Medical Device Daily Associate

SAN FRANCISCO — As is usually the case here at the JP Morgan Healthcare Conference, a range of diagnostics companies both large and small were present to make their case for added investor dollars. And if crowded rooms are any measure, they were drawing plenty of interest.

Among the presenters making their case in this sector were diaDexus (South San Francisco), still an adolescent in this field, and the more mature Hologic (Bedford, Massachusetts).

Patrick Plewman, president/CEO of diaDexus, featured his company’s flagship PLAC test, characterizing it as a potential blockbuster “when you put it in context of the some 130 million lipid panels that are performed every year in the United States alone.”

The PLAC test measures an enzyme in the blood called lipoprotein-associated phospholipase A2 (Lp-PLA2), and diaDexus says that “large population studies” demonstrate that elevated Lp-PLA2 is associated with an increased risk of ischemic stroke.

The test offers another advantage, Plewman noted, in that it can be run on the installed clinical base of instruments in all of the clinical reference laboratories around the world, “and today we have it available through these various leading national reference laboratories including LabCorp [Burlington, North Carolina] and Quest [Teterboro, New Jersey].”

diaDexus was spun out of SmithKline Beecham (now GlaxoSmithKline; London) in 1997 as part of a joint venture with Incyte Genomics (Palo Alto, California), with the view to be focused on diagnostics “where the scale and margin would be akin to therapeutics,” Plewman said.

The PLAC test was approved in 2003 by the FDA to be used as an aid in predicting an individual’s risk for coronary heart disease and ischemic stroke associated with atheroslerosis (Medical Device Daily, July 23, 2003).

Plewman said the aim of tests like PLAC are to identify patients who have an intermediate risk of stroke.

“Doctors know what to do with the high-risk patients — they’re treating those patients aggressively already.” But for low-risk patients, he said they are often told to “come back and see us in five years,” when it may be too late. And he noted that nearly 40% of adult Americans fall into this intermediate risk bucket.

“We know that they would benefit from a statin,” he said, but not everyone is going to get those drugs. “What we need is better tools to help identify who is within this group who should be elevated to a higher risk and treated more aggressively.”

A major platform for increased diaDexus sales has been the recent granting of a CPT code from Medicare for the test at $47 vs. a year ago when the government was only reimbursing the test at $18. That increase has been coupled with the new version of the test that has moved from manual to fully automated.

“Reimbursement is there [and] the economic incentive is there to allow the labs and distributors to get behind this test,” Plewman said.

The company is not shy about its goals.

As it rolls out its automated test, it expects to increase sales for the PLAC test from 200,000 in 2006 to 600,000 this year, and aims to get the test into 5 million to 6 million of all lipid panel tests in the U.S. by 2010, for revenues of $150 million vs. $17 million last year.

While the PLAC test is its major play, the company also is developing cancer diagnostics, the most advanced currently being evaluated for the early detection of ovarian cancer. It hopes for approval by year-end. It also has initiated a nucleic acid diagnostics program focused on developing tests to aid in the prognosis and staging of breast, colorectal and other cancers.

Hologic, a diagnostics and medical imaging company focused on women’s healthcare, reported on its plans to take its newly acquired technology to market.

The company was highly acquisitive in 2006, with purchases of R2 Technology (Sunnyvale, California), a major player in the field of computer-aided detection (CAD), for $220 million; Suros Surgical Systems (Indianapolis), a developer of devices used for minimally invasive biopsy and tissue excision, for $240 million; and AEG Elektrofotografie (Warstein, Germany), which manufactures photoconductor materials — and Hologic’s sole supplier of amorphous selenium photoconductor coatings used in its Selenia full-field digital mammography detectors — for $26.56 million.

Jack Cumming, CEO and chairman, said that the most exciting short-term development for Hologic is hoped-for FDA approval of its Selinia tomosynthesis 3-D full-field digital mammography system sometime this year, probably in November or December.

Tomosynthesis obtains digital data that can be manipulated and displayed in a variety of ways, including paging through or cine display of thin sections or slices of breast tissue, helping to eliminate the problem of overlying tissue that might be mistaken for lesions or that may hide small cancers.

Eventually, Cumming said that 3-D tomosynthesis will be standard-of-care for digital mammography — “it has that kind of promise.”

He said this will mean that women “will not be sent for [unnecessary] biopsies,” or, conversely, “they will be sent because the doctor can be more sure that the area is highly suspicious.”

The company also recently unveiled its Discovery bone densitometry system that is able to do 3-D analysis.

“What that system allows us to do is look at the integrity of the hip, and this has not been done before,” said Cumming. He added, “you’ll be able to tell if this bone is likely to fracture. Fracture risk is going to be the most important determinant going forward in bone densitometry. This, like tomosynthesis [in mammography imaging], we believe will end up revolutionizing osteoporosis over the next five to ten years.”

The Suros buy has excited the company, especially because “disposables are 70% of the revenue of Suros and the growth rate is over 50%.”

The R2 buy, said Cumming, was an essential move for the company, since “CAD will be an important element for tomosynthesis.”

Founded in 1986, Hologic can banner a string of 11 consecutive quarters of improved profits and top-line growth, noted Cumming

“We are clearly,” said Cumming, “the market share leader in the United States,” the most lucrative market in the world for the company’s products with the highest margins from selling these imaging systems. But he said that Hologic will be more aggressive in penetrating international markets over the next three to five years.