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 »

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Seattle-based Calistoga Pharmaceuticals said that its lead experimental drug, CAL-101, killed cancer cells in lab studies of multiple blood malignancies. The drug is designed to block a marker inside cells called the PI3 kinase pathway, that is thought to play a key role in tumor cell growth, survival, and migration. The findings were delivered in an oral presentation at the American Society of Hematology meeting in San Francisco.

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The American Society of Hematology (ASH) is one of those scientific meetings that usually flies below the radar of the wire services and big newspapers. Still, this year’s event in San Francisco has drawn more than 21,000 physicians, scientists, and intensely interested folks from biotech companies and Wall Street. They are all scouting new treatments for diseases of the blood, like leukemias, lymphomas, myelomas, and every clotting disorder you can shake a stick at.

If you don’t think this sounds like a big deal, check out the sales of anti-clotting drug clopidrogel (Plavix): $4.7 billion worldwide for Bristol-Myers Squibb and Sanofi-Aventis in 2007, even while they faced competition from cheaper generics. Then there’s old ASH standbys like Genentech and Biogen Idec’s rituximab (Rituxan) for non-Hodgkin’s lymphoma, which eclipsed $2 billion in U.S. sales last year and keeps growing.

So, I’ve been keeping an eye on the next big thing for the blood. Here are the newsiest stories we saw cross our biotechnology desk in our three-city network of Boston, San Diego, and Seattle:

Seattle Genetics

The Bothell, WA-based biotech company (NASDAQ: SGEN) caused a stir with its “empowered” antibody drug, which has the tumor-targeting ability of an antibody loaded with a potent toxin to give it extra tumor-killing kick. The drug, SGN-35, was able to completely wipe out aggressive forms of Hodgkin’s disease and related lymphomas with minimal side effects. In a study of 44 patients who were seriously ill and relapsed after a median of three prior rounds of chemotherapy, the Seattle Genetics drug caused tumors to completely disappear or mostly go away in more than one-third of patients (38 percent).

This data is promising enough that Seattle Genetics is preparing to go straight to pivotal studies for Hodgkin’s disease and anaplastic large cell lymphoma in early 2009, which could lead this drug to be FDA approved. Seattle Genetics CEO Clay Siegall said investigators at the ASH meeting are itching to participate in the pivotal studies. “There’s a lot of buzz here,” Siegall said during a break, when he called me yesterday. “The investigators are excited. We’ve never had this much excitement in the 10.5 year history of Seattle Genetics. The doctors really want to get involved in the trial.” He adds that there’s a backlog of patients who could enroll in the next studies, and he’s hopeful that they can be recruited to sign up quickly.

Millennium: The Takeda Oncology Company

Millennium Pharmaceuticals had a breakout performance at last year’s ASH. The Cambridge, MA-based biotech company, now the cancer division of Japan-based Takeda Pharmaceuticals, showed last year that bortezomib (Velcade) could cause complete remissions for 35 percent of patients with multiple myeloma on a combination treatment with its drug, compared with 5 percent who did that well on the combination alone. This year, it showed follow-up data from the trial, called Vista, that showed that early glimpse of promise is translating into an ability to help patients live longer.

Ligand Pharmaceuticals

This San Diego-based biotech company (NASDAQ: LGND) saw some positive data reported by its partner, GlaxoSmithKline. The drug giant reported … Next Page »

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