ViroLogic and ACLARA merge

SOUTH SAN FRANCISCO, Calif.—With the recent approvals of their respective stockholders, biotechnology companies ViroLogic and ACLARA Biosciences took a final step toward completing their merger, creating a personalized medicine firm focused on oncology and infectious diseases. According to ViroLogic chairman and CEO, William D. Young, who continues in those roles in the new company, three key reasons prompted the merger.

With expertise in developing therapeutic screens and diagnostic tests for different markets—ViroLogic in HIV and ACLARA in cancer—the combined firm will have significantly increased product and market prospects. As Young explains, "There are important parallels and similarities between the progression of HIV treatments and the likely evo-lution of cancer therapeutics. Increasingly, cancer patients will receive more combination therapies or drug cocktails, and doctors will use patient-specific diagnostic testing to help determine an individual's therapy regimen and manage their care."

Thus, the company intends to create new products that will allow it to tackle the "exploding" field of targeted therapeutics and molecular diagnostics, he adds. The merger will also allow ViroLogic to further extend its investments in building commercial laboratory capacity, developing extensive drug development collaborations, and creating a revenue stream with their patient testing and pharmaceutical businesses. Furthermore, Young believes that ACLARA's eTag platform technology will serve to expand ViroLogic's research capabilities to address cancer, infectious diseases, and inflammation disorders, as well as other serious diseases.

The merger should save the money as it consolidates operations to the South San Francisco location later this year.

Young sees the merged company benefiting from what George Poste, director of the Arizona BioDesign Institute, recently described as the developing role of theranostics and diagnostics in moving the pharmaceutical industry from a model of "drugs as products" to "medicine as policy".

"There is an important recognition that drug development and patient treatment needs better tools to make sure that each patient receives the medicine that will help them the most," he says. "We work with all the major pharmaceutical companies developing new HIV treatments specifically because they see the benefit of having testing that provides a clearer picture as to which patient may benefit from the new therapies."

The market seems to support his belief, as an ever-widening selection of pharmaceutical firms has opened diagnostic divisions that directly or indirectly support their drug discovery efforts. Likewise, a cottage industry has formed with dozens of biotechnology and platform specialists like Ciphergen realigning their business plans to target the diagnostics component of the drug discovery and healthcare markets.

"We believe that pharmaceutical and biotech companies are increasingly embracing the role of personalized medicine and en-hancing their targeted therapeutic programs," Young says. "The benefits of easily and economically identifying quality biomarker expression for new drug development are substantial. These benefits include more efficient clinical trials with a higher probability of successful completion and drugs that can be prescribed for particular patients based on the identification of markers in those patients that are predictive of responses to that drug."