DNA Methylation deal

Cancer detection targeted as Clinical Data\'s Cogenics division will offer Epigenomics\' DNA methylation service

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NEWTON, Mass – In an agreement that could have significant impact on the availability of cancer screening tests, Clinical Data and Berlin, Germany-based Epigenomics AG have agreed to offer Epigenomic's proprietary DNA methylation services through Clinical Data's Cogenics service division.

Speaking for Cogenics, Dr. Robert Bondaryk, senior VP and general manager of the division, notes that DNA methylation of cytosine occurs "every once in a while" and has been associated with important biological events that range from cell differentiation, to aging and, more recently, to cancer. "The agreement with Epigenomics will allow us to offer our QPCR, microarray technology and sequencing in a methylated version," he says. DNA methylation will eventually be tech-transferred into Cogenic's sites.

The market for cancer screening tests is significant, as the target population includes all people above the age of 50, a population numbering more than 300 million people in major market countries by Epigenomics' count. The company, which bills itself as a cancer diagnostics company, cites potential sales in the hundreds of millions of dollars per year with an overall early cancer detection market in the billions.

"These huge markets require an IVD platform capable of processing large sample numbers, a significant installed base, as well as marketing and a sales force to reach GPs and local clinical diagnostic laboratories," says Achim Plum spokesperson for Epigenomics.

"Our business model for addressing these screening markets is based on partnering with global diagnostics players. In these partnerships we identify the biomarkers, develop the assays and demonstrate their clinical utility while our partners turn them into in vitro diagnostic test kits and commercialize them. By pursuing a nonexclusive licensing strategy, we strive for higher market shares of Epigenomics' products through access to the combined installed base of several partners in each geography. In this model, Epigenomics generates revenue and ultimately profits based on upfront, R&D, and milestone payments during product development and royalties on our partners' net sales once the products are being sold in the market. As peak sales estimates for individual products can reach up to 1 billion euros per annum, these products are the key value drivers of Epigenomics's product portfolio," Plum adds.

Epigenomics also plans to place assays into reference laboratories and thus make them available to patients and opinion leaders even before their launch as IVD test kits.

The company will target oncologists, pathologists and centralized laboratories, which it notes are characterized by high medical needs, premium pricing and high margins and which can be addressed with comparably small, specialized sales forces. It will offer the test assay through partners' centralized reference laboratories or through selling IVD test kits directly to customers or distributors.

Epigenomics expects the market launch of its prostate cancer molecular classification test and colorectal cancer biomarkers for surveillance and monitoring applications through centralized reference laboratories in 2008.

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