A Medical Device Daily

Correlogic Systems (Bethesda, Maryland), a proteomics company developing pattern recognition technology for the detection of cancer and other diseases, reported receiving an equity investment – the amount undisclosed – from Quest Diagnostics (Teterboro, New Jersey), a U.S. provider of testing, information and services.

Quest retains an option to commercialize specified diagnostic tests Correlogic is currently developing for certain disease states.

“This new dimension to our relationship with Quest Diagnostics will accelerate Correlogic’s delivery of pattern recognition based diagnostic tests,” said Peter Levine, president and CEO of Correlogic. “Quest Diagnostics has been a leader in recognizing the value of applying proteomics and pattern recognition technology to diagnostics, and their commitment to our technology and our company will ultimately enhance patient care.”

Correlogic has developed technology and processes with various uses for biomarker discovery, disease detection and new drug discovery. Its first application is the profiling of serum components relating to the early detection of prostate, ovarian, breast and other cancers. Correlogic has entered into licensing agreements with Quest and Laboratory Corporation of America (Burlington, North Carolina) for the North American market development and commercialization of a diagnostic test applying Correlogic’s technology to ovarian cancer. Its OvaCheck blood test for the early detection of ovarian cancer is in the final stages of validation, the company said.

Cancer diagnostics firm Clarient (San Juan Capistrano, California) and DakoCytomation (Glostrup, Denmark), a provider of cancer diagnostics and automated testing equipment, said they are developing an agreement under which DakoCytomation will distribute the ChromaVision Automated Cellular Imaging System as an adjunct to the DakoCytomation automated diagnostics equipment suite.

The companies said that with the signing of a definitive agreement they will launch development activities, and DakoCytomation will begin “commercial execution” in September for the sale and distribution of the current Clarient imaging system in North America. It will move to international markets “in the future.”

Financial terms of the accord were not disclosed.

The agreement will bring together Clarient’s strength in quantitative cellular imaging and analysis with DakoCytomation’s strength in antibody reagents and automated staining systems.

In a statement, the companies said that the accord comes “at a critical time in the cancer diagnostics marketplace,” due to the increasing emphasis on personalized medicine. “With more than 90 targeted therapeutics in Phase III clinical trials and more than 300 in Phase II, the need for advanced diagnostics to direct therapy is going to grow significantly in the next five to 10 years,” the statement said, with the two companies “uniquely qualified to lead the diagnostics industry through this important period.”

The intention of the agreement is for DakoCytomation to integrate its automated staining platforms and reagents with Clarient’s digital imaging system, providing greater accuracy in the interpretation of clinically important tumor cell characteristics and improved laboratory workflow. DakoCytomation will begin selling the imaging system to its installed base of current customers and to new customers in North America in September 2005.

Dennis Chenoweth, vice president, pathology, for DakoCytomation, said the collaboration “will allow us to provide highly reliable systems that will improve the accuracy of cancer diagnostic testing and enhance the quality of cancer patient care.” He promised development of “well-positioned, technologically superior” products which will challenge the companies’ competitors.

DakoCytomation says it introduced the first pharmDx cancer diagnostic test, HercepTest, a semi-quantitative immunohistochemical assay used to determine HER2 protein over-expression in breast cancer tissues to help select patients who are most likely to benefit from therapy with Herceptin. “The ChromaVision Automated Cellular Imaging System is the first imaging device cleared to detect, count and classify cells of clinical interest and the first to obtain FDA clearance for the use of image analysis with HercepTest,” it said in a statement.

Clarient calls its platform “the only cellular imaging system” with broad regulatory clearance as well as specific clearances for HER2, ER and PR.

The companies said they are collaborating on developing advanced image analysis and testing systems and procedures for other tumor markers.

In other financing activity:

• LHC Group (Lafayette, Louisiana) reported the pricing of its initial public offering (IPO) of 4.8 million shares of its common stock at $14 a share. A total of 3.5 million shares are being offered by the company, along with 1.3 million shares being sold by certain stockholders of LHC. LHC Group will receive no proceeds from the sale of shares by the selling stockholders.

The managing underwriters of the offering – Jefferies & Company and Legg Mason Wood Walker – have been granted an option for a period of 30 days following the offering to purchase up to another 720,000 shares from certain stockholders solely to cover over-allotments.

LHC said its common stock was expected to begin trading on the Nasdaq, under the symbol LHCG, yesterday.

LHC is a provider of post-acute healthcare services. It provides home-based services through its home nursing agencies and hospices and facility-based services primarily in southern U.S. rural markets through its long-term acute care hospitals and rehabilitation facilities.

• Arrowhead Research (Pasadena, California) reported that it delisted its warrants to purchase common stock from Nasdaq after the close of business June 8, as part of its previously reported warrant redemption plan. Warrant holders may exercise their warrants until 4 p.m., PST, on June 14. The warrants are exercisable for $1.50 a share and are redeemable at the redemption price of $0.001 per warrant. Warrants not exercised by the exercise deadline will be redeemed by the company for $0.001 a share on June 15.

Arrowhead Research is a nanotechnology company structured to commercialize products for the life science, materials and electronics markets, with three components: outsourced R&D, commercialization and The Patent Toolbox. Arrowhead says it has acquired or exclusively licensed patents and patent applications covering a broad range of nanotechnology and seeks to add to this IP portfolio.