Once More Into the Breach Lads!

Thursday, September 20, 2012

On September 17, Life Technologies and Bristol Myers-Squibb announced a partnership agreement to develop CoDx products. One of the key points of the press release was that Life will be able leverage its new CLIA laboratory in the development process. This got me to thinking: has the time finally arrived for the decades-old business model of taking RUO products to IVD kits through a reference lab? Or is this just another example of a life sciences company going "over the top" into a no-man's-land of regulatory and commercial minefields and barbed wire?

It is worth noting that the path that Life finds themselves on today is fairly well worn. Others have taken up the same fight, only to find success elusive (keep in mind the reference lab they bought used to belong to Affymetrix). So why then should we think that Life might have finally hit upon the right model? The answer is simple: timing.

To better understand the opportunity that this press release presents, it's a good idea to look back at this commercialization model through history, albeit a recent history. Back in the 1990s when I was working at Chiron, Roche was stealing our lunch money and smacking us around in the HIV viral load market. The issue  was not difficult to understand. They had a highly-sensitive, FDA approved test for monitoring HIV viral load and we, well, didn't.

So in order to keep the lights on while we tried to gain FDA approval, Chiron started a reference lab. The idea was that we would push our latest technologies through the lab and offer them to pharma companies and large research projects for clinical testing. The tests would be CLIA certified and tightly controlled by the Chiron reference lab. It was a way to generate revenue on new, more sensitive technologies while they were still under development. And it was a way to keep our tests relevant in the face of ever increasing commercial challenges.

But at the end of the day, the Chiron reference lab was a stop-gap measure, not some novel business model. Over the ensuing years, other life science with fledgling diagnostics divisions have attempted a similar pathway in the hopes of tapping into the boundless riches of the clinical trial testing market.  One-by-one they all came to the same conclusion, that the clinical testing lab model is flawed. Because, like the trench warfare of World War I, there was no good exit strategy. You spend a lot of time and money on infrastructure and materials, but you never really make any progress. It doesn't speed adoption of your platform in diagnostics, it just sucks down resources and money.

So why is what Life offering any different? The answer is that they have something that others before them didn't: a clear exit path. The way out of the trenches is through development of a companion diagnostic. Life Tech can offer companies like BMS a clear path to regulatory approval of the CoDx. Early in the biomarker discovery process, Life can supply the tools to enable Phase I trials. Once a marker is identified, Life can develop the test and make it available for Phase II testing in their reference lab. And when Phase III testing is set to begin, Life can provide a validated kit and platform to run the studies on. This whole product solution also solves the major problem facing many pharma companies, specifically how to take the same platform all the way through the drug development process.

The key for Life Tech in all of this is, of course, discipline. Frankly, this is not something that many life sciences companies are very good at. They see the discipline required for IVD development as running counter to the innovative mindset that made them successful. But IVD commercialization is about slogging through the product development  process in a controlled manner. It's not glamorous or sexy, but it can be very rewarding if done well. If Life can find a way to stay on task and keeping moving forward, they might just succeed in breaking out into a shiny new market.

Tags: CLIA, CoDx, IVD, Partnerships / Alliances

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