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XDx, After a Long Slog in Molecular Diagnostics, Predicts First Profit in 2011

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after a heart transplant is performed whether the patient is rejecting the new organ or not. This seemed like a market ripe for disruption with a noninvasive blood test. The current standard, Cassigneul says, is a procedure in which the doctor slides a catheter through the patient’s jugular into the heart, pulling out a tiny biopsy sample. The doctor repeats this procedure weekly in the first months after transplant, when the risk of rejection is highest, then backs off to monthly or quarterly biopsies over time.

Heart transplants are a small market, with only about 2,100 procedures performed each year, and about 20,000 people living in the U.S. with transplanted hearts, Cassigneul says. But because immune rejection needs to be monitored chronically, and the average patient goes through 25 to 40 of these biopsy procedures over time, the potential market for a new test like XDx’s is thought to be about $100 million a year, Cassigneul says. Plus, the biopsy method needs to be read by a pathologist, and the results can be subjective, so the company figured there was room in the market for a precise molecular diagnostic. “We figured we ought to be able to provide something better,” Cassigneul says.

The XDx test, called AlloMap, measures the extent to which 20 genes are dialed on or off in a blood sample—what’s known as gene expression. The company’s proprietary algorithm is designed to enable doctors, with great 99 percent statistical confidence, to determine when a patient isn’t rejecting the new heart.

Tapping the market with this first-of-its-kind test has been a challenge of the sort that I can imagine business school case studies are made of. There are about 150 centers in the U.S. that perform heart transplants, so this is the kind of concentrated niche that a small company ought to be able to tackle with a sales force of about 10 people. But this is a relatively young medical specialty, and each place tends to do the surgery a bit differently, Cassigneul says.

Five years now after introducing its test, a bit more than 90 centers have used the company’s test at least once, and 38 of them have written it into their normal protocols for doing heart transplants, Cassigneul says.

Getting doctors to use this test, like many new things in medicine, is based on whether you can deliver convincing data that it’s worthwhile. XDx passed a key hurdle with … Next Page »

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