Medicine can still sometimes look awfully primitive, despite all the whiz-bang developments in biotech. Take rheumatoid arthritis. Scientists don’t know what causes it, and clinicians have little hard data to help them diagnose it or measure patients’ progress over time.
But that’s starting to change, based on a new molecular test from South San Francisco-based Crescendo Bioscience. The company, whose test has been commercially available since November 2010, is seeking to help doctors get truly quantitative in analyzing how patients are doing with this painful inflammatory disorder of the joints.
“When we went out to talk to doctors, they would say things like ‘somebody needs to take this field into the next century,'” says Crescendo CEO Bill Hagstrom. “We think there’s an incredible opportunity in autoimmune diseases. It’s one of the next great frontiers.”
With the new test, which has quietly started to take hold over the past year, Crescendo could shake up the treatment of rheumatoid arthritis, and the way drugs for this condition get developed. Crescendo doesn’t disclose its revenues, but since the first commercial version of its Vectra DA molecular test debuted at the American College of Rheumatology meeting, the company has raised $56 million, expanded its team to 80 employees, and negotiated a deal in which Myriad Genetics (NASDAQ: MYGN) got a three-year option to acquire the company at a pre-determined price if Crescendo hits certain sales goals.
The opportunity is big for anyone who can provide better information to help treat rheumatoid arthritis. This disease, in which the immune system goes haywire and starts attacking healthy joint tissue like an invading virus, affects an estimated 1.3 million people in the U.S. There has been a massive amount of innovation with molecular targeted therapies over the past decade, from companies like Amgen, Johnson & Johnson, Abbott Laboratories, and Roche. The market for these therapies—which can cost $20,000 a year for patients with a chronic, lifelong condition—topped $12.7 billion in 2010 and is on pace to reach $17.3 billion in 2015, according to Visiongain, a London-based market research firm. And while those drugs can be very effective at relieving pain and swelling and stopping progressive joint damage, they don’t work for everybody. Researchers today can’t predict who will respond, and can’t accurately track how much good the drugs are doing at the molecular level.
Crescendo is seeking to answer some of these hard questions. It was founded by Michael Centola of the Oklahoma Medical Research Foundation, and secured its Series A financing in 2007. The company has gotten this far on backing from Mohr Davidow Ventures, Kleiner Perkins Caufield & Byers, and Aeris Capital.
Diagnosing the disease and monitoring progress today is a bit tricky, and rheumatologists rely heavily on what’s known as the DAS28 score. Essentially, they go down a list of 28 joints in the hands, feet, knees, hips, shoulders, and try to assess pain and swelling in each joint. They come away with a measurable score, but it’s arrived at in a highly subjective way. Physicians can also look at things like C-reactive protein, a measure of inflammation in the blood, but DAS28 is still the workhorse measurement. It’s so subjective, Hagstrom says, that the analysis of a given patient can vary by 30 to 50 percent from one physician to the next.
Given how sloppy the measurements are, it shouldn’t be any surprise that patients don’t do nearly as well as they should, even when they stay compliant with their medications and see their doctors regularly. Tightly-controlled studies have shown that even though an estimated 50 to 60 percent of rheumatoid arthritis patients can be managed into a clinical remission, only about 10 to 20 percent of patients actually reach that goal, Hagstrom says.
Crescendo’s answer is to provide doctors with more information through its test, called Vectra DA. The test was developed after Crescendo reviewed hundreds of scientific studies of protein biomarkers that are thought to play a role in complex cascade of inflammation that characterizes rheumatoid arthritis. The company zeroed in on 12 proteins in particular that it says are statistically significant, and which it put into a proprietary algorithm.
Once that was developed, the business model is pretty straightforward—a physician takes a blood sample, sends it in to Crescendo’s central lab for analysis, and Crescendo ranks the patient’s disease severity on a scale of 1-to-100. Results generally get sent back within three to five days. The Vectra DA test is being reimbursed at between $300 and $700, Hagstrom says.
The test provides far more objective, hard data on disease activity than what can be gleaned from a clinical exam, Hagstrom says. The Vectra test results are said to vary by about 2.5 percent from test to test on the same patient, Hagstrom says, making it far more consistent than the clinical exams of today.
There are lots of different questions physicians would like to get answered with access to this data. For starters, there’s the matter of establishing baseline disease activity around an initial visit. That enables doctors to determine how much progress a patient is making a few months later, rather than just asking patients how much pain they are experiencing from one visit to the next. It also can help doctors tease apart the activity of rheumatoid arthritis from other painful conditions a patient may be experiencing at the same time, which are driven by different molecular actions, such as osteoarthritis and fibromyalgia. The test could also help doctors see whether they are getting the effectiveness they want to see from their prescribed treatment. Insurers might be particularly interested to find out, in a quantitative way, whether a patient is seeing much improvement after getting prescribing a pricey biologic therapy, or whether a cheap generic like methotrexate might work just as well to get the disease under control.
Over time, Crescendo hopes to be able to answer some important predictive questions with its test, such as whether a patient has RA that’s smoldering at a low level, or the kind that will worsen over a couple years and cause structural joint damage. Doctors also would like to be able to predict whether a patient is going to benefit or not on one of the molecular targeted therapies, rather than prescribe it and wait around for a couple months to see if it worked.
Crescendo won’t say how many customers have ordered its test, or name its prime users. But Jeffrey Curtis, a rheumatologist at the University of Alabama-Birmingham, offered an enthusiastic take on the new test in this video presentation posted on the company website.
Hagstrom, when we met briefly at the JP Morgan Healthcare Conference in San Francisco, wanted to talk more about future upside than the here and now. By focusing in tightly on the 3,500 rheumatologists in the U.S., he says, Crescendo envisions building long-term relationships that will open the door to all kinds of product extensions. These doctors struggle with many of the same challenges of measuring disease activity among patients they see with psoriatic arthritis, ankylosing spondylitis, and Sjogren’s syndrome—all of which are autoimmune diseases related to rheumatoid arthritis. Using Vectra’s technology to get a handle on each of those diseases will require more understanding of the protein biomarkers at play in each condition, and they’ll have to be crunched into different algorithms than the one that powers Vectra DA. “We’d like to be able to say to them, ‘our specialty is your specialty,” Hagstrom says.
As Crescendo gathers more and more information about the activity of autoimmune diseases, Hagstrom says it will be of interest not just to physicians, but also to drug developers. It’s possible that on one level Crescendo could be a threat, by determining who is unlikely to respond and thus shrinking the pool of patients for certain biologic medicines,. But that could be offset if drugmakers apply Crescendo’s test to experimental drugs, which might help Big Pharma companies improve their odds of running successful clinical trials, Hagstrom says. Crescendo recently finished one project for a drugmaker which said the Vectra test helped it see when their drug was working, and when some of the benefit was due to the placebo effect. That’s a valuable piece of information that can influence a company’s decision on whether to move on to the next expensive trial.
Crescendo still has a lot of ambitious tasks on its to-do list in 2012, such as increasing physician adoption, inking pharma partnerships, and persuading more insurers to pay for the Vectra DA test. But given how much money is wasted on drugs that fail in clinical trials or don’t work for certain patients, there’s bound to be interest in spending a few hundred dollars to get hard data that can help avoid all that waste and trouble.
“This is a field that’s deeply committed to getting deeper scientific insight, and clinical understanding,” Hagstrom says. “We think there’s an incredible opportunity in autoimmune diseases. It’s one of the next great frontiers.”
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