A blossoming diagnostic duo
Qiagen acquires DxS in deal worth up to $130 million
VENLO, The Netherlands—Qiagen N.V. has acquired DxS Ltd., aprivately held developer and manufacturer of companion diagnostic productsheadquartered in Manchester, U.K., in a deal valued at $95 million, plus up toan additional $35 million if specified commercial and other milestones are met.
DxS makes genetic testing kits to determine which patientsare most likely to benefit from certain cancer treatments.
Qiagen, which makesa testing kit for swine flu, says DxS's assets complement its "existing strongportfolio of personalized healthcare diagnostic solutions."
Qiagen also says the combined company is currently active inmore than 15 collaborations with pharmaceutical companies to market and/ordevelop companion diagnostic products.
The programs span genetic, expression,epigenetic and other markers. Qiagen believes that this pipeline is the deepestsuch portfolio in the pivotal field of molecular diagnostics for personalizedhealthcare.
The acquisition of DxS brings to Qiagen a portfolio ofmolecular diagnostic assays and intellectual property, as well as a deep pipelineof active or planned companion diagnostic partnerships in oncology with many ofthe leading pharmaceutical companies, including seven of the largest drugmakersin this field.
According to Peer Schatz, Qiagen's CEO, the company sellsits sample and assay technologies in four markets—molecular diagnostics,academic research, the pharmaceutical industry and applied testing.
"In molecular diagnostics, we've defined three differentsegments where we execute a strategy to attain and expand a leadershipposition," he notes. "These segments are prevention, profiling and personalizedhealthcare. According to industry reports, the market for personalizedhealthcare has seen a compound annual growth rate of 24 percent over the lastdecade, amounting to $13 billion in 2008. It is estimated that the segment foroverall K-RAS testing alone could reach up to $100 million—and we have 18products, several of which are currently in the pipeline targeted for FDAsubmissions and CE marking."
Qiagen isn't a newcomer to the field. Prior to thetransaction, the company was marketing a broad portfolio of sample and assaytechnologies for personalized healthcare.
"Our offering included 11 personalized healthcare tests,including Pyrosequencing-based assays for K-RAS and BRAF, a test for a genevariation associated with adverse hypersensitivity reactions to the HIV drugAbacavir, methylation assays for various cancer biomarkers and a broad range ofassays for the discovery of future biomarkers along with the corresponding instrumentationplatforms," adds Schatz. "The acquisition helps us to further expand thisoffering, and positions Qiagen as the leading independent supplier of companiondiagnostics products."
After the deal, the combined company will market a portfolioof 18 assays for personalized healthcare—thereby leading in K-RAS testing asthe first blockbuster segment, with additional assays in the near- andmedium-term pipeline and boasting more than 15 partnerships with pharmaceuticalcompanies.
"In K-RAS testing, the DxS assay uses the well establishedPCR technology in an assay format which is the option of choice for companionuse with several major drugs," Schatz says. "It is therefore the first optionfor labs which detect clinically relevant mutations. It has been significantlyvalidated with, and is an integral part of, the clinical trials of severaldrugs already in the market. Qiagen's Pyrosequencing based test detects bothknown and unknown mutations and thus offers a more complete picture, being asecond option for these labs. This becomes relevant for instance for futureresearch purposes or for new clinically relevant targets. Also, DxS' portfolioand pipeline of assays is strongly suitable for use with Qiagen's existingsuite of instruments, including QIAsymphony and Rotor-Gene Q."
DxS was founded in 2001 by CEO Steve Little and co-directorDavid Whitcombe. The company has developed a set of molecular diagnostic assaysthat allow physicians in oncology to predict patients' responses to certaintreatments in order to make cancer therapies more effective and safer.
Thecurrently marketed portfolio spans seven real-time PCR tests including a testfor the mutation status of the oncogene K-RAS, which is indicative forsuccessful treatment of patients suffering from metastatic colorectal cancer(mCRC) with EGFR inhibitors. In addition, three assays are in the near-termpipeline and further assays are in the medium-term pipeline.
DxS' portfolio of assays, both marketed and in its pipeline,is strongly suitable for use with Qiagen's existing suite of platforminstruments, including QIAsymphony and Rotor-Gene Q, Little says.
"Qiagen is the ideal partner for DxS to roll out our assaysglobally, to take our partnerships to the next level and to take a leadershipposition in companion diagnostics," says Steve Little, founder and CEO of DxS.
Following closing of the transaction, DxS will be renamedQiagen Manchester Ltd. Senior management at DxS will join Qiagen in leadingroles in the rapidly expanding personalized healthcare focus area, facilitatingrapid integration and focus on the further expansion of this key segment. Forthat purpose, Qiagen intends to establish a headquarters for DxS in Manchesteras a Center of Excellence in pharma partnering.
According to Schatz, the combination has the potential tocreate a classic"win-win situation for everyone involved."
"Overall, our goal is to further deepen the existingpartnerships and establish new collaborations with pharmaceutical companies,and to drive the future development of personalized healthcare applications tocreate a win-win situation for all stakeholders involved," Schatz concludes.