicians. The trend is driven by improvements in imaging technologies, coupled with interventional medicine techniques that use relatively small access points into the body, such as a minor leg incision to gain arterial access or entry via the airways to treat a lung.

BTG is an international specialist healthcare company with a growing portfolio of innovative interventional medicine therapies inspired by the needs of specialist physicians and their patients. “We have products in our portfolio that really benefit patients, are important to the physicians who use them and have a great impact on clinical outcomes,” said Peter Stratford, chief technical officer at BTG. “It’s that real focus on what is important to patients and the physicians who use our products that I think sets us apart from other companies.”

Growing portfolioAlongside BTG’s specialty pharmaceuticals and licensing operations, interventional medicine is now BTG’s fastest-growing business area. Established through a series of strategic acquisi-tions, the portfolio includes interventional oncol-ogy, vascular and pulmonology products (Fig 1).

BTG entered interventional oncology in 2011 when it acquired Biocompatibles International and its portfolio of embolizing and drug-eluting bead products for the treatment of liver tumors. TheraSphere, which comprises millions of glass microspheres containing radioactive yttrium-90, was added to the product line after acquisition from Nordion in 2013.

BTG’s interventional vascular business also grew in 2013 when the company acquired EKOS Corporation and its EkoSonic Endovascular System, which uses innovative ultrasonic accel-erated thrombolysis technology to treat severe blood clots and pulmonary embolisms. The device complements BTG’s Varithena (polido-canol injectable foam) product, launched in the United States in 2014 to treat varicose veins.

More recently, BTG entered the emerging area of interventional pulmonology after completing the acquisition of PneumRx and its PneumRx Coil in early 2015. This innovative treatment for patients with advanced emphysema consists of small shape-memory Nitinol implants designed to tighten the airway network when placed in a diseased lung.

Underserved patient populationsTogether with physicians, BTG identifies the unmet patient and physician needs that can be met by novel, minimally invasive solutions. It then supports these efforts with significant investments to generate high-quality data that enhance the potential of the new therapy. In 2014, the company invested more than US$100 million in R&D, over half of which funded indication expansion and product innovation.

For example, since acquiring TheraSphere, BTG has accelerated three phase 3 trials of the product in the United States to support pre-mar-ket approval (PMA) applications for advanced hepatocellular carcinoma and second-line treat-ment for patients with metastatic tumors in the liver from colorectal cancer. There is also a fully recruited phase 3 study in the United States to support a PMA application for the PneumRx Coil, as well as a pivotal study to support label expan-sion of EkoSonic into the treatment of chronic deep vein thrombosis and post-thrombotic syndrome.

Once new therapies are approved, BTG mea-sures endpoints such as patient quality of life and cost-effectiveness, which are important to payers and for physicians making a case for their use within a hospital system. “We bring real focus and an understanding of the interven-tional medicine area, including how to work with novel technology, how to generate the clinical data and how to work with the payers and reim-bursers, to make sure that those products are successful,” said Stratford.

Importantly, BTG’s capabilities include bringing drug-device combinations to market, a process that can be complex from a regula-tory perspective. “As the world of medicine becomes more complicated, some things cease

to be easily characterized as either a medicine or a device, and from that point of view I think we are very well placed,” said Stratford. Varithena, for example, combines a propri -etary microfoam-generating device with a low (1 %) concentration of the sclerosing agent polidocanol and is regulated as a drug by the US Food and Drug Administration (FDA). It was FDA approved in November 2013 for patients with incompetent veins and visible varicosities of the great saphe-nous vein system.

Geographic expansion is another growth driver for BTG; it recently opened a regulatory and medical hub in Hong Kong supporting expansion in Asia, and established new direct-sales

forces in Europe and Taiwan. The company’s bead product was recently approved in China.

Future opportunitiesBTG is set to become a world leader in interven-tional medicine therapies by 2021, and expects to earn over US$1.25 billion of revenue through organic growth of the current portfolio. The company remains open to relevant partnering or acquisition opportunities, focusing on products and expertise that complement its core areas in interventional oncology, vascular medicine and pulmonology. “In particular, we would seek to acquire high-content technologies that offer opportunities to maximize potential through our unique capabilities,” said Charles Brigden, head of business development at BTG. “We also continue to seek opportunities to build our estab-lished specialty pharma business.”

In return, potential partners can benefit from BTG’s growing interventional medicine sales force, regulatory capabilities and care-ful approach to integrating the businesses it acquires. “The benefit for the partner or acquired company is that they retain the entrepreneurial nature of their business and are able to realize their ambitions, but with the support, resources and infrastructure of BTG,” said Brigden.

CONTACT DETAILSBTG Business DevelopmentLondon, UKTel: +44 (0)20 7575 0000Email: bd@btgplc.com

Figure 1: BTG has a growing interventional medicine portfolio comprising interventional oncology, vascular and pulmonology products.

BTG Business Development.indd 5 16/09/2015 10:08

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The University of Tokyowww.u-tokyo.ac. jp/en

The University of Tokyo:leader in advancing innovationThree collaborative platforms—a Center for Innovation (COI), a tripartite industry-academia group (DUCR, TLO and UTEC) and the Translational Research Initiative (TRI)—showcase the University of Tokyo’s commitment to the development and commercialization of new healthcare technologies.

I n Japan, the national universities, including the University of Tokyo, have long been at the forefront of scientific and technological

research, but it was only with the passage of the National University Incorporation Law, in 2003, and the granting of independence to the national universities, in 2004, that the universities started developing strategic approaches to maximize the returns on their research investments. With great freedom and control over their intellectual capital also came increased pressure and opportunity for the universities to boost their role in shaping technological development through all sorts of collaborations with industry partners.

The University of Tokyo was quick in setting itself apart by establishing a technology-transfer organization in 1998 and then University of Tokyo Edge Capital (UTEC), a venture capital fund that invests in the university’s startups, in 2004 (the firm currently manages assets with a combined value of $250 million). Both organizations are headquartered at the University of Tokyo and work together with the Division of University Corporate Relations .

But in addition to getting directly involved in advancing innovation through direct funding, the University of Tokyo has become a catalyst for early collaborations between academics and industry, as exemplified by its Translational Research Initiative (TRI), an interdisciplinary orga-nization that facilitates drug development and is a key player in large, multicollaborator, long-term national research efforts such as the Japanese Ministry of Education, Culture, Sports, Science and Technology (MEXT) Center of Innovation (COI) program, which brings together industry and aca-demia to conduct challenging and high-risk basic research that is expected to lead to commercial-ization within 10 years.

The University of Tokyo is committed to advanc-ing innovation at all levels and offers a broad spectrum of opportunities for collaboration.

Open collaborationIn 2013, MEXT’s COI Science and Technology–based Radical Innovation and Entrepreneurship Program announced the first round of funding for COIs in three ‘blue-sky’ research areas: (i) health in an aging society, (ii) quality of life and (iii) sustainable society. Each COI receives up

to ¥1.1 billion ($9.2 million) annually, for up to 9 years, to develop and manage a collaborative effort among industry, university and government in one of the three blue-sky areas.

The University of Tokyo was awarded two COI programs—one on the ‘sustainable society’ track focused on the development of novel pho-ton-centered research-and-manufacturing tech-nologies at the Innovative Center for Coherent Photon Technology, led by Makoto Gonokami, current president of the university, and a second in ‘health in an aging society’.

The latter COI, dubbed the Self-Managing Healthy Society COI, has been tasked with devel-oping a new self-managed healthcare system in which elderly people improve their general health and enjoy a high quality of life for a longer period. To realize this vision, 33 principal investigators at the University of Tokyo and 26 companies are cooperating in the program (Fig. 1).

The director of the COI, Tomihisa Ikeura, was for-merly a managing executive officer at Mitsubishi Chemical Holding and has a strong background in R&D and corporate strategy–planning in a broad range of business areas including chemicals, polymers and healthcare. The deputy director for business development is Chisato Nojiri, who was a key player in the commercialization of the world’s first maglev centrifugal pump–based ventricular assist system at Terumo Corporation and is currently a senior research fellow at the graduate schools of engineering at the University of Tokyo. The deputy director for research is Ung-il Chung, a professor at the University of Tokyo graduate schools of engineering and medicine.

A vision for healthy agingPopulation aging and the social isolation of elderly people that comes with it are on the rise globally, and Japan is home to the most rapidly expanding elderly population in the world1.

One of the key contributors to the burden of an aging population on healthcare expenditure, and the social security system overall, is the gap between life expectancy and healthy life span. According to the latest data from the Japanese Ministry of Health, Labor and Welfare, in Japan this gap amounts to about 9 years for men and almost 13 years for women.

The University of Tokyo’s COI on health in an aging society is now applying an open-innovation approach to combine a wide range of existing and emerging technology assets at the university and clinical resources of the University of Tokyo Hospital to build solutions that could help reduce

the number of hospitalizations and outpatient visits for elderly patients. For the industry part-ners involved with the center, the program helps de-risk their investment in innovative, early-stage projects and provides them with an opportunity to get first movers’ advantage on emerging busi-nesses. Such an environment, with its emphasis on open collaboration and public-private partner-ship, fosters a targeted approach to developing healthcare solutions for a sustainable world.

To fulfill its vision, the COI is prioritizing the development of a platform related to medical and healthcare information and communica-tion technology that will provide individuals with information and insights on their clinical, healthcare and lifestyle history. Health-related ‘big data’ are gathered from individual clinical records at the University of Tokyo Hospital, medical check-up data, genomic profiles and other lifestyle-related data streams such as exercise and dietary records.

The goal of the platform is to help understand asymptomatic and symptomatic stages of dis-eases such as metabolic and locomotive syn-dromes, cancer and dementia that affect the quality of life of elderly people. In the case of cancer, for example, the COI has started col-lecting whole-genome clinical sequencing and epigenomic information from patients to improve early diagnosis and treatment.

The COI is also developing a portable device for minimally invasive diagnosis of a range of condi-tions to help shorten hospital stays and reduce patients’ need for clinical access. Development of devices for ultra-early diagnosis and for the delay of disease progression is also under way.

Finally, the COI has established solid lines of communication with Japan’s Pharmaceuticals and Medical Devices Agency and National

“The next-generation healthcare business to support Japan’s super-aged society cannot be created by a single company.”TOMIHISA IKEURA, COI

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Institutes of Health Sciences to streamline R&D and the regulatory path to ensure realization of the vision of a self-managing, healthy, long-lived society.

“The next-generation healthcare business to support Japan’s super-aged society cannot be created by a single company. Our COI, by making the most of its ‘R&D-Under-One-Roof’ system, aims to greatly contribute to the development of a new social system by enabling cooperation across business categories,” said Ikeura.

Three-pronged innovation engineTo boost academia-industry relations and aca-demic entrepreneurship, the University of Tokyo has put in place a system that brings together the Division of University Corporate Relations (DUCR), the Todai Technology Licensing Organization (TLO), and UTEC.

DUCR, established in 2004, supports the building of strategic alliances with industries and/or local governments, manages the uni-versity’s intellectual property (IP) and fosters entrepreneurship at the university through consultation, incubation and education for researchers and students. According to Toshiya Watanabe, DUCR’s director general, “Based on the University of Tokyo’s robust industry and gov-ernment relationships, the university will further leverage strategic alliances to boost entrepre-neurship and strengthen IP management in order to contribute to the improvement of society. We hope that the University of Tokyo will function as a key innovation ecosystem for society.”

The strategic alliance–building and entrepre-neurship initiatives are conducted in coopera-tion with Todai TLO and UTEC, both of which are private entities associated with the University of Tokyo.

Todai TLO, a subsidiary of the university that was established in 1998, manages marketing and out-licensing of the university’s technologies in all fields. Technology licensing contributes to industry collaborations and the establishment of university-driven startup companies. In the past 10 years, Todai TLO has entered into more than 3,500 licensing agreements. Takafumi Yamamoto, president and CEO of Todai TLO, said, “Our role is to act as an agent for the university’s researchers’ high-value IP. We offer a one-stop service for interested parties to access IP belong-ing to the University of Tokyo.”

UTEC, a venture capital arm of the University of Tokyo, invests in startup companies spinning out of the university and supports business incubation of emerging technologies from the university. Since its establishment in 2004, UTEC has invested in 60 academia startup companies through three sequential funds total-ing approximately $250 million; nearly 30% of those companies are in the life science field. To date this investment activity has resulted in nine initial public offerings and eight merger-and-acquisition exits.

“We will continue to support unique tech start-ups globally through close cooperation with the University of Tokyo and other top research insti-tutes,” said Tomotaka Goji, president of UTEC.

DUCR, Todai TLO and UTEC support innovation not only in biotechnology but also in other tech-nology areas.

Found in translationThe University of Tokyo TRI is an interdisciplinary organization set up to facilitate drug development in an academic setting. Its overarching mission—to translate basic research at the university into practical healthcare applications—is achieved through the gathering and mapping of informa-tion about seed funding for drug discovery and medical device development, with the organiza-tion acting as a bridge between public and private companies and providing consulting services to develop strategies specific to relevant research projects. A scientific steering committee consist-ing of university faculty with pharmaceutical-com-pany experience, R&D and business development representatives from pharmaceutical companies, medical doctors, a patent attorney, representa-tives from regulatory science and a legal adviser helps TRI identify promising projects in the trans-lational space at the University of Tokyo.

TRI, the COIs, DUCR, Todai TLO and UTEC pro-vide the university with a unique edge, helping it to further innovation in Japan and globally.

Masuhiro Kato, former president, CEO and chairman of AstraZeneca, Japan, and currently a project professor at TRI, said, “We have devel-oped a very efficient translational research system to support companies that seek new sources of development and principal investiga-tors that need strategic and practical advice to guide their translational program. The University of Tokyo possesses a wealth of outstand-ing research achievements, yet many remain rough diamonds. It is critical that through our translational research system these diamonds are turned into therapies and medical devices, including in areas such as regenerative therapy. It is our hope that you will consider University of Tokyo’s translational research system to work together on turning academic innovations into clinical applications.”

Reference

1. Department of Economic and Social Affairs, Population

Division, United Nations. World Population Ageing 2013

(UN, New York). http://www.un.org/en/development/

desa/popu la t i on/pub l i c a t i ons/p d f/age in g /

WorldPopulationAgeing2013.pdf (2013).

Figure 1: The University of Tokyo’s Self-Managing Healthy Society COI provides a forum for stakeholders from academia, industry and government to discuss cutting-edge science and technology and ways to improve quality of life in ‘super-aging’ societies.

CONTACT DETAILSHideaki Tojo, Project Senior SpecialistThe University of TokyoTokyo, JapanTel: + 81 3 5841 1383Email: tojo.hideaki@mail.u-tokyo.ac.jp

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Genomics technologies march into new marketsNext-generation sequencing platforms are building market share not only in the research setting but also increasingly in population research and clinical applications.

MELANIE BRAZIL

The first human genome cost $3 billion and took 13 years to sequence; today such an undertaking costs closer to $1,000

and takes only days, making large-scale genetic analysis feasible and affordable. Short- and long-read sequencers have become established workhorses in biomedical research, and their use is now expanding into clinical applications and beyond. Most notably, the combination of high-throughput genotyping with measurements of other markers of health and disease is o pening up the area of precision medicine (PM).

Current research market Over the past couple of years, Illumina, a global specialist in genetic analysis technologies, has introduced a broad portfolio of sequencers “that has allowed the company to expand its leader-ship position, build barriers to entry and accel-erate the penetration of clinical markets,” said Cantor Fitzgerald’s Bryan Brokmeier, senior VP of equity research. “The company now has an esti-mated 80% share of the ~$2.3 billion sequencing market, which we expect to grow into the tens of billions of dollars over the next decade.” The company has seen record growth in the past couple of years, fueled by sales of sequencing machines, as well as companion reagent kits for the hardware.

Thermo Fisher Scientific has the next largest slice of the sequencing market share. It offers two platforms; SOLid and Ion Torrent. Instead of nucleotides, the SOLid system uses fluores-cently labeled probes that are repeatedly ligated to the lengthening strand, optically imaged and then cleaved off. The Ion Torrent platform uses unlabeled nucleotides on a semi-conductor chip, which senses the release of hydrogen ions when bases attach. Neither technology has seriously threatened Illumina’s dominance in the market; in fact, market share for these two platforms shrunk from 2013 to 2014 according to Genome Web.

The other major instrument providers include Pacific Biosciences, Complete Genomics and Oxford Nanopore Technologies. Pacific’s single-molecule real-time sequencing technology reports read lengths of more than 10,000 base pairs. The long reads enable full characterization of the complexity of intergenic DNA sequences. In October 2015, Complete Genomics will launch its first commercial product, the Revolocity system, which is based on a two-adaptor, 300-base-pair insert and mate-pair sequencing of 28 bases in DNA nanoballs. It offers end-to-end sample preparation (genomic DNA, blood or saliva), sequencing, analysis, automation and workflow integration. In March 2013, Complete merged with BGI-Shenzhen, after BGI purchased Complete’s outstanding shares for $3.15 per share. Complete continues to operate as a s eparate wholly owned subsidiary.

Oxford Nanopore’s MinION, a device the size of a USB stick, uses protein nanopores to sequence single-stranded DNA, using changes in electrical current to identify bases. In 2014, the technology became commercially available, and in July 2015, the company raised $109 million in new funding. Elsewhere, Roche, after scrapping a partnership with IBM in nanopore sequencing, got back in the area, acquiring nanopore developer Genia Technologies in a deal worth up to $350 million including milestones and investing in another startup, Stratos Genomics, which labels each of the four bases with unique reporters that are 50-fold larger, thereby generating robust signals in a nanopore-based detection system.

In the past year, these long-read technologies have also been joined on the market by instru-ments that convert short reads into synthetic long reads. One example of this is Illumina’s Moleculo; more recent examples are developed by 10X Genomics and Dovetail Genomics.

Population sequencingAlthough next-generation sequencing (NGS) platforms have become an established tool in the research arena, a highly anticipated area of growth in the research market is the large-scale genotyping of populations. In 2012, UK Prime Minister David Cameron announced a project

to sequence the genomes of up to 100,000 people and use their genomic information in treat-ment and studies of cancer and rare diseases. The project, to be run by Genomics England, a company established by the UK Department of Health in July 2013, has contracted with Illumina to provide the instruments and infrastructure for sequencing and data analysis pipelines (this sum-mer the company opened SeqLab, a service to help labs new to population-based sequencing).

In June 2015, four companies were selected to work on interpreting genomic data from the first 8,000 patients participating in the project: WuXi NextCODE for interpreting variants found in individuals with both cancer and rare dis-eases, Congenica and Omicia for rare-disease interpretation, and NantHealth for oncology. The study will last 3 years; if it is successful, Illumina anticipates that it will lead to an expansion of the effort to sequence a greater proportion of the UK population.

In the United States, the White House announced the Precision Medicine Initiative at the end of January 2015. This initiative is some-what similar to the Genomics England project, but it plans to study the whole genomes of 1 million individuals in order to improve health outcomes. Several sequencing companies are seeing oppor-tunities for growth as other governments begin to

PRECISION MEDICINE TOOLBOXNext-generation sequencing platforms can answer questions related not only to the exome or genome but also to the transcriptome and epigenome of any organism. Sequencing methods differ in terms of how samples are obtained and the data analysis involved.

Whole-genome sequencing (WGS) WGS detects the 3.2 billion bases of the human genome. The ability to sequence large cohorts is now a reality, and WGS will enable deeper understanding of the regulatory and other features in the human genome, as well as meaningful interpretations of whole genomes. WGS is also important for agriculture and microbial genomes.

De novo sequencing This method refers to sequencing of a novel genome for which there is no available reference sequence for alignment. The quality of the data depends on the size and continuity of the gaps in the data.

Whole-exome sequencing (WES) WES captures only the protein-coding part of the genome. Representing less than 2% of the human genome, WES is a cost-effective alternative to WGS. It is used for many applications, including investigating genetic disease, population genetics and cancer studies.

Transcriptome sequencing This method creates a biological snapshot of expressed genes by capturing RNA and converting it to cDNA before sequencing. RNA sequencing can focus on mRNA, small RNA, noncoding RNA or microRNA, depending on the steps included before cDNA synthesis.

Epigenome sequencing Epigenome sequencing investigates heritable changes in gene activity caused by environmental factors, such as DNA methylation and acetylation, DNA–protein or RNA–protein interactions, small RNA-mediated regulation and histone modifications.

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head of Roche’s sequencing and tissue diag-nostics units. He added that the company has “diagnostics specialists involved in every project in our drug discovery portfolio, searching for the biomarkers needed for a personalized health care approach.” In 2013, Pacific partnered with Roche to develop, commercialize and license diagnostic products for clinical use based on Pacific’s tech-nology in a deal worth up to $75 million in up-front and milestone payments. In 2015, in addition to a majority share in Foundation Medicine costing $1 billion plus milestones, Roche bought Signature Diagnostics, with the aim of using its blood plasma and tissue oncology biobanks to develop circulating cell-free DNA tests.

At the end of 2014, Roche acquired Ariosa Diagnostics and its prenatal-testing portfolio. The previous year Illumina had begun noninvasive prenatal screening with its acquisition of prenatal test maker Verinata. It also launched its VeriSeq sequencing technology for pre-implantation embryo screening. Many of the sequencing com-panies anticipate growth in this market as their platforms are expanded to average-risk women, a market six times larger than the current high-risk genetic defect market.

Growth has been relatively slow in the diag-nostic space because businesses face some serious headwinds in today’s legal, regulatory and reimbursement environments. Diagnostics has always been a low-margin business, and resource-constrained payers are accustomed to treating them like cheap commodities. What’s more, many companies must provide clinical data showing that a new diagnostics test contributes to better clinical outcomes before reimbursement is offered. All of this is in addition to an uncertain regulatory future, even though the FDA recently unveiled its controversial laboratory-developed test guidance. As a result, companies such as Foundation Health have built a substantial clien-tele in the pharma industry to hedge against the difficulties of obtaining reimbursement and approval for their tests.

Companion diagnostics and PMPharma companies are increasingly interested in using sequencing in drug development, primarily for oncology, although other indications are gain-ing interest. Initially, pharma companies used sequencing primarily for discovery, and mostly outsourced the sequencing to contract research organizations. As time has passed, instrument providers, such as Illumina, and diagnostic com-panies using sequencing, such as Foundation Health, have increasingly pivoted their busi-nesses to provide services to big pharma, par-ticularly around companion diagnostics, which is moving toward sequencing.

According to the Tufts Center for the Study of Drug Development, 73% of cancer compounds are now studied in the context of biomarker data, and 42% of compounds across all indications employ biomarkers. What’s more, investment in personalized medicine is projected to increase by 33% in the next 5 years.

In 2014, Thermo Fisher announced a partner-ship with Nuclea Biotechnologies to accelerate methods to quantify type 2 diabetes markers.

adapt population-sequencing projects like those of the United Kingdom and the United States.

The interest in carrying out these population-based studies has grown from clinical research projects that have integrated sequencing into trial design. For example, a multi-institutional amyotrophic lateral sclerosis (ALS) sequencing project at the New York Genome Center, funded by the ALS Association and the Tow Foundation, aims to integrate WGS data with other genome-scale data, such as RNA sequencing data, to understand the relationships among mutations, gene expression and mechanisms of disease. In August 2015, Biogen, the ALS Association and Columbia University Medical Center announced a new collaboration aimed at better understand-ing how genes influence the clinical features of ALS. This project, which currently includes 1,500 people with ALS, is the first to combine NGS and detailed clinical phenotyping with the hopes of ultimately enabling a PM approach for ALS. According to David Goldstein, director of Columbia University’s Institute of Genomic Medicine, “It is likely that the most important contribution of PM is not so much matching patients with the right treatments, but rather using the technologies of PM to create entirely new avenues into understanding the basic biol-ogy of disease and using that knowledge to c reate entirely new points of intervention.”

Another project is the Alzheimer’s Disease Neuroimaging Initiative, which since 2004 has been validating the use of biomarkers and MRI/PET for clinical trials and diagnosis in individu-als with Alzheimer’s disease (AD). The initiative involves an unprecedented policy for sharing pre-competitive data access to increase the rate of discovery. Plans to add whole-genome sequencing (WGS) for 800 participants with AD will result in the most comprehensive way of looking at AD yet.

These are just a sample of the type of human research studies under way. They not only prom-ise a continued growth in demand for sequencing platforms but also have provided the groundwork for what is perhaps the impetus for crossing the rubicon to clinical practice.

Moving into diagnosticsCompanies are going after the clinical sequenc-ing market on two different fronts. First, they are moving their instruments through US Food and Drug Administration (FDA) clearance. In 2013, the FDA cleared Illumina’s MiSeqDx system; this helped spur record demand for the MiSeq, including for both cleared and research-use-only versions. Illumina and other sequencing compa-nies have plans to obtain 510(k) clearance for assays for sequencing platforms, primarily in oncology practices.

Second, sequencing-based diagnostics are also being developed. The two early growth mar-kets are oncology (including cell-free DNA tests) and noninvasive prenatal testing. Large pharma company Roche is directly investing in the NGS and diagnostics areas. “With capabilities in both diagnostics and pharmaceuticals, Roche uses a personalized approach to diagnose and treat vari-ous cancers. Our diagnostic tools are also used to help manage treatment,” said Dan Zabrowski,

The company has also entered into an agreement with GlaxoSmithKline and Pfizer to develop a uni-versal NGS oncology test for solid tumors that will serve as a companion diagnostic for multiple drug programs. A similar program in oncology was announced in the same year by Illumina, partnering with AstraZeneca, Janssen Biotech and Sanofi.

Companies such as Stephen Fodor’s Cellular Research are also using NGS and barcoding to provide a sensitive single-cell genomics platform that provides information on cellular hetero-geneity. Cellular Research published the results of their work with this type of platform earlier in 2015; the company already has one confidential large pharma interaction.

Challenges for the future The real ambition of PM, said Goldstein, “is in transforming the way we develop new medicines.” He also believes that “other technological drivers will be in genome editing and stem cell biology, since they together create a clear pathway for in vitro models of many human diseases.”

Many current challenges exist to further com-mercial development of sequencing platforms, including ensuring cohorts represent our nat-ural diversity, managing large consortia, ques-tions facing drug regulatory agencies, grappling with new technologies, shifts in intellectual property protection, as well as physician and patient education.

Genomics is helpful for determining predisposi-tions and, in some cases, the utility of certain drugs, but for the vast majority of clinical cases and patients, it will be measurements of real-time health status that will become central for determining individualized treatment. Sam Sia of Columbia’s Biomedical Engineering Department and cofounder of biotech i ncubator Harlem Biospace observed, “Technologies for monitor-ing individuals’ health are becoming increasingly available, especially with consumer electronic devices moving into health measurements. The devices currently measure mostly vital signs, but it is inevitable they will move into blood tests and portable imaging in the future.” Consumer diagnostics provider Theranos has a commer-cially available platform for cheaper lab tests that can detect up to 30 conditions using only drops of blood. The tests are offered through retail p harmacies and are covered by a number of payors.

What is clear is that NGS is already establishing itself in clinical markets such as oncology and reproductive health, in population research and in companion diagnostics. But there are a whole raft of underexploited opportunities yet to be tackled, not only in understanding the role of genetic variation in areas of human disease out-side of cancer and childbirth, but also in animal health, crop genotyping and breeding, infectious-disease detection (including food and water test-ing) and forensics, all of which suggest buoyant commercial prospects for these technologies.

Melanie Brazil is the Chief of Staff, Precision Medicine Initiative, at Columbia University, New York, New York, USA

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NuGEN Technologieswww.nugen.com

Accelerating genomics with advanced sample preparation solutionsNuGEN Technologies provides scientists and clinicians with innovative and reliable sample-preparation technologies for targeted genomic analysis and diagnostics.

W ith the advent of fast, high-capacity genomic-sequencing technologies, scientists are gaining new insights

into the fundamental mechanisms of disease, enabling doctors to analyze a patient’s genetic makeup for improved diagnosis and personalized treatment. But while next-generation sequencing (NGS) platforms are having a major impact on clinical research and diagnostic testing, use-ful insights can only be gained if samples are prepared for analysis in a reliable, unbiased and reproducible manner.

NuGEN Technologies offers more than 100 sample-preparation products that allow labora-tories and clinics around the world to efficiently target and obtain useful sequencing data from a broad range of samples, including those that are limited in quantity, degraded or otherwise chal-lenging to process.

In oncology, an understanding of the molecular changes that drive an individual tumor can lead to clearer diagnosis, treatment and even monitoring for recurrence. Yet at each step in patient care, tissue availability may be very limited. NuGEN’s SPIA (single-primer isothermal amplification) technology solves this problem by using high-efficiency amplification to enable expression analysis of very low-level nucleic acid samples on both microarray and NGS platforms. With SPIA, efficient sample processing from fine needle aspirate (FNA) samples is possible, in some cases eliminating the need for more invasive biopsy procedures. SPIA also enables the analysis of other limited and/or compromised biological samples, including laser-captured microdissections, sorted cells, embryonic structures and formalin-fixed paraffin-embedded (FFPE) samples. SPIA is the core technology used in the Ovation Pico WTA System for microarrays and the Ovation RNA-Seq System V2 for NGS.

Blood samples, a potentially useful source of gene-expression data in clinical trials, pose a challenge because of the prevalence of hemoglobin RNA. Insert Dependent Adaptor Cleavage (InDA-C) is a NuGEN technology that uses a targeted approach to deplete unwanted high-abundance transcripts during sequenc-ing library construction. InDA-C substantially reduces the number of sequencing reads that are derived from the high-abundance RNA while leaving the original RNA population unperturbed, thereby reducing the potential for the introduction of bias into the results. This technology also ensures more efficient use of sequencing resources by effectively depleting

ribosomal RNA reads when total RNA input is used to prepare sequencing libraries. InDA-C is the core technology used in the Ovation Human Blood RNA-Seq System.

SPET (single-primer enrichment technology) another innovative NuGEN technology, maximizes the information yield from NGS with a rapid and efficient sample-preparation workflow. SPET is a target-enrichment tool that allows for the simultaneous detection of single-nucleotide polymorphisms (SNPs), copy-numbers variants (CNVs) and insertions or deletions. Until recently, CNV and sequence analysis have required completely different analytical platforms and sample preparation to elucidate information for these three types of genetic variation. SPET does so in a single assay, conserving patient samples and making more efficient use of sequencing resources. SPET is the core technology used in the Ovation Cancer Panel 2.0 Target Enrichment System.

SPET can also be used to identify gene-fusion events and sequence variants in an RNA sample. The SPET technology for targeted RNA sequencing is flexible enough to target any gene in any organism for gene-fusion detection and gene-expression analysis. This will be an important contribution to RNA-seq–based cancer diagnostic and prognostic tests.

Real-world applicationsReproducible results from whole bloodPreAnalytiX and RUCDR Infinite Biologics part-nered with NuGEN to develop and validate an end-to-end workflow for the reproducible collec-tion and processing of whole blood for RNA-seq

in clinical studies. The study team found highly reproducible results across sites, operators and equipment. “We have determined that the PreAnalytiX-NuGEN integrated workflow ensures reproducible, accurate and sensitive results in RNA-seq of whole blood,” said Andrew Brooks, COO of RUCDR Infinite Biologics, who led the study. “Importantly, this integrated workflow enables gene expression from total RNA, allow-ing researchers to study both protein coding and regulatory transcripts from human whole blood.”

Veracyte uses NuGEN’s RNA-amplification and labeling technology in its microarray-based Afirma Thyroid FNA Analysis assay for the strati-fication of indeterminate thyroid tumors. The test greatly reduces unnecessary surgical interven-tion in patients and is reimbursed by Medicare and numerous other health insurers.

Sample prep for clinical cancer diagnosticsNuGEN is working with leading molecular-diagnostics companies to develop and commercialize genomic diagnostic and prognostic tests. The enabling characteristics of NuGEN’s sample-preparation technologies translate well to clinical settings, in which samples are often limited and whole blood and FFPE samples are widely used. To facilitate the translation of diagnostic research into the clinic, NuGEN has established rigorous quality standards, including ISO 13485:2003 certification and California State current good manufacturing process (cGMP) licensure, making it one of the first reagent companies to meet these exacting qualifications.

NuGEN is a pioneer in developing innovative sample-preparation solutions for targeted genomic analysis. From the early days of microarray technology to present-day NGS, NuGEN has been a leader in the development and manufacture of innovative technologies that help bring the benefits of the genomic revolution to all.

CONTACT DETAILSAlan Dance, VP MarketingNuGEN TechnologiesSan Carlos, CA, USATel: +1-650-590-3671Email: adance@nugen.com

Microscopic image of a circulating tumor cell.

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DNAnexus, Inc.www.dnanexus.com

Accelerating Precision MedicineUtilizing cloud-based genome informatics to inform next-generation sequencing diagnosis and treatment.

I n a dozen years, sequencing of the human genome has been transformed from a herculean task to one requiring as little as

a day and a thousand dollars. This dramatic improvement in sequencing technology promises important benefits to human health, but realizing this potential in everyday practice requires over-coming new challenges. DNAnexus, the global leader in cloud-based genome informatics and data management, offers a universal solution to the informatics challenges posed by next-gener-ation sequencing (NGS), providing the backbone technology needed to apply NGS to the diagnosis and treatment of disease (Box 1).

“Medical progress is driven by inquisitive and impassioned clinicians, researchers and data scientists determined to make a difference,” said DNAnexus chief medical officer David Shaywitz. “Our goal is to support and empower these champions.” The DNAnexus Platform speeds the delivery of clinical innovation to patients with a turnkey computational and data manage-ment solution that is efficient, customizable and compliant with clinical regulatory demands, yet flexible enough to integrate other NGS technolo-gies into a customer specific pipeline. DNAnexus serves a broad range of global partners, from prenatal testing companies to the US Food and Drug Administration (FDA).

NGS challengesDelivering on the promise of NGS will require overcoming critical challenges, including the quantity of data involved, the need for compre-hensive regulatory compliance, stringent controls on patient data privacy and security, the need for collaboration across institutional firewalls, and integration with upstream and downstream systems, including sequencing platforms. “Our clinical customers need data management to be HIPAA [Health Insurance Portability and Accountability Act] compliant and secure at all steps in the process. This becomes even more important at scale, when petabytes of data are involved,” explained Richard Daly, chief executive officer at DNAnexus.

Extending global reachDNAnexus has partnered with Natera, a leader in noninvasive genetic testing, to support data analysis, storage and sharing. Using the DNAnexus Platform, Natera’s remote global partner laborato-ries can upload sequencing data to a single secure, CE-certified environment. This has allowed Natera to rapidly expand into new markets by minimizing IT friction points. According to Daly, “The DNAnexus Platform serves as a compliant command center supporting multiple testing sites and enabling pro-viders such as Natera with the technical platform to market and monetize their tests globally.”

In addition to geographic expansion, the Platform is also designed to easily accommo-date new product development and deploy-ment. “DNAnexus has made it easy for us to take advantage of cloud genomics by removing the costs and technical headaches associated with building a do-it-yourself alternative,” said Jonathan Sheena, cofounder and chief tech-nology officer of Natera.

Advancing cancer careWhen Intermountain Precision Genomics, an in-house laboratory for Intermountain Healthcare, was searching for a bioinformatics solution, the ability to share research data and rapidly scale the effort across their 22 hospitals and medical group was a key criterion. Intermountain and DNAnexus worked together to develop a cloud-based bioinformatics pipeline to translate raw sequence data into interpretable variants. “We selected DNAnexus because of the company’s leading bioinformatics and cloud computing expertise, combined with the best-in-class security and compliance standards of the Platform,” said Lincoln Nadauld, medical direc-tor of Intermountain Precision Genomics. With these data, Intermountain’s oncologists can identify tumor-specific mutations and determine

the best treatment option for each patient. “The underlying infrastructure that DNAnexus provides allows us to focus on our core compe-tencies of R&D and patient care while revolution-izing cancer treatment.”

Leading open-source NGS R&DAs a leader in the field, DNAnexus was awarded a contract to create precisionFDA, an open-source platform for sharing of genomic-testing information. As part of the White House’s Precision Medicine Initiative, the FDA is tasked with developing a streamlined approach to evaluating diagnostics that rely on NGS technol-ogy, and precisionFDA is a critical part of that effort. DNAnexus anticipates that precisionFDA will be used by test developers, standard-making bodies, biopharmaceutical companies, health care providers, academic medical centers and patient advocacy groups.

For diagnostic developers, the precisionFDA Platform offers a venue for comparing new tests to approved ones and sharing results with col-laborators and the FDA. As participants grow and more NGS data become available, this grass-roots effort is expected to generate reference data sets and ultimately help to define industry standards. “DNAnexus is proud to be creating a community around open-source genomic-analysis pipelines, reference data and analytical processing resources,” said Daly. “The Platform will enable the managing and sharing of genomic data at an unprecedented level.”

BOX 1: THE DNANEXUS SOLUTIONCloud-based › The DNAnexus approach allows rapid upload to a secure cloud of data � les of all types, or of entire pipelines. It facilitates the creation and validation of custom work� ows using either a command line or a web interface. It offers an elastic capacity to meet evolving needs, without the need for capital investment in hardware or ongoing infrastructure management.

Fast track to compliance › DNAnexus has met HIPAA, Clinical Laboratory Improvement Amendments (CLIA), good clinical practice (GCP) and EU regulatory standards, offering partners a quick, cost-ef� cient path to compliant handling of NGS data at all points in the work� ow, from raw data to � nal reporting, including incorporation into electronic medical records.

Private and secure › The privacy and security of patient data are paramount for clinical applications. DNAnexus is independently audited and certi� ed as compliant to ISO 27001, the internationally recognized standard for information-security management systems. Data is encrypted at rest and in transit on DNAnexus.

Flexible › The DNAnexus application programming interface integrates seamlessly with other NGS upstream and downstream system components, including lab information management systems (LIMS) and reporting software. The platform supports global access to data, facilitating consistent work� ows and ensuring uniform analytical treatment and reproducibility of results across sites.

CONTACT DETAILSTim O’Brien, Vice President, SalesDNAnexus, Inc.Mountain View, CA, USAEmail: sales@dnanexus.com

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InvivoSciences Inc.www.invivosciences.com

Predicting cardiotoxicity with engineered 3D human cardiac tissue modelsInvivoSciences harnesses human induced pluripotent stem cells to generate patient-specific disease models for drug and diagnostics development.

C ardiovascular safety liabilities caused 52.3 % of 44 marketed drug withdrawals according to

data from 1980 to 2011, and cardio-vascular disease remains the leading cause of death globally, yet only 8.7 % of cardiovascular drugs successfully pass clinical trials. These statistics demonstrate the need to address a patient’s specific genetic make-up and phenotype by adopting a personalized treatment methodology for cardiovas-cular diseases.

Established in 2001 in St Louis, Missouri, InvivoSciences Inc. (IVS) pro-vides innovative solutions to address the unmet technological needs in drug discovery and development for cardiovascular diseases and to predict adverse cardiotoxicity effects at the preclinical stage. Today operating in Madison, Wisconsin, the founders work with scientific advis-ers and collaborate with leading academic and government institutions.

Drug discovery platformIVS has become a leading developer of human 3D cell and tissue culture models by providing a high-throughput, functional system for testing cardio safety and efficacy to screen and identify compounds or pathways that may alter cardiac physiology and pathology. The high-content analy-sis of human engineered tissues is instrumental in drug discovery at their screening and lead opti-mization stage. The IVS proprietary technology allows the growth of engineered tissues in 3D to mimic healthy and disease-naive human tissues, which enables the gap to be bridged between cell-based assays and studies using isolated organs, tissues or animal models. The engineered tissue, developed without a synthetic supporting layer, allows physiological measurements (e.g., con-traction) and analysis. IVS technology improves clinical approval success rates by predicting patients’ responses to drug candidates which is achieved by using the tissue-based discovery platform to predict patient-specific responses to treatments in engineered human tissues derived from patient-specific samples.

Abnormalities in muscle function are observed in many inherited or acquired diseases, such as muscular dystrophy, chronic obstructive pul-monary disease, and congestive heart failure. The Palpator is a high-throughput mechanical tissue analyzer that measures the mechani-cal properties of engineered tissues growing in

96- or 384-well plates and allows chemical library screening. IVS has carried out proof-of-concept studies to analyze the molecular mechanisms of action of different compounds on the contractile activities of different muscle cell types.

IVS provides services to develop heart failure models driven by genetic mutations. Current projects include phenotyping of patent-specific engineered heart tissues (EHTs) for Duchenne muscular dystrophy and congenital heart disease.

Precision medicine focusHuman induced pluripotent stem cell (iPSC) technology is critical within precision medicine because it generates a disease model in a dish. The iPSC’s capacity to yield large numbers of pluripotent cells able to differentiate into almost any somatic cell type is attractive. However, performing this feat industrially is daunting as well-defined, uniform and reproducible patient derived iPSCs are essential for cells to differenti-ate into somatic cells and to develop tissues and organs for faithful disease modeling. Automation of iPSC culture can normalize and standardize cell proliferation, enabling researchers to handle large numbers of human cell lines. Moreover, the personalized 3D human cardiac tissue models empower researchers to conduct drug safety and efficacy analysis using enriched study population at preclinical stages.

IVS has developed an in vitro disease model that recapitulates an individual patient’s cardio-myopathy in 3D EHTs using patient-derived cells. Automated cell culture and cardiomyocyte-differ-entiation protocols demonstrate both improved productivity and reproducibility for generating

patient-specific disease models for drug and diagnostics development (see figure).

Products and servicesIVS’s products and services will reduce the cost and use of animal studies. The company’s assay platforms assess the therapeutic efficacy of pharmaceutical candidates by analyzing key physiologi-cal functions of engineered tissues in vivo. The Palpator is used for analyz-ing the structural and mechanical integ-rity of heart heart muscle equivalent. The live-in-tissue analysis (LITA), a high-content phenotypic analyzer, quantifies treatment-induced changes in a tissue construct’s physiological function and the biomolecular activities that under-lie those changes. IVS offers services

using the LITA for testing the efficacy and safety of drug candidates. The LITA will soon be available for in-house operations at customers’ sites and is also available in other applications including regenerative medicine, cancer, autoimmune dis-orders and many rare diseases. IVS also provides a device, ACTRO that automates cell and tissue culture of iPSCs and can handle an increasing number of patient-specific iPSC lines.

Future perspectivesUS National Institutes of Health (NIH) Small Business Innovation Research (SBIR) grants have supported IVS’s drug discovery applications of its innovative technologies, allowing the company to build a strong foundation. The strategic collabora-tions with key industry and academic partners have helped IVS to create a unique product/assay and service portfolio that provides solutions to unmet needs in drug discovery and patient popu-lations with debilitating cardiac diseases. IVS has developed global commercial growth plans by boosting its scaled-up and fully automated manufacturing of human engineered tissues and their personalized derivatives. IVS seeks potential private funding partners to share the business opportunity. IVS also wants to expand its strate-gic partnerships with pharmaceutical and biotech companies.

CONTACT DETAILSAyla Annac, CEO/PresidentInvivoSciences Inc.Madison, WI, USATel: +1-608-628-8035Email: aannac@invivosciences.com

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Biocartis NVwww.biocar t is.com

Idylla: high-precision diagnostics for high-precision medicineBiocartis' molecular diagnostics make precision medicine simple.

P ersonalized or precision medicine is a fast-growing area that relies on targeted medicines supported by fast, reliable,

sensitive and cost-effective in vitro diagnostics to ensure that doctors are able to get the right drugs to the right patients on the right timescale while tracking their response to treatment. Belgian company Biocartis NV, founded in 2007, aims to provide next-generation diagnostic solutions for improving clinical practice for the benefit of patients, clinicians, payers and industry. Idylla is Biocartis’ fully automated, real-time PCR-based molecular diagnostics system, designed to offer fast and easy access to clinical molecular diagnostic information virtually anywhere and any time. Idylla was commercially launched in September 2014, and its track record so far has convinced key opinion leaders in pathology, oncol-ogy and infectious disease across the world of its abilities.

Creating fast and accurate molecular diagnosticsMolecular diagnostics is one of the fastest grow-ing segments of the in vitro diagnostics market, predicted to be worth around US$8 billion world-wide by 2018.

Clinical molecular testing currently involves a series of complex, labor-intensive and relatively costly steps, including preparation of clinical samples; isolation of genetic material, such as DNA; amplification, detection and quantifi-cation of the genetic material; result delivery; and—finally—interpretation by the pathologist. Driven by the conviction that easier, more effec-tive and near-patient use can help doctors select a targeted therapy, Biocartis has developed the CE-IVD–marked Idylla diagnostics system. It is a rapid, highly sensitive, automated real-time system that can be used on demand and at point of need. All this in combination with its capability to detect up to 30 molecular targets in standard mode creates new possibilities. The Idylla system consists of a console with a touch-screen connected to an instrument that allows Idylla cartridges to perform specific tests. The cartridge includes all reagents and is designed to handle a wide variety of different clinical sample types, including tissue samples, blood, urine, sputum, swabs and fine needle aspirates. With an average hands-on time of just 2 minutes and a turnaround time of 35–150 minutes, depend-ing on the complexity of the test, Idylla can be considered a fully automated PCR system.

Because of the current complexity of molecular diagnostics (MDx), only a small subset of hos-pitals are able to perform (complex) MDx tests

in-house. For most hospitals, the test volume is too small to justify investment in the infrastruc-ture, equipment and personnel needed to per-form today’s MDx tests. With the Idylla platform, this hurdle can be overcome: there is no need for dedicated pre- and post-amplification rooms, and handling is reduced to a level of such simplicity that no specific skills in MDx are required, as no complex steps or other equipment are involved. In addition, with Idylla samples can be analyzed one by one, whereas most current systems require batches of samples for analysis. These features could bring MDx within the reach of smaller hospitals, so that they would no longer have to send samples to centralized labs and could thus save time in the diagnostics process, which is a crucial advantage. For larger labs, Idylla offers the ability to run samples between batches, decreasing labor costs related to the execution of tests, reducing user-induced vari-ability between tests and offering a much faster turnaround time. Idylla does this without sacri-ficing quality. Idylla truly creates new opportuni-ties for hospitals and laboratories.

Today Biocartis is rapidly expanding its test menu to address key unmet clinical needs in oncology and infectious diseases. Biocartis recently made significant progress in the field of liquid biopsies. In June 2015, Biocartis pre-sented positive results of a research study, conducted in collaboration with Bart Neyns from the University Hospital Brussels, at the annual meeting of the American Society for Clinical Oncology, demonstrating that levels of BRAF-mutant tumor DNA in the circulating blood of

metastatic melanoma patients were associated with disease progression. This opens up the pos-sibility of making patient monitoring easier and less invasive.

Biocartis’ vision: growing into the futureCurrently employing over 200 people, Biocartis has plans for growth. Over the next few years, the company aims to ramp up its release of MDx tests to four or five a year, through a combina-tion of in-house development and collaboration. Biocartis’ direct sales team currently covers 16 European countries, and this reach will expand worldwide as the company launches more prod-ucts and Idylla gains regulatory approval in the United States, Japan and China.

Hilde Windels (deputy CEO), Erik Vossenaar (VP of business development) and Rudi Pauwels (founder and CEO) are aware of the advantages of good collaborations and strategic partnerships. “Small and larger partners have contributed to the success of Idylla, and the Idylla platform has enabled partners to bring their innovation to a new level. Biocartis is looking forward to partnering with teams with the same drive and mind-set, creating new opportunities in the fields of MDx and high-precision medicine,” explained Vossenaar.

CONTACT DETAILSErik Vossenaar, VP, Business DevelopmentBiocartis NVMechelen, BelgiumTel: +32 (0)15 632 600Email: evossenaar@biocartis.com

The Biocartis team: Hilde Windels (left) and Erik Vossenaar (right).

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Pacific Edge Ltd.www.pacif icedgedx.com

Groundbreaking, noninvasive tests for bladder cancerPacific Edge has expanded the international market for two new molecular tests that provide better detection and management of urothelial cancer.

Two groundbreaking, noninvasive diagnostic tests for bladder cancer are the first of four such new products to be successfully

launched by Pacific Edge, a company that spe-cializes in the discovery and commercialization of diagnostic technology for early detection and monitoring of cancer.

Founded in New Zealand in 2001, Pacific Edge identifies unique gene signatures and develops them for its new class of cancer management tools. It utilizes state-of-the-art molecular biology, gene expression analysis and signature develop-ment; proprietary biobanks for validation; clinical data; and proprietary analytical software.

At the heart of the company’s products is its urine sample–collection system. Only a small volume of a patient’s urine is required, and is safely protected for international transport, enabling Pacific Edge to utilize its custom world-wide laboratories.

Cxbladder Triage, which accurately identi-fies patients with a low probability of bladder cancer, and Cxbladder Detect, which identifies bladder and other urinary tract cancers, are both achieving rapid sales growth in the United States, Australia and New Zealand; the tests are undergoing evaluation by urologists in Southeast Asia. Pacific Edge is positioning itself as a global leader in cancer molecular diagnostics and a one-stop shop for urologists.

Cost effective, accurate and precise“There have been no new therapies for bladder cancer for 30 years and no new commercially sig-nificant diagnostic tests for bladder cancer in 15 years,” said David Darling, CEO of Pacific Edge.

“Our tests are noninvasive, cost effective and accurate, and they provide urologists with valuable new perspectives for clinical decision making. This, combined with our urine sample system, provides patients and clinicians with a straightforward, noninvasive test that enhances the patient experience and leads to better compli-ance and patient outcomes.”

Cxbladder Triage combines the power of genomic biomarkers with extra phenotypic and clinical risk factors to accurately identify patients with hematuria (blood in their urine) who have a low probability of bladder cancer. It can reduce the number of patients needing costly, invasive work-ups for urothelial cancer, and is an essential tool for urologists dealing with the many patients who have hematuria but are unlikely to have uro-thelial cancer.

Cxbladder Detect measures the expression of five biomarker genes that represent a bladder

cancer signature. It is a quick, cost-effective and accurate adjunct to cystoscopy and can replace other urine-based tests or, in some instances, remove the need for some of these invasive tests.

Both products have been tested and vali-dated in international, multicenter clinical stud-ies1,2,4. In the latest study, published in May 2015, BMC Medical Research Methodology ranked four noninvasive bladder cancer diagnos-tic tests on the basis of a study of 939 patients across five data sets3.

Researchers compared the tests on three measures of accuracy: sensitivity, signal-to-noise ratio and cross-validation error rate. Overall, Cxbladder Detect outperformed the other three tests (Table 1), including UroVysion FISH, which is covered by all major insurance companies in the United States.

Research on Cxbladder Triage was published in BMC Urology in April 2015 and showed that 80 % of patients with microhematuria who did not have urothelial cancer were correctly triaged out and could bypass a full work-up for urological cancer4.

Two new products to launch in 2015 and 2016Pacific Edge will launch two more products in its Cxbladder suite in 2015 and 2016: Cxbladder Monitor and Cxbladder Predict.

Worldwide, bladder cancer is the sixth most prevalent form of cancer (8 % for males and 2 % for females), with a high recurrence rate. It car-ries the highest medical cost per patient of all cancers (US$240,000 from diagnosis to death).

“Pacific Edge’s products also address the issue of a much larger patient population with hematuria. Many more are worked up for blad-der cancer than need be, at a high cost. The Cxbladder technology provides solutions that significantly lower those costs and focus treat-ment and management on the people who need it most,” Darling said.

In the United States, where Pacific Edge ana-lyzes urine samples at its Clinical Laboratory Improvement Amendments (CLIA)-certified and College of American Pathologists (CAP)-accredited laboratory in Pennsylvania, the market potential is around 2 million tests each year. Pacific Edge has agreements with the four larg-est National Provider Networks (FedMed, ACPN, Stratose and Multichoice) and is advancing commercial relationships with private insurance companies, integrated healthcare providers, the Veterans Administration and the Centers for Medicare and Medicaid Services.

User Programs, which allow urologists a trial period for Cxbladder, have proven the most effective component of Pacific Edge’s sales strategy. Additional programs are being rolled out internationally, including one with the United States’ largest nonprofit health insurer and pro-vider, Kaiser Permanente, and the first Southeast Asian program with one of Singapore’s biggest hospitals, Tan Tock Seng. The company also plans to launch similar programs in Taiwan and Thailand.

“Southeast Asia has considerable potential for us, particularly because of the increasing number of medical tourists. We use our CLIA-certified laboratory in New Zealand and analyze samples with a very quick turnaround time,” Darling said.

The company has also launched a successful ecommerce site for online ordering of Cxbladder tests by New Zealand residents and healthcare professionals. It will be replicated in other mar-kets where possible.

References

1. Holyoake, A. et al. Clin. Cancer Res. 14, 742–749 (2008).

2. O’Sullivan, P. et al. J. Urol. 188, 741–747 (2012).

3. Breen, V. et al. BMC Med. Res. Methodol. 15, 45 (2015).

4. Kavalieris, L. et al. BMC Urol. 15, 23 (2015).

CONTACT DETAILSDavid Darling, CEOPacific Edge Ltd.Centre for InnovationDunedin, New ZealandTel: +64 (0)3 479 5800Email: david.darling@pelnz.com

Table 1: Sensitivity and specificity of urinary cancer diagnostic tests.

Product Sensitivity (% (95 % CI))

Specificity (% (95 % CI))

Cxbladder Detect 73.6 (65.1–81.7) 81.7 (78.7–84.4)

Cytology 46.0 (36.3–55.8) 95.3 (93.7–96.6)

NMP22 45.9 (35.9–56.3) 88.0 (85.5–90.2)

UroVysion FISH 47.7 (31.5–63.3) 87.7 (84.7–90.3)

CI, confidence interval. Source: Data from Breen, V. et al. BMC Med. Res. Methodol. 15, 45 (2015)

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Precision medicine’s invigorating effect on cancer medical technologyGlobal recognition and advances in precision medicine have led to new approaches in cancer treatments and a consequent increase in dealmaking.

BY NICK TAYLOR

I n 2015, President Obama gave fresh im petus to an already vibrant sector by unveiling the Precision Medicine Initiative.

The project formalized the interest of the world’s largest pharmaceutical market in the concept of precision medicine, setting the stage for increased dealmaking involving the two assets that enable the approach: targeted therapies and medical technologies.

Over time, selecting a therapy on the basis of a patient’s genetics could reshape all areas of medicine, and the huge unmet needs, signifi-cant market opportunities and molecular knowl-edge that characterize cancer R&D and treatment today are the ideal proving ground. This status is reflected in current dealmaking trends, which show that drug developers and medical technol-ogy companies alike are spending time negotiat-ing deals regarding oncology-related diagnostics and devices.

Demand for complex tests spurs dealsThe appetite for technologies that can quickly and affordably identify the genetic causes of cancer has driven the creation of a large, fast-evolving collection of tools. Although the preci-sion medicine movement began with searches for single biomarkers, the industry is now migrating toward hot-spot panels that analyze multiple genes, broader pan-cancer tests and whole-genome sequencing. The most advanced of these technologies have naturally attracted the greatest attention from dealmakers.

Current activities at Roche are indicative of the areas of interest for the sector. In 2015 alone, the company has invested US$1.2 billion in pan-cancer test developer Foundation Medicine, bought circulating cell-free DNA analysis busi-ness Signature Diagnostics and acquired next-generation sequencing reagent player Kapa Biosystems. “We consider biomarkers and

diagnostic tools as key differentiators,” said Jason Coloma, global head of oncology and c ancer immunology at Roche Partnering.

The big medical technology companies have also sought to include their tools in research and clinical settings. Illumina, whose sequenc-ing technology is used by Foundation Medicine and other major companies in the sector, has created the field of population-scale genomics, leading the United Kingdom to probe the DNA of 100,000 people with cancer and rare diseases. Complete Genomics, a unit of Chinese sequenc-ing firm BGI, has since started inking deals for its own large-scale sequencer.

Illumina and Complete Genomics are enabling research groups and clinical diagnostics services to generate data at previously unimaginable rates, but sheer scale is useful only in certain contexts. In other fields, such as the umbrella trials of multiple treatments being pioneered by the US National Cancer Institute (NCI), the ability to use small samples and fast turnaround times are the main priorities. NCI is using Thermo Fisher Scientific’s Ion Torrent next-generation sequencer for its Molecular Analysis for Therapy Choice (MATCH) trial.

“The assay will enable these laboratories to reliably sequence a large range of tumor sample types in a timely manner, including small biopsies and fine-needle aspirates,” said Mike Nolan, vice president and general manager of oncology at Thermo Fisher Scientific. The test will analyze single-nucleotide variants, copy-number vari-ants, insertions and deletions, and gene fusions across 143 genes, moving the sector away from a model with one companion diagnostic per drug and toward one test for all cancers.

Shifting economicsObservers view this transition, which dealmaking over the past year shows is already under way, as a defining trend for the oncology medical technol-ogy field. “We see the market gradually shifting to increasingly complex panel-based tests and away from single-marker tests or small panels,” Tim Evans, senior analyst at Wells Fargo, wrote in a note to investors in December 2014. This trend is being driven by an improved understand-ing of cancer, the proliferation of targeted drugs, and money.

Work by Illumina and others means sequenc-ing is now cheaper than ever, making tests that were once prohibitively expensive an option for researchers and clinicians. Robert Klein, chief business officer at Complete Genomics, cited the trend for sequencing to become “more auto-mated, higher throughput and less expensive” as key to the move away from limited panels. Ongoing attempts by the likes of Complete

Genomics to win shares from Illumina should push prices down further.

When paired with a new understanding of the health economics of single-biomarker and pan-cancer panels, the falling costs of sequencing are tipping the financial balance in favor of broader tests. “Next-generation sequencing compan-ion diagnostics … can be used to expand the potential patient reach of these therapies. This then improves the potential health economics equation of selecting the right therapies and can reduce the cost back to the payers,” Nolan said.

At the same time, what companies look for and how they use the data are continuing to evolve. “There are several technologies in development that can detect certain molecular markers in ways that were not possible before, such as cir-culating nucleic acids or circulating tumor cells in blood. These could potentially be used to develop novel clinical endpoints, such as minimal residual disease, that we can discuss with regulatory agencies and apply in clinical development,” Coloma said.

As the causes of cancer become understood and the technologies for detection advance, Coloma and his peers at rival large pharma com-panies will identify new ways to treat diseases and ensure that patients receive the most appropriate drugs. This, in turn, will encourage drug developers to strike new deals while also providing payers with ways to accelerate their push to extract full value from the therapies they reimburse.

The ongoing need to sign dealsThe trends in cancer R&D and care continue to head in one direction. After a long lag fol-lowing the approval of Herceptin (trastuzumab) for HER2-positive breast cancer, the wave of targeted therapies that were expected following the Human Genome Project has arrived. When paired with the falling cost of sequencing, the proliferation of targeted drugs has given phys-icians a growing toolbox of therapeutic options and tests to assess how best to use this asset.Biopharma companies are tapping into the same resources to gain insights into new drug targets, ideas for combination therapies and ways to stratify patients in clinical trials. No single company has the mix of drugs and medi-cal technologies to execute this strategy without dealmaking—a fact that will keep companies returning to the negotiating table as they seek out the tools or methods that could give them an edge in the fiercely fought race to meet unmet needs in oncology.

Nick Taylor is a freelance journalist specializing in the global biopharma industry.vi

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Histide AGwww.hist ide.com

Cell Recoding Peptides for medical device applications in spinal fusionHistide’s Cell Recoding Peptides provide a powerful tool as therapeutic agents for tissue regeneration.

H istide is a Swiss biotech and intellectual property–platform company founded in 2014 that has pioneered a new class

of nonmutagenic extracellular therapeutic agents called Cell Recoding Molecules (CRMs). CRMs are the foundation of Histide’s Recoding Therapeutics, a groundbreaking approach pio-neered by the company that goes beyond tra-ditional cell-, gene- or RNA-based therapies to cure diseases.

CRMs harness cells’ capacity to sense and process environmental signals in order to pre-cisely fine-tune and adapt their physiology to their surroundings. Histide has used CRMs to create an innovative platform of complex micro-environments with the capacity to dictate the precise commitment of various cell types. These include cells from different tissue origins and in contrasting stages of differentiation, ranging from stem cells to specialized mature cells.

The first generation of CRMs developed by Histide are the Cell Recoding Peptides (CRPs). Peptides are well suited as therapeutic agents and present many advantages compared with other small molecules owing to their unique intrinsic properties, such as high biological activity associated with low toxicity.

The CRPs developed by Histide can activate a variety of biological functions by providing tar-geted extracellular signals with high specificity. As a result, they are well suited to efficiently stimulate cells’ natural capacity to redirect their own fate.

Controlled cell response is increasingly required in the medical device field, and in par-ticular for orthopedic applications. Most ortho-pedic devices are indeed composed of polymers or metals that provide mechanical support but lack a biochemical signal. This has triggered the development and use of 'biologics' associated with devices as a next generation of combina-tion products. These ‘biologically enabled’ devices increase graft efficacy and represent a major advancement for the field.

One of the best-known examples of such a product available on the market is the recom-binant human bone morphogenetic protein-2 (rhBMP-2), as part of Medtronic’s Infuse bone graft associated with the LT-Cage Lumbar Tapered Fusion Device. This combination device has been designed to aid in the treatment of degenerative disc disease. However, an impor-tant concern has emerged regarding the clini-cal outcome and effectiveness of this product. Furthermore, a meta-analyses study sponsored by the Yale University Open Data Access (YODA) Project has revealed that the use of rhBMP-2 in

spinal fusion is associated with important side effects, higher complication rates as well as an increased risk of cancer development.

As a result, the use of rhBMP-2 has decreased in recent years. According to Omar F. Zouani, cofounder and CSO at Histide, “The role of rhBMP-2 in spinal surgery is still controversial and remains to be precisely defined.”

Histide’s medical device approachIn light of the issues surrounding the use of protein 'biologics' in the medical device field, peptides are emerging at the forefront of the new technologies that could revolutionize this domain. Peptides have the potential to mimic precisely only the protein domain of interest, which dramatically increases the specificity of the targeted cellular response and significantly decreases the risk of complications.

Histide is therefore introducing CRPs for applications in the medical device field. Among the CRPs developed by Histide, certain types are active only when grafted to a surface. This imposes specific molecular dynamics con-straints that have been extensively studied and characterized by Histide’s scientific team as part of the drug design process. These CRPs have been conceived through rational design and can be grafted via their C or N termini to various surfaces for an intelligent interaction with the cells. The CRP-loaded devices can subsequently guide the fate of the surrounding cells, and especially of adult stem cells, for a tissue-specific regeneration outcome.

CRPs for spine surgeryBeing an intellectual property–platform company, Histide’s business model is based on license selling and establishment of spin-offs and joint ventures for various applications and medical indications. One of the six classes of CRPs developed by Histide is particularly suitable for application in bone regeneration. In addition, cer-tain CRPs have proven to be especially efficient in driving spinal bone reconstruction.

Based on this, Histide has decided to launch its first spin-off company to promote the use of CRPs in medical devices for spinal fusion. The main goal of this technology is to enhance osteoinduction in this process. The two major products marketed by the spin-off company are cervical and lumbar 3D-printed titanium fusion implants covalently coated with CRPs. An experienced management team, together with expert scientists, has been assembled in the spin-off, all committed to providing a significant advancement in the medical device domain.

According to Dr. Gianluca Maestretti, team leader spine surgery at HFR Fribourg, Switzerland, “Histide’s technology is impressive and the CRPs hold the potential to revolutionize the spine surgery field. This could be the future development for all the medical devices, with important outcome for the patients.”

In parallel to the spine applications, Histide is currently discussing partnership opportunities involving licensing deals for the development of first-in-class medical devices for other orthopedics indications.

CONTACT DETAILSOmar F. Zouani, CSOHistide AGSchindellegi, SwitzerlandTel: +41 (0)78 953 30 39Email: contact@histide.com

Figure 1: Histide’s Cell Recoding Peptides (CRPs) provide a new dimension to implant surgery. Scanning electron microscopy image of bone matrix synthesized by induced bone cells on CRP-coated titanium.

“Histide’s technology is

impressive and the CRPs hold

the potential to revolutionize

the spine surgery field.”Gianluca Maestretti,

HFR Fribourg

Histide.indd 16 15/09/2015 15:25

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MedTech Snapshot

Stay up to date on key developments in thebiological sciences.

subject areas

nature.com/subjects

CELONICwww.celonic.com

Celonic SEFEX: A GMP CHO-K1 cell line kit for drug developers and service providersSEFEX is a royalty-free cell line kit based on CHO-K1 cells. The ready-to-go kit includes cells, plasmids and detailed protocols for the handling, selection and screening process of drugs. Celonic provides the full service; from technical support and regulatory advice, through to process development and GMP manufacturing, Celonic is there for you.

The powerful SEFEX platform can be used throughout the entire product development process from laboratory cultures to production scale. SEFEX is robust, highly performing, and easy to implement. By using SEFEX you are guaranteed maximum productivity, substantial cost savings, and scale-up stability for increased project safety. Celonic also warrants that SEFEX-based production cell lines can be transferred to GMP environments.

Celonic’s SEFEX delivers to you a scalable, highly efficient cell line kit to decrease your biologics development risk. Contact us today to learn more about how to access SEFEX.

Contact detailsOle Fuetterer, Senior Director Sales & MarketingEulerstraße 55, 4051 Basel, SwitzerlandTel: +41 (0)61 56 49 159 | Email: ole.fuetterer@celonic.ch

MODULAR DIAGNOSTICSwww.modulardiagnostics.com

stat-MD™ Point-of-Care Diagnostics Platformstat-MD™ Global Health Management,Information, and Surveillance SystemThe stat-MD™ Point-of-Care Diagnostic Platform is a mobile testing platform that reduces the depth-of-testing of full-scale clinical laboratories into a catalogue of disposable test cartridges and a small analytical instrument. stat-MD™ Analytical Cartridges realize a first ever hyperplexing capacity (multi-specimen/multi-panel), and its ‘in-cartridge’ programmable reagent delivery system can accommodate asymmetric bench chemistries without the cost or complexity of MEMs pumps, valving, or electro-wetting strategies.

We will use this tool to equip and integrate healthcare providers worldwide with comprehensive on-site clinical testing laying the foundation for a global biosurveillance system powerful enough to anticipate and track threats to global health in real-time, and match global healthcare needs for the next millennium.

Patents pertaining to stat-MD™ technology are pending in numerous jurisdictions. All rights and interest to stat-MD™ products and services are owned and controlled by Modular Diagnostics.Are you ready to change the world?

Contact detailsDr. Don Roberts, Founder/CEO | Dallas / Ft. Worth, TX, USATel: +1-817-729-mRNA (6762)Email: donrobertsphd@modulardiagnostics.com

by Modular Diagnostics-stat

TM

MedTech_snapshot.indd 1 14/09/2015 11:39

NATURE.COM/NATURE

Evolving science communicationIt’s always been our mission to fi nd new and innovative ways to share the latest discoveries in science and evolve the discussion amongst the global scientifi c community. Whether in print, online or mobile Nature is your forum to read, watch, listen and engage with key research, news and opinion.

Access Nature your way.

23916-01 Nature Evolving.indd 1 06/12/2013 16:43