Riding a Cancer Diagnostics Wave, Genoptix Sees Boom Continuing in 2009
There are about 11,000 physicians in the U.S. whose job is to diagnose and treat people thought to have cancers of the blood. These specialty physicians need to sort through a dizzying number of lab tests to identify subtle differences in types and stages of leukemias, lymphomas, and myelomas. Get it exactly right, and it might cure the patient. Get it wrong, and it could be a disaster.
Most lab service companies specialize in running specific tests accurately and fast. They often get their orders one by one, and send back results that way, not in a comprehensive package for the hematologist/oncologists (known as heme-onks for short) who have to make the bottom line diagnosis. San Diego-based Genoptix (NASDAQ: GXDX) has seized upon this gap in the marketplace by bundling the tests a doctor needs to make such conclusions. Founder and CEO Tina Nova, a veteran biotech entrepreneur with experience at Hybritech, Ligand Pharmaceuticals, and Nanogen, filled me in on why her newest company has been so successful.
Something like 850,000 patients are living with blood malignancies of some kind in the U.S., and about 150,000 new cases are diagnosed each year. This typically involves a battery of expensive tests that are run by giant contract labs like Laboratory Corp of America, or Quest Diagnostics. Such tests require a small sample of a patient’s bone marrow to run analyses such as flow cytometry, which helps sort out malignant cells from healthy ones, and pathology tests, which examine cells under a microscope. More sophisticated analyses put cells in a lab dish and examine genes associated with malignancies.
Usually a combination of these tests will give the doctor an answer, like whether a patient has chronic myelogenous leukemia and is therefore a candidate for Novartis’ wonder drug imatinib (Gleevec) or whether he or she needs some other treatment altogether. Nova says Genoptix is the only company that runs all the tests in-house and puts together a report that offers a diagnosis under the direction of employees trained in hematology/oncology. As Nova put it, they speak the same language as the physician.
“No one else uses a model like ours,” Nova says. “We came to this because we learned that the diagnosis of leukemia and lymphoma was not well-served. The physicians told us that diagnosis is the biggest problem they are faced with.”
Diagnostics companies traditionally take a back seat to the more glamorous work of drug development, but Genoptix is clearly much better positioned heading into in the downturn than most traditional drug developers. Revenues were $59.3 million in 2007, which doubled to $116.2 million last year. Genoptix is profitable and expects to continue growing despite this year’s recession, with forecasted revenue this year of $170 million. Nova insists the company is just warming up, having captured just 6 percent … Next Page »