CombiMatrix Reinvents Itself From Lab Toolmaker to Cancer Diagnostics Player

6/17/09Follow @xconomy

CombiMatrix tried for years to sell sophisticated genetic analysis instruments to laboratories, and essentially got overrun by big competitors like Santa Clara, CA-based Affymetrix and San Diego-based Illumina. But the little Mukilteo, WA-based company is still around, and hoping to flank the big boys in an emerging market that could be more lucrative—diagnostics for earlier detection of cancer.

The company (NASDAQ: CBMX) has been selling DNA microarray equipment since 2004. These are scientific instruments, sometimes called gene chips, that can be used to look at a very large number of genes at the same time to see which ones are expressed, or dialed up or down, in a tissue sample.

CombiMatrix decided a little over two years ago to turn away from marketing to R&D labs, and toward offering a service to cancer physicians, says CombiMatrix CEO Amit Kumar. The plan is for doctors to send in tissue samples from patients with leukemia, prostate or breast cancers, and have CombiMatrix staff look for telltale genetic signs that provide a prognosis of how aggressive their disease may be. The information gets sent back to the doctor, giving him or her an idea of how aggressively the cancer needs to be treated, Kumar says.

It’s still early days in this field of genetic diagnostics, and it’s anybody’s guess whether this can help patients live better or longer lives, but so far about 300 patient samples per month—at $2,000 apiece—are getting tested, Kumar says. About 900 physicians from around the country have bought the CombiMatrix service, including ones from UCLA Medical Center, the University of Michigan, and Cedars-Sinai Medical Center in Los Angeles. It’s a sign of demand for more personalized treatment of cancer, Kumar says, which is diagnosed in 1.2 million people in the U.S. each year. Eventually, CombiMatrix hopes doctors will use its gene chips for an even bigger application, in which healthy people getting annual physicals will get their blood samples screened to spot early signs of five major forms of cancer, Kumar says.

This push into diagnostics is important to CombiMatrix partly because this is a market that Affymetrix and Illumina, which together control about 85 percent of the market for R&D use of microarrays, haven’t yet tapped, Kumar says. CombiMatrix, after capturing a little more than 1 percent of the R&D market, decided to move on to the greener pastures.

“We didn’t have the balance sheet to fight with them on price in the R&D market,” Kumar says. “But we have an advantage on diagnostics, and we’re establishing a beachhead before they turn their attention to the market.”

CombiMatrix will have to play its cards carefully … Next Page »

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