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JP Morgan Notes on Research Services, OTC Testing, Cell-Free Testing

By Allison Proffitt

January 17, 2022 | At the JP Morgan Healthcare Conference—being held virtually again this year—diagnostics companies gave overviews of their 2021 business and their views of the future. Here are the highlights we noted from presentations from Thermo Fisher Scientific, Abbott, and Natera 

Thermo Fisher: Push into Clinical Research Services Industry

The Covid-19 pandemic was a powerful driver of business in the past year for diagnostics companies. “We increased our role in responding to the pandemic, enabling covid-19 PCR diagnostic testing around the world. Probably in the range of 20-25% of all the PCR tests have been run on our platforms,” Marc Casper, president at CEO of Thermo Fisher said, adding that the company has also played a “major role” in supporting Covid-19 vaccine therapy projects worldwide.

“The financial benefit of that we’ve been able to invest to accelerate our growth strategy,” he added, accelerating R&D investments, expanding capacity, and acquisitions. 

It’s been a banner year for product launches from Thermo Fisher: new mass spectrometers, bioreactors, microscopes, PCR, and consumables. Casper reported that nearly 60% of Thermo Fisher’s revenue comes from pharma and biotech now, with 14% coming from diagnostics and healthcare and roughly equal percentages from industrial research and academia. 

Thermo Fisher’s acquisition of PPD is, “a natural extension of our capabilities to the pharmaceutical and biotech industry, which is our largest and fastest-growing in market,” he said, establishing “Thermo Fisher Scientific as the global leader in the attractive high-growth clinical research services industry.” 

Abbott: Strategic Market for Rapid OTC Testing 

In a fireside chat style presentation, Abbott’s CEO, Robert Ford, gave an overview of how the company is viewing the Covid-19 diagnostics landscape. “Across all platforms Abbott is really the only company that has looked at all the technologies in testing and diagnostics to be able to able to approach the buyers and the testing of the buyers in a couple of different ways,” Ford said, listing the company’s PCR tests, isothermal molecular rapid system, and the rapid antigen test. In the United States, Abbott has received EUAs from the Food & Drug Administration for five antigen diagnostic tests and four molecular diagnostic tests for SARS-CoV-2. 

Last year, Ford said, the company had predicted that rapid testing would be the more sustainable SARS-CoV-2 testing market, persisting after symptomatic PCR testing had declined because of greater availability, lower cost, and faster turnaround time, “which is why we invested heavily right from the beginning on manufacturing capacity in the US and internationally.” Currently Abbott is manufacturing “well over 100 million tests per month,” and has space to expand.

But even in late 2021 the company was seeing holiday surges in both symptomatic PCR testing and rapid molecular tests. “It’s a challenge to forecast,” Ford said, “The part that we did get right was the importance of rapid testing, the importance of having scale of that technology. The timing of it was a little bit difficult; that is going to be our challenge.”

Abbott is still closely watching testing trends as the US exits the holiday season and—hopefully—comes to the end of the omicron variant surge. “The bigger picture here is that obviously testing will eventually ramp down, but there will be a portion that will be sustained.” 

For Abbott, the category as a whole will drive business going forward. “Rapid point-of-care, rapid OTC testing, that’s an interesting strategic play for us: to use the portfolio of products that we have and really start to build a more sustainable rapid point-of-care, rapid diagnostic business, not only straight to the consumer but also to other channels outside of the four walls of the hospital.”

For the past four to five years, Abbott has been considering the convergence of diagnostic testing and consumer technology, looking for ways to bring the two together to provide a more personalized experience for the patient and address healthcare system costs, Ford said. 

Abbott’s Covid-19 rapid antigen test is a leading example. “We could have done a simple test, but we paired it together with our app, the Navica app, and worked to provide that direct experience where somebody could buy the test and then get their pass on their phone.” Ford predicted similar convergences in the future for remote monitoring programs and field testing, for example for concussion and traumatic brain injury. 

Another area of future work that Ford predicted was a line of consumer bio-wearables under the Lingo brand, building on Abbott’s Libre diabetes platform, monitoring glucose and ketones for non-diabetic applications. Ford called it “a great growth engine for Abbott.”

Natera: Prospective Outcomes Data Driving New Markets

Steve Chapman, Natera’s CEO, reported on the company’s expansion of their cell-free DNA technology to applications beyond women’s health including oncology, and organ health. The company saw a 52% growth in tests processed versus 2020. Natera also announced its expansion into early cancer detection in 2021 and launched three organ health tests. 

In August 2020, the American College of Obstetrics and Gynecology updated recommendations to suggest that all pregnant women have non-invasive prenatal testing (NIPT), and this change in guidance drove much of Natera’s testing growth in 2021, however it wasn’t the only driver of growth, Chapman said. The company also saw volume growth in oncology with its Signatera test and organ health with the suite of Prospera tests. 

In NIPT testing, Chapman particularly highlighted Natera’s “responsible approach” to returning results. Tests are extensively peer-reviewed; Natera has more than 69 women’s health peer-reviewed publications. Positive and negative predictive values are made clear on every report and tests include free genetic counseling. Natera NIPT tests emphasize that they are screening, not diagnostic tests and results are reported are risk scores. “We make a significant effort to be transparent with the results,” Chapman said.

Natera is taking the same research-heavy approach to all of it growth in 2022, and Chapman reported a shift he’s seeing in oncology evidence generation. For the past four or five years, he said, Natera has focused on validation data: sensitivity, specificity, and predictive value. For example, the SMART trial, which looked at NIPT accuracy for aneuploidies and microdeletions, was presented at the Society for Maternal-Fetal Medicine conference and is expected to be published in 2022.

But Natera does not plan to stop at validation studies. “What’s really going to drive guidelines and drive utilization is prospective outcomes data,” Chapman said. “That’s things like disease-free survival, overall survival, or predictive data that shows MRD testing can predict treatment benefit.” Natera has more than 100 studies underway, he said. The cumulative value of the indications in the pipeline could expand the total addressable market to 13 million tests per year. 

Chapman highlighted a few of those tests. In late January at the ASCO GI Cancers symposium, Natera expects to new data to be released from the Circulate-IDEA Japan study, the largest prospective MDR study in colorectal cancer. “We’ll be talking about the predictive nature of the test, building evidence that could change society guidelines,” Chapman said. He expects the study authors to share data showing that MRD negative patients do not benefit from adjuvant chemotherapy in colorectal cancer. As another example, the Trifecta study is the largest prospective fully biopsy-matched, multi-site cohort of dd-cfDNA for kidney transplant recipients, Chapman said. The study manuscript is in preparation. 

“We’re real excited not only about what’s in front of us today, which could be a very big opportunity for us to help millions of patients,” Chapman said, “but also about what’s going to come in the near future.”

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