November 30, 2012

How is prenatal sequencing selling?

The short answer: Well enough.

The long answer

The other day, I was reading Atul Gawande's excellent book Better: A Surgeon's Notes on Performance. The book examines different aspects of what makes a great physician, but also offers general lessons for the rest of us who are not doctors on how to improve whatever we do.

The book is so well written that I couldn't even put it down during dinner. Big mistake: The chapter on obstetrics and child birth, which describes some of the things that can go wrong during pregnancy and birth, caused me not to finish my meal.

A concern for things going wrong is probably the major reason why prenatal diagnostic tests of foetuses are so popular. These test include ultrasound, chorionic villus sampling, and amniocentesis. And for about a year now, also sequencing-based diagnostics.

I've described these tests before and will not do so again. Companies offering these diagnostics include Verinata, LifeCodexx, Ariosa, Natera, and Beijing Berry Genomics. However, the clear market leader is Sequenom.

When I last covered this topic in January, Sequenom had just started to sell it MateriT21 test. Back then, it wasn't clear whether it would sell well at all.

Now it is. The sales figures are in, and in the third quarter, Sequenom shifted an annualised 90,000 tests. No doubt they'll exceed their previous goal of 50,000 tests until the end of this year.

Initially, Sequenom charged $2,700 per test to insurers, which with 90,000 tests sold would be equivalent to annual revenues of $243 million. The cost of the tests probably has come down in the meantime, although it is not clear by how much, as this information to my knowledge isn't shared by insurers or by Sequenom.

Sequenom's reported quarterly revenues from diagnostic testing are however much lower than this, at $12.5 million (annualised $50 million). This suggests an income of less than $600 per test, which is much lower than I'd have expected.

It's likely that sales will keep rising, as there is still plenty room for expansion: Of the 4 million births in the United States each year, 750,000 are considered high risk, either because of maternal age or a family history of genetic problems. All of these pregnancies could potentially benefit from a prenatal sequencing test.

November 23, 2012

Things used to be better, didn't they?

This is slightly off-topic, but I think it's entertaining enough to warrant a post.

A few days ago, my uncle gave me a present. It's a book to celebrate the 50th birthday of the German pharmaceutical company Madaus, which is nowadays part of Rottapharm-Madaus. There is no publication date in the book, but since Madaus was founded in 1919, it's probably from 1969.

It must have cost Madaus a bundle to publish, as it's printed on very high-quality paper and contains lost of cardboard pop-outs and special effects. To see what I mean by that, have a look at the video below.

What struck me even more is how likable the company comes across. In any case, more likable than pharma companies do in their marketing material today. The most obvious difference is the humour, which is very irreverent for corporate promotional material. So much so that at first I suspected that the book is a spoof, but for that it's way too elaborate.

For example, a pig is dissected next to someone counting piles of money, and the caption reads: "Not only the piggy bank generates money when dissected properly".

Very approximate translation: "He who is a good shepherd, feeds his animals (and turns them into cash)". The green stuff is real fake grass
Translation: "Not only the piggy bank generates money when dissected properly"

Genius at work

Translation: "We live from what we do". And not too badly either, apparently
Lab mice. The squeaky sound effect is built into the book.

November 16, 2012

How do genomics companies make money?

Genomics is a relatively young discipline, and it is also quite fragmented. There are bacterial genomics, cancer genomics, agrigenomics, pharmacogenomics, and so on.

Which leads me to this post's question: Which sub-discipline of genomics spins out the most companies? This is important, because it is related to the question of why we think that genomics is useful.

Main source of income for a panel of 72 genomics companies. More than half of companies generate their income by selling to the research community.

The result is that almost half of all genomics companies exist to support either academic or commercial research. I'm not an economist, but this is hardly what I would have expected from a mature and self-sustaining industry. Selling mainly to researchers should probably not be the long-term goal of the genomics industry as a whole.

The second biggest category is Genomic Diagnostics. This category would be even bigger if I hadn't split out Cancer Genomics separately. The implication is that most people think that the best way to make money in genomics, other than selling to researchers, is to develop diagnostics.

To decide whether this is true, it would be necessary to compare the sales and profit margins of the companies in my sample. This could warrant another blog post, but I'm not confident that I have enough data to make a call.


The panel of genomics companies I used is the same than I used in previous analysis. It consists of 72 companies, all of which are listed on Crunchbase. All of them have received at least some third party funding.
I assigned a label to each company, depending on how they make money and who their customers are. If the customers are research labs or other genomics companies, I assigned the label Research Services and Equipment. To all remaining companies, I assigned one of the other labels, depending on how they claim to make most of their money according to their website.

November 9, 2012

Is the UK really uniquely placed to datamine electronic health records?

The advantages of storing patient information in electronic health records (EHRs) rather than on paper are obvious: Data can easily be accessed from multiple locations and be transferred between doctors, hospitals, and software programs.

There is another, less direct advantage as well: EHRs can be datamined to glean new medical insights. For example, this way the adverse side effects of drugs in specific subpopulations can be detected in a much more sensitive way than would be possible otherwise.
The usefulness of datamining health records is clear. For example, the effects of thalidomide on foetuses were first demonstrated by analysing paper health records. Such analysis could be done much more efficiently with access to electronic records.
Here in the UK, many clinical researchers claim that the UK is uniquely placed to be at the forefront of this type of research because of the unique nature of the way health care system is organised. But is it really?

The National Health Service (NHS), the UK's publicly funded healthcare system, is enough of a source of national pride to have featured in the Olympic opening ceremony in London earlier this year.
The NHS is in the process of opening its EHRs to research via a system called the Clinical Practice Research Datalink (CPRD). This will enable datamining of EHRs, and the results will be shared with scientists once they have been anonymised to protect patients' privacy.
The question remains whether this is particularly revolutionary. Other European countries also have centralised healthcare systems that are often better managed than the NHS, and have made attempts to replace legacy health records with electronic systems. The success of this has been varied. For example in France, like in the UK, adaptation is slow. The Nordic countries are relatively far ahead in this matter. Germany, due to the decentralised nature of its healthcare system and because of privacy concerns, has not even bothered to try.
But as far as I can tell, there is surprisingly little effort to open the EHRs that are up and running to epidemiological research comparable to England's CPRD. Spending a few hours on looking for information on this, I could not find evidence of a system that is comparable in scope to CPRD anywhere else in Europe.
If you know of comparable efforts in Europe or beyond, I'd therefore be very interested to hear about them in the comment section.