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Developments in IVD to Boost Lab Services Developments in IVD to Boost Lab Services John KershawJohn Kershaw

President and COOPresident and COO

Sysmex America, Inc.Sysmex America, Inc.

Corporate Profile: Our Core Business

Diagnostics - Clinical Laboratory TestingGlobal markets: hematology, hemostasis, immunochemistry, clinical chemistry, urinalysis, information systems and cancer diagnostics.Development, manufacturing, marketing, sales, service and support of clinical testing equipment, reagents and related software.

WorkflowWorkflowConsultingConsulting AutomationAutomation PartnershipPartnership

InformationInformationSystemsSystemsInstrumentsInstruments

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Major Locations

Sysmex markets its products via its own network in over 150 countries.

Techno Techno PParkark (Kobe, J(Kobe, JPP))

Kakogawa Factory (Kakogawa Factory (JPJP)) Ono Factory (JOno Factory (JPP))

KKobeobe Factory (Factory (JPJP))

Solution Center(JP)Solution Center(JP)Sysmex America (US)Sysmex America (US)

Sysmex SingaporeSysmex SingaporeEuropean HQ (DE)European HQ (DE)

Research & Development

Manufacturing

Marketing, Sales, Service and Support

Research and Development includes the new Techno Center and other labs around the world.U.S. and international labs enable Sysmex to collaborate on joint research projects worldwide.IT products are developed in the U.S., Japan, Belgium, Slovakia, New Zealand and China.

Sysmex instruments are produced in the Kakogawa Factory, Japan.Reagents are produced in the U.S., Japan, Europe, China, Singapore, India, and Brazil.

We think globally, yet we act locally!

Established 1968 in Kobe, JapanSubsidiaries & Affiliates:

33 offices in 19 countries, supplying over 150 countries

Number of Employees: ~ 3,6002007 Sales: $1.15 billion2007 Net Income: $160 + million2007 R&D Expenditure ~10% of sales

Corporate Profile: Our Background

Source Sysmex Corp. Annual Report 2007; Year ending March 31, 2007

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LifeSciencesLifeLifeSciencesSciences

Investing in the Future

Current areas of focus*:Intra-operative detection of cancer metastasisCancer:

– Screening– Recurrence prognostics– Chemotherapy sensitivity prediction

Minimally invasive glucose testingCervical cancer detection utilizing flow and imaging.Information technology to improve clinical diagnosis and reduction of errors.

* In development, not available for sale in the U.S.

Research and development to create high-value tests for disease management.

Diagnostic Environment

80-85% of a patients medical record involves Pathology examinations.Laboratory Diagnostics represent the largest contributor to minimizing cost in the health environment.

preventative diagnostics, bed stay reduction etc.Patients & clinicians want clinical value

Screening, prevention, recurrence prognosis, therapeutic sensitivity prediction…

EconomicsReimbursement, cost containment,…

OperationsLean (efficiency), Six Sigma (quality), JIT

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Future IVD Trends

Lab automationInformation TechnologyNew diagnostic applications of existing technologyNew, integrated technologyBones, get out the tricorder!!!!!!!!!!

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Balance of cost and qualityClinical value to provide cost-efficiencyOften not the case

– Technology exists, but ‘too expensive’ for insurers & patientsEven expensive tests can reduce cost of care

– But the overall cost savings can be greater– e.g.: cancer responders vs. non-responders …

If chemo is needed would the patient respond?Who needs chemotherapy?

- Early stage cancer –- Stratify high vs. low risk patients – save treatments; better

QOL- If treatment is needed, will they respond? If no, don’t treat,

don’t pay and better QOLFinancial model: Chemotherapy costs $20K, so if 5/20 will not

respond- the saving is $100K; pricing based on the return – split with

insurer?

Trends

Automation

Major lab driversMT shortageReproducibilityReduce variation in work processesTAT - turnaround timeIncreasing workload and sophistication

Early McGill University Lab

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Automation - (continued)

May not be a panacea - not all automation matches the above needs

e.g.: Tube sorter and an analytical line (sneaker-ware is less expensive)Balance of automation and decentralization

– Incentive by reimbursement– First diagnosis sets reimbursement– TAT vs. relocate testing to ER (Present on

Admission)Specialized technologies require qualified technologists –

– The higher degree of automation – greater ability to decentralize (CLIA-waived)

Movement toward handheld, but not yet – e.g.: Technologies – genome/proteome in

a black box? – Genome is a good discovery tool but the

proteome is a good testing environment

Information Technology

Lab auto-validation = Quality (reproducibility) & efficiencyBut why are we only looking at auto-validation in the laboratory why not utilize software for predictive diagnosis???

Most lab work is ‘normal’ (98%)

e.g.: half of the abnormal 2% is infection-relatede.g.: high percentage of anemias

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Information Technology - (continued)

“How Doctors Think”, Dr. GroopmanWhat happens when they don’t think objectively?“Most errors are mistakes in thinking.”

Support of clinicians with software - futureDifferential diagnosis – expert systems tied to clinical information systems

Expert SystemsExpert Systems Clinical SystemsClinical Systems

New Test Development

ComplexityExample in genetic testing

– e.g.: Epstein Barr Virus – Same virus, different disease phenotypes

(dependent upon ethnicity): – Burkitt’s Lymphoma in Africans– Infectious Mononucleosis in Caucasians– Laryngeal/pharyngeal cancer in Asians

Ethical/moral:– Genetic profiling can lead to refusal in insurance

cover, errors in predicting disease occurrence.

Epstein-Barr Virus: www.nasa.gov

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New Test Development - (continued)

Major drivers:CostEarly detection

– Baby boomers– Complex diseases

Specific intervention– Personalized treatment– Success breeds treatment compliance and

decreases costImproving QOLPatent protection is important

New Test Development - (continued)

Emphasis Shift – earlier in the chainPrevention, screening, diagnosis, treatment

– e.g.: Genomic testing for breast cancer prognostics and prediction

– “Model” disease– Effective screening– Several treatment options

Other socialistic systems are moving rapidly to preventative testingPersonalized medicine starts when a patient is already ill

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New Test Development - (continued)

Another Example: Factor V Leiden – genetic testing - $50 mil U.S. market

High biological relevance. But as a stand-alone test, an extremely low positive predictive value (~1%).Virtually useless without family history. Only small percentage of genotype carriers express the phenotype (within a family with a history of expression testing is valuable)

– Heterozygosis increases to 7 fold venous thrombosis factor– Use of oral contraceptives increases to 4 fold venous

thrombosis factor– Heterozygosis and oral contraception = 30 fold increase of

venous thrombosis Deny oral contraceptives to many women who are heterozygous?Compare this: 30 year olds to 60 year olds -thrombosis risk goes up 1000 fold!

Analytes - The Way ForwardBasic areas

1) Genomics / Genetics2) Epidemics /

Proteomics3) Metabolomics4) Cellulomics – Flow

cytometry

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Genomics / Genetics - Nucleic AcidsThe “thousand dollar genome” sequence

Many playersPayback – identification of genetic variation with high clinical impactSequencing provides info that may not be interpretable, or even over-interpreted

– e.g.: nonsense mutations may not be fatal, such that can occur in Cystic Fibrosis

Ethical and political questions – positive and negative

Genomics / Genetics - Nucleic Acids

Developinghigher throughput & lower cost

Chip-based, biochemical sequencing

Chemical reactionCovalent bonding of Nucleic Acids to surface with fluorescence for single molecule analysise.g.: Many companies amplify multiple molecules using PCR, but analysis a single molecule is the future– There is no better quantification

– 10 – 20 years for clinical diagnostics?

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Promising Genetic / Genomic Technology

Micro-fluidic, micro-titer plate with PCR reactions and gene expressionSuccessful for some applications, but not for clinical testingToo much information?

e.g.: 96 assays across 96 patient samplesPractical? Wasted for most diagnostic labsComplex / potentially confusing

Genomics / Genetics - Nucleic Acids (continued)

Micro-array technology15 years old, but useful in the futureComplex sample preparation –DNA purification from inhibitorsMost technologies too complex for clinical useMany companies/researchers working on integrated applications for nucleic acid testingResearch vs. clinical

– Too few analytes at the moment, but precision via redundancy

– Technology overkill for few data points? Conventional technology may be more effective.

answers.com

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Genomics / Genetics - Nucleic Acids (continued)

Today – 1 million data points for $1,0005 years ago – 10,000 data points

100 fold increase for the same cost!

So much data available, yet with little So much data available, yet with little or no interpretation of clinical value.or no interpretation of clinical value.

Errors in interpretation and thinking?Errors in interpretation and thinking?

Nucleic Acid Testing

Much genome info. availableCompletion of the human genome projectApplication of powerful technologies for expression and association studies

Much of the NA info doesn’t correlate well to proteomic expression Lack large scale clinical validation studiesPrognostic and therapeutic response testing

using genomic info to predict outcome is the same as looking at a symptom to diagnose a disease

Urine or saliva testing – non-invasiveNot yet clinical, but soonNucleic acid panels

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Proteomics – One way of the future

More complex than nucleic acid testingMore info than in the genomeEnables more efficient screeningMore current protein markersCurrent ELISA is not sensitive enough

ELISA technology of today requires development to increase sensitivity

Currently a discovery approachBackward look to genomicsForward look to disease statesTherapeutic monitoring practices

Characterization of the Human Proteome? bcm.edu

Proteomics- Proteins and Peptides

Chip-basedHigh affinity chemistriesGood for selectivity and quantification in complex biochemical matrices

MALDI-TOF (Matrix Assisted Laser Desorption / Ionization – Time of Flight)

“electrophoresis in a high vacuum”Research - ID proteins from gel electrophoresisResearch vs. clinical (opinions differ)

– Great discovery tool, but less suitable for clinical applications

– Qualitative, not quantitative (except for DNA/RNA)

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Metabolomics / MetabolitesThe End-game

Small-molecule metabolite profiles via mass spectrometryDeveloping

Simple - lower costHigher throughput - rapid

Research vs. clinicalIsotopic resolutionProven, variety of sample preparationCurrently in use neonatal screening(e.g.: Tandem Mass Spec. – Inborn Errors of Metabolism) - quantitative

Cellulomics – Flow Cytometry

Developinghigher throughputlower cost

Research vs. clinicalCommon research techniqueComplex sample preparationMost technologies too complex for clinical

Time horizon:In use – heme, etc.

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Cellulomics – Flow Cytometry - (continued)

Cell surface markersSeparation of cell populationsRemoval of backgroundFurther testing for nucleic acids or proteins

Benefit of earlier detection of metastasisMove closer to the patient?

e.g. analogy to CAT scanner – we can see it, but can’t always explain it.

Imaging

Non- / minimally invasiveReagent marker injection

Specific reagents for cancer detectionBinding to metastatic cellsTomographyImaging is a snapshot (i.e.: 2-dimensional) vs. other dynamic technologiesRecent paper showing research at the million cell level

Can we reach the single cell resolution level?Exceeding Moore’s Law?

Previously no after-sales; revenue stream needed from contrast reagents

New contrast reagents are specific – revenue streamOverlapping reagents with In Vitro Diagnostics

wikimedia.org

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Conclusions

Many tests and processes will be automated, whether they stay in the lab or move to point of care.

• ~85% of patient record is diagnostics;• This will increase, not decrease

• The technologies discussed will play a significant role in the increasing proportion of the patient record

• Imaging will not be a panacea for diagnostics; for the moment, stays a macroscopic approach and clinical lab diagnostics remain at a cellular and sub-cellular level

If I were a lab director, I would bet on these to boost lab services in my lab.

Single molecule analysis & quantification is a way of the future – whether it’s a protein, NA, etc…Micro-array

Too few analytes today, but…a technology of the future providing high precision via redundancy

ELISA technology of today requires development to increase sensitivity

3 orders of magnitude requiredMetabolites

Mass spec too complex for most clinical labs, but…has increasing application for screening in specialized labs

Flow CytometryEasy to use, fastOncology and infective disorders

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Thank you.