According to Adam Wolfberg M.D. back in Febraury 2012, Science can be as dramatic as television, and in the 15 years since fetal DNA was first extracted from maternal serum, the quest to develop a reliable, non-invasive test for Down syndrome and other chromosomal abnormalities has at times resembled a soap opera. Laboratories competed to publish first, a scandal erupted over a test for fetal gender (that was sometimes wrong), and in the biggest scandal of all, industry leaderSequenomannounced impressive results (that unfortunately turned out to be fraudulent).
But legitimate science caught up, and in recent months twocompanies have launched non-invasive tests for Down syndrome (trisomy 21) that also diagnose the other common chromosomal abnormalities, trisomy 13 and trisomy 18. Each published impressive data prior to commercial launch, demonstrating that the tests are highly accurate, with false positive and false negative rates below one percent for trisomies 21 and 18. (They are somewhat less accurate for the very rare trisomy 13.) Two othercompanies are poised to launch competitive tests in the coming months.
More companies are looking to profit from screening for Down Syndrome. Over one billion dollar market in the US alone, companies are scrambling to come out with the latest and greatest technology.
From the Genome Web Daily
Non-invasive T21 Testing Space Abuzz as Firms Jockey for Share of $1B Market, Battle over IP
NEW YORK (GenomeWeb News) – Taking aim at an opportunity that has been estimated at more than $1 billion in the US alone, several firms are using next-generation sequencing and other genomic technologies to break into the diagnostics market for fetal aneuploidy and chromosomal aberrations.
While the medical community is just being introduced to these technologies, the market is already buzzing, with a handful of players accelerating plans to commercialize their tests while battling each other over intellectual property rights.
At the same time, investors are injecting cash into firms developing these technologies in anticipation of a large payout.
In October, San Diego-based Sequenom struck first with the launch of its test called MaterniT21, which uses Illumina's HiSeq sequencing platform, to diagnose fetal aneuploidies. The test for trisomy 21, 18, and 13 is offered through Sequenom's CLIA lab, the Sequenom Center for Molecular Medicine.
The firm also recently bolstered its sales staff, recruiting and training 23 new reps and two additional regional managers to support increased sales and marketing efforts ahead of competitors jumping into the space. The CMM now has 47 pre-natal sales representatives, which are serving all 48 states in the continental US, the firm has said.
Since the launch of the Sequenom test, two other firms have started commercializing their tests, and by year's end, the field is expected to become even more crowded.
Verinata Health launched its product, called verifi, last month, making it available throughout the US except in New York, where the company is in the process of getting licensure. Ariosa Diagnostics, formerly called Aria Diagnostics, is in the midst of a soft launch and expects to broadly launch its test by the end of June, and another firm called Natera is anticipated to launch its test late this year.
Konstanz, Germany-based LifeCodexx, which is licensing technology from Sequenom, said it plans to roll out its trisomy 21 test in the second quarter in German-speaking countries after getting the CE Mark.
In addition, Fluidigm and Novartis are collaborating on the development of a microfluidics-based prenatal diagnostic test for fetal aneuploidies, though neither firm has said when it may be launched. A spokesman for Fluidigm told GWDNrecently that certain milestones have been reached and the partners are now negotiating what steps to take next.
Meanwhile, investments are flowing into the coffers of the test developers in spite of a tough capital market. Verinata raised $48.5 million in a Series C financing round last summer, while Natera, formerly called Gene Security Networks, said in January that it completed a $20 million financing round.
The same month, Ariosa, headquartered in San Jose, Calif., said that it corralled $52.7 million in a Series C round to continue developing its test, called Harmony Prenatal Test, and to commercialize it. The firm is now launching the test regionally. The test currently detects for T21 and T18, and company CEO Ken Song told GWDNthat upon the broad launch, it will also include T13.
"The fact that any of these companies have been able to raise money is indicative of the pure market opportunity," David Ferreiro, an analyst at investment bank Oppenheimer, which provides services to Sequenom, told GWDN.
The tests use genomics-based methods to identify women at high risk of carrying fetal aneuploidies or other chromosomal aberrations that can lead to conditions, such as Down syndrome. In the US, there are an estimated 750,000 such pregnancies each year.
The advantage of the technology is that it can offer superior accuracy without the risks associated with other testing methods, such as amniocentesis and chorionic villus sampling, the two most common testing methods for fetal aneuploidies and other chromosomal aberrations. Although both are relatively safe, because they are invasive procedures, they carry some risks including injury from a needle puncture, infection, and even miscarriage.
Unlike an amniocentesis or CVS, a quad test — a prenatal test done during the second trimester to evaluate the odds that a fetus may have certain developmental or chromosomal conditions, including Down syndrome, Edwards syndrome, spina bifida, and anencephaly — poses no known risk of miscarriage or other pregnancy complications, and according to Ferreiro, Sequenom's test and others like it have a risk factor that resembles that of a quad screen.
Prices for non-invasive fetal diagnostics vary widely. Sequenom's MaterniT21 Plus is listed at $2,700, while Verinata is charging $1,200 for verifi, which also detects for T21, T18, and T13.
Ariosa's Harmony Prenatal Test will list for less than $1,000. Natera, based in Redwood City, Calif., has not disclosed the price for its test.
Are Price and Utility Barriers to Adoption?
How physicians receive these tests and whether they will order them will determine their place in the market, but the early signs are promising.
In a February research note published after attending the Society for Maternal-Fetal Medicine Conference, Jefferies' analyst Jon Wood reported "plenty of interest" in non-invasive tests such as MaterniT21 Plus, and in conversations with about 25 doctors, he was told that such tests are "the most significant advancement in prenatal diagnostics in decades."
When and if the tests demonstrate usefulness in low- to average-risk patient populations and average sales prices decline "to levels more in line with comparable existing serum-based modalities," they could see "swift and broad adoption over the intermediate term," the doctors told Wood.
(Jefferies provides services for Sequenom and was the sole book-running manager on the company's $62 million equity raise in January.)
According to Ariosa's Song, anticipation for non-invasive testing for fetal chromosomal abnormalities has been brewing for at least 20 years when the technology was still in its early research phase.
"This is something that [doctors] … have been hearing about for the last several decades and now it's actually become a reality," he said. In order to drive adoption, he added, it will be critical to provide doctors with the right information so that they can decide how to best introduce the technology to their patients.
Sequenom's short history with the test may provide a glimpse of the growth potential of these tests. During its 2011 earnings announcement in early March, the company said that it received about 1,000 orders for MaterniT21 Plus in the two-and-a-half months of 2011 that it was available. In the first two months of 2012, the firm billed for more than 2,500 tests and said it hopes to bill more than 25,000 tests for the full year.
However, barriers such as a high list price and a narrow utility — MaterniT21 and other similar tests are for high-risk patients — could dampen enthusiasm for such tests.
Also, while non-invasive testing eliminates the risk of a procedure-driven miscarriage, one advantage of amniocentesis is that it provides genetic information about chromosomal abnormalities beyond T21, T18, and T13. Many doctors suggested to Wood, he said in his note, that patients generally want to have information about "every possible disorder associated with the fetus."
Another potential major obstacle to adoption of such tests is payor coverage and reimbursement.
"Any test, if the out-of-pocket cost is too high for the patient, if the co-pay is going to be too high, then that's going to be a barrier to adoption," Oppenheimer's Ferreiro said, adding that without reimbursement, a company will have no incentive to offer the test.
Sequenom currently offers its test as an out-of-network provider and bills insurers the full list price. The out of-of-pocket costs have been capped at no more than $235 for insured patients, according to the company. For uninsured patients and those choosing to pay out of pocket, the cost for MaterniT21 Plus is $1,900.
The company said it also hopes to sign on two major national insurers as well as smaller payors in 2012 and is working toward getting reimbursement from Medicaid.
In an e-mail to GWDN, a Verinata spokesperson said that in order "[t]o help facilitate the initial adoption of the test, we have developed reimbursement programs to ensure that our test is suitably priced while patients are appropriately protected from unforeseen financial liabilities."
She added that it was premature to talk about specific reimbursement levels, "but we are committed to working with payers on individual claims to maximize the benefit." Wood said in his research note that Verinata, based in Redwood City, Calif., expects payors ultimately to reimburse the test at $950.
Natera did not respond to a request for an interview, and Ariosa's Song said it was too early to comment on reimbursement levels for his firm's test.
Another critical factor for broad adoption of MaterniT21 and other similar genomic tests will be recognition by the American Congress of Obstetricians and Gynecologists. Wood said that inclusion into ACOG's guidelines will likely require "an abundance of clear and readily compelling clinical data."
It took ACOG about four years to include an ultrasound method for identifying chromosomal defects, called nuchal translucency screening, in its guidelines, and a similar timeframe should be expected for inclusion of non-invasive fetal testing, he said.
One doctor who doesn't need to be sold on the technology is Rachel Humphrey, the medical director of maternal-fetal medicine at Florida Hospital, who believes such tests are best used as alternatives to screens such as quad tests, rather than as replacements for diagnostic tests such amniocentesis or CVS.
The most important factor in MaterniT21's favor over traditional screens is its low false-positive rate, she said. Depending on the condition being tested, Sequenom's test has specificity as high as 99.9 percent, meaning one in 1,000 tests will present a false-positive result.
By comparison, other screening methods will present false-positive results 4 percent to 5 percent of the time, Humphrey said. Expectant mothers who are diagnosed with fetal aneuploidies "are left with a sort of ominous feeling about their pregnancy," she said, and "doing the MaterniT21 test, I'm much less likely to get that false-positive rate.
"That's a huge benefit for the patient in terms of screening," Humphrey added.
Unresolved IP Issues Pose a Challenge
With the economic stakes so high, the patent lawsuits have started flying. Ariosa fired the first salvo in late 2011, suing Sequenom for being overly aggressive in enforcing its broad patent covering the use of circulating cell-free DNA in maternal plasma to diagnose fetal aneuploidies.
In late February, Verinata filed a lawsuit to pre-empt Sequenom from suing it for patent infringement. At the same time, it alleged Sequenom and the Sequenom Center for Molecular Medicine infringes Verinata's IP.
Each of the lawsuits centers on US Patent No. 6,258,540, which pertains to a method of detecting a nucleic acid of fetal origin in blood samples drawn from expectant mothers. The patent is based on the research of Dennis Lo of the Chinese University of Hong Kong and colleagues in Oxford, UK. It was issued in July 2001 and assigned to Isis Innovation. In 2005, Sequenom licensed the IP from Isis.
Ariosa hasn't disclosed the technology it is using, and it hasn't contested Sequenom's exclusive right to the Lo patent, but it has asked the US District Court for the Northern District of California to declare that its test does not infringe the patent.
Verinata holds a patent that it licensed from Stephen Quake at Stanford University, No. 8,008,018, titled "Determination of fetal aneuploidies by massively parallel DNA sequencing." The patent's claims cover a method for determining fetal aneuploidy in maternal tissue using next-gen sequencing. The firm also holds the rights to a previous patent issued to Stanford University, No. 7,888,017, "Non-invasive fetal genetic screening by digital analysis."
However the lawsuits play out, many industry observers believe Sequenom will remain the market leader in the space and cite the company's first-mover status and other inherent advantages.
"[I] is our view that the depth and breadth of [Sequenom's] validated data, as well as its substantial commercial infrastructure investment, will afford it a hefty advantage relative to … emerging franchises, irrespective of [Sequenom's] ability to prevent any one of such competitors from entering the market through successful IP-related pursuits," Wood said in his research note.
But what are we really doing with the results from this technology? That is where the real questions lie. What are we doing with these results? Are we giving potential parents the truths about having a child with Down Syndrome?