GLG News by Ken Powell

Implications: A non-invasive, DNA-based screening test for colon cancer could significantly increase the 90MM US adults over 50 that should participate in colorectal cancer screening.  Colon cancer is responsible for approximately 57,000 deaths in the US each year and account for 9% of all cancer deaths.  Due to the invasive nature of colonoscopy and the required preparatory procedures, adults over 50 often forego screening for this preventable cancer.

Analysis: GeneNews Ltd. has begun marketing of the company's ColonSentry blood-based test for colorectal cancer in the greater Toronto area.  This new, non-invasive test utilizes a RT-PCR to quantify a panel of seven genes to assess colorectal cancer risk.  If this test shows adequate sensitivity and specificity compared to colonoscopy and other colorectal screening procedures, it could produce a dramatic increase in patient compliance for adults over 50 that often forgo colorectal cancer screening due to the preparatory steps and invasive nature of colonoscopy.  The market for this blood-based molecular diagnostic test in the US could be substantial.

According to a recent report from Kalorama, the worldwide market for molecular diagnostics was $18 billion in 2006 and is forecasted to grow to over $92 billion in the next ten years.  The US is forecasted to account for approximately half of this revenue.  For detailed information on the colorectal market segment, competitors and the high growth molecular diagnostics market; please contact your GLG representative to schedule an individual consult.

Implications: Severe sepsis is a major cause of death in the US.  Annual mortality rates of over 215,000 patients exceed those for acute myocardial infarction and leading cancers.  A sensitive and specific marker could relieve the huge medical and financial burden created by the 750,000 cases of sepsis infections each year.  Currently, there is no prefered rapid diagnostic test that can diagnose, monitor and predict the prognosis of this often fatal medical condition.

Analysis: Sepsis is a deadly, costly and often fatal medical condition.  It is difficult to diagnose, because the symptoms mimic other disease states.  Currently, there are only 3 FDA approved sepsis tests.  These tests are used in conjunction with traditional culture methods and add extra cost.  Even so, no one test or marker has gained medical acceptance as the definitive way to rapidly and accurately test for sepsis.  A company that could introduce a new test methodology that could diagnose, monitor and/or predict the prognosis of this disease could enjoy substantial market share and revenues in this infectious disease market segment.

New test systems are now under development.  Companies such as SIRS-Lab (Germany) and Inverness Medical Innovations' (AMEX: IMA), recently acquired Biosite business, IQuum and others are working on sepsis solutions.  Given the annual 750,000 cases in the US, a rapid, sensitive and specific test costing $35-$50 would translate into a total potential market of $2.6-3.7 billion per year.  This would reduce the associated cost of sepsis to the healthcare system and payors by tens of billions annually.

To learn more about the significant sepsis diagnostics market, opportunity and companies mentioned above, please contact your GLG representative to schedule a consult today. 

Implications: BD GeneOhm's recent CE Mark for its molecular diagnostic test for the rapid diagnosis of Clostridium difficile infection will likely intensify the competition between BD and Cepheid.  Both companies market tests for the $1 billion dollar Methicillin-Resistant Staphylococcus Aureus (MRSA) market.

Analysis: BD (NYSE: BDX) just received the CE Mark for BD GeneOhm's molecular test for Clostridium difficile.  This will enable the company to sell the test in the European market and intensifies the competition between BD and Cepheid (NASDAQ: CPHD).

Both companies offer molecular based tests for Methicillin-Resistant Staphylococcus Aureus.  This is a global market that could easily exceed $1 billion annually as hospitals focus on reducing Hospital Acquired Infections (HAIs).

For detailed information on both companies, the fast growing molecular diagnostics and MRSA market segments, please schedule a consult with your GLG representative today. 

Implications: A new test form AspenBio could revolutionalize the diagnosis of appendicitis.  Over 6 million patients present to Emergency Departments each year with abdominal pain, resulting in approximately 700,000 appendectomies.  Over $5 billion is spent each year in the US on CT scans, the currently available diagnostic method for appendicitis. 

Analysis: AspenBio (NASDAQ: APPY) recently announced the initiation of a clinical study to demonstrate the performance of their blood-based test for appendicitis to support their 510 (k) FDA application.  Currently, there is no blood-based test that can rapidly and cost-effectively diagnose this life threatening medical condition.  Over 700,000 surgeries are performed each year and 100,000 are false positives.  1 in 5 cases are misdiagnosed, costing $10-12 billion each year.  If 40% of the patients were screened with this test, the market potential is over $500 million  AspenBio's rapid test could enable the company to build a new position in the $40 billion clinical diagnostics market.

For more information on AspenBio, their test for appendicitis and the $40 billion dollar clinical diagnostics market, please schedule a consult with your GLG representative today.

Implications: The House of Representatives repealed the Centers for Medicare and Medicaid Services (CMS) authority to conduct a competitive bidding demonstration program for laboratory services.  Senate action is now required.

Analysis: The repeal by the House of Representatives of the CMS competitive bidding demonstration program for laboratory services is good news for large, medium and small commercial reference labs.  Unfortunately, the Senate bill sponsored by Senator Max Baucus did not make it to a final vote.  Senator Baucus pledged to hold another vote after the 4th of July recess to end the current debate and pass the legislation.

Implications: The sale of Datascope's (NASDAQ: DSCP) patient monitoring business earlier this year to Mindray Medical (NYSE: MR) has resulted in several acquisition offers from unnamed companies.  On Wednesday, Datascope's stock increased 11% in response to this news.   

Analysis: Datascope's (NASDAQ: DSCP) patient monitoring business apparently limited its attractiveness as a potential acquisition target.  On Wednesday, June 5, Datascope revealed that it had received acquisition offers from unnamed companies and its stock increased 11%.  Reasons for this could include the patient monitoring market slow annual growth of 2-3%, limited market share of less than 10% and major competitors such as GE (NYSE: GE) and other market leaders in this medical equipment segment.

Datascope sold its patient monitoring business this year to Mindray Medical (NYSE: MR), which will gain certain advantages and face corresponding challenges with the acquisition of this business from Datascope.

For more information on the above mentioned subject, please contact your GLG representative to schedule a consult today.

Implications: Mindray Medical International (NYSE: MR) has completed its acquisition of Datascope Corporation's (NASDAQ: DSCP) patient monitoring business for $209MM (US).  This acquisition brings both opportunities and challenges for one of the fastest growing global healthcare companies in China. 

Analysis: Mindray Medical International (NYSE: MR) recent acquisition of Datascope Corporation's (NASDAQ: DSCP) patient monitoring business enables Mindray to enter the US healthcare market, which is the single largest in the world.  Datascope had 2007 patient monitoring sales of $161MM (US), when added to Mindray's annual sales makes patient monitoring Mindray's largest business segment.

The acquisition has several obvious benefits for Mindray.  These include an existing US customer base, Datascope brand name recognition and Datascope's patient monitoring market share of approximately 9%.  In addition, current Datascope sales, marketing and service resources are expected to remain in place.  It also provides cross selling opportunities for Mindray's current patient monitoring products, the ability to better understand customer needs and develop future innovations in this area.

The acquisition is not without challenges.  The US patient monitoring market is highly saturated and has low, single digit projected growth rates.  Key competitors are global integrated healthcare companies with leading edge products and large established market shares.  Integration issues such as retention of Datascope personnel, projected synergy benefits of $30MM and management focus requirements on this business segment remain.

For detailed information on this topic, strategic implications and Mindray's laboratory diagnostics business, please contact your GLG representative today to schedule and individual consult.

Implications: Siemans Healthcare (NYSE: SI) recent alliance with Laboratory Corporation of America Holdings (NYSE: LH) to develop and distribute new clinical diagnostic tests will help accelerate the transition of novel assays, particularly molecular dianostics, from the research setting into mainstream clinical diagnostic use.

Analysis: The recent formation of a co-development alliance between Siemens Healthcare (NYSE: SI) and Laboratory Corporation of America Holdings (NYSE: LH) will help drive the transition of new clinical diagnostic tests from the research segment into mainstream clinical diagnostic use.  This potentially powerful strategic alliance brings together Siemens in-depth diagnostics capabilities with Labcorp's extensive lab services distribution pipeline to over 220,000 US customers.  Siemens acquired several leading diagnostic companies including Bayer Diagnostics, Diagnostic Products Corporation and Dade Behring Holdings, giving it proven assay development expertise.  Labcorp is known for its leading position in introducing new diagnostic tests to physician offices and providing reference lab services to hospitals and other healthcare delivery networks.

The alliance will focus its efforts on areas offering the highest patient value such as personalized medicine, cancer, metabolic syndrome and diabetes.  There is a constant stream of news media attention surrounding personalized medicine, which uses molecular diagnostics to assess a patient's response to selected therapies.  According to a report from a leading market research company, the worldwide market for molecular diagnostics was estimated at $18 billion in 2006 and is expected to reach $92 billion in 2016.  The US account for half of this market with an annual growth rate of over 40%.

Detailed information on clinical and molecular diagnostics market segments including companies, growth rates and competitive advantages are available through a consult.  Please contact your GLG representative and schedule one today.

Implications: A new study published in the Journal of the American Medical Association estimated a lower risk of developing breast cancer by the age of 70 in women carrying mutations in one of two genes (BRAC1 and BRAC2).  This comes at the same time as Myriad Genetics (MYGN(NMS:MYGN)) is marketing their BRAC1/BRAC2 test.  Breast cancer is responsible for approximately 42,000 deaths in the US each year, second only to colon cancer.

Analysis: The Journal of the American Medical Association study estimates a 40-51% chance of developing breast cancer by age 70 for women having mutations to BRAC1/BRAC2 genes.  This is lower than previous estimates of 50-80%.  According to the study author, about 1/2 of 1%, or 750,000 women in the US carry the risky genes.Companies such as Myriad Genetics (MYGN(NMS:MYGN)), Genomic Health (GHDX(NMS:GHDX)) and Agendia offer tests for breast cancer.  Costs for these molecular diagnostics tests can be as high as $3,000.  The molecular diagnostics market is the fastest growing clinical diagnostics market segment.Detailed information on molecular diagnostics markets, companies, and developments are available.

Implications: Quest Diagnostics (NYSE: DGX) and Epigenomics (Frankfurt Prime Standard: ECX) have entered into a non-exclusive agreement for Quest to use Epigenomics' Septin 9 DNA metylation biomarker for colorectal cancer.  Because this molecular test requires just a simple blood sample, it could result in a significant increase in patient compliance with the American Cancer Society (ACS) recommended guidelines for colorectal cancer screening.

Analysis: Colon cancer is responsible for approximately 57,000 deaths in the US each year and account for 9% of all cancer deaths.  Due to the invasive nature of colonoscopy, required preparatory procedures and the unpleasant nature of stool sample handling for fecal occult blood testing, the 90 MM adults over 50 often forego screening for this preventable cancer.

The recently announced agreement between Quest Diagnostics (NYSE: DGX) and Epigenomics (Frankfurt Prime Standard: ECX) could dramatically increase the number of patients that should be screened for colorectal cancer.  This new molecular test detects a blood-based biomarker for colorectal cancer in its early, treatable stages.  The single most important advantage of this test is the convenience of blood sampling, which should be welcomed by patients as opposed to colonoscopy or fecal occult blood testing.  Colonoscopy requires diet and bowel preparation and missed work for the procedure.  It also requires someone to drive the patient to and from the site due to the sedation used in conventional colonoscopy.  Quest, along with other major commercial reference labs such as Labcorp (NYSE: LH) and Bio-Reference Labs (NASDAQ: BRLI) offer fecal occult blood tests.  However, these require stool sample collection and processing by the patient, which they find very unpleasant.  Blood samples can be easily and conveniently obtained in various collection sites such as a physician office, commercial reference draw stations and outpatient clinics.  The new test should be welcomed by those screening for colorectal cancer worldwide.

Depending on the sensitivity and specificity of this new test, it could be highly competitive with current colorectal cancer screening tests.  These include not only colonoscopy, but Fecal Occult Blood Tests (FOBT), Fecal Immunochemical Test (FIT) and EXACT Science's NASDAQ: EXAS) test, PreGen-Plus stool-based DNA test.

Quest will pay Epigenomics royalties based on sales of the test.  The specific terms and conditions were not disclosed.

According to a recent report from a leading healthcare market research group, the worldwide market for molecular diagnostics was $18 billion in 2006 and is forecasted to grow to over $92 billion in the next ten years.  The US is forecasted to account for approximately half of this revenue.  For detailed information on the companies mentioned above, the commercial reference lab segment and the high growth molecular diagnostics market; please contact your GLG representative to schedule an individual consult.

Implications: Annual ultrasound, coupled with a CA 125 blood test does not reliably detect ovarian cancer early, at a more curable stage.  A recent study published in the International Journal of Obstetrics and Gynecology highlights the opportunity for an objective, molecular diagnostics ovarian cancer test that can identify this deadly cancer at an early stage.

Analysis: Among women in the United States, ovarian cancer is the eighth most common cancer and the fifth leading cause of cancer death, after lung and bronchus, breast, colorectal, and pancreatic cancers.  Ovarian cancer causes more deaths than any other cancer of the female reproductive system.  Because it is usually not diagnosed until advanced stages, ovarian cancer has become known as the "silent killer."  Approximately $2.2 billion (in 2004 dollars) is spent each year on the treatment of ovarian cancer in the US each year.

Companies such as Abbott (NYSE: ABT) offer tests for CA 125.  Newer tests are under development by companies such as GeoPharma (NASDAQ: GORX) and researchers at Yale.

According to a recent report from a leading healthcare market research group, the worldwide market for molecular diagnostics was $18 billion in 2006 and is forecasted to grow to over $92 billion in the next ten years.  The US is forecasted to account for approximately half of this revenue.  For detailed information on the companies mentioned above and the high growth molecular diagnostics market; please contact your GLG representative to schedule an individual consult.

Implications: Methicillin resistant staph aureous (MRSA) is responsible for approximately 19,000 deaths per year in the US.  Bio-Rad (AMEX: BIO) recently announced the introduction of its MRSASelect(tm) to identify methicillin resistant staph aureous (MRSA).  MRSA is an infectious bacteria resistant to conventional antibiotic therapies and  according to leading experts, costs US hospitals on average of $35,000 per incidence.

Analysis: Methicillin resistant staph aureous (MRSA) is an infectious bacterial strain that is resistant to conventional antibiotic therapies. It has been reported to cause 94,000 hopitalized infections and approximately 19,000 deaths in the U.S. in 2005.  Most of these infections are acquired while the patient was in the hospital. Several states, including Illinois, Pennsylvania, and New Jersey, are beginning to mandate screening for MRSA in hospitals and more states have enacted MRSA surveillance programs.

Bio-Rad (AMEX: BIO) recently announced the introduction of a new MRSASelect test.   MRSA bacteria are grown on color-based media in the laboratory and can be differentiated from other microorganisms. One major advantage of the MRSASelect test over conventional, older MRSA detection technologies is that results are available within 24 hours.

Other companies such as BD (NYSE: BDX) and Cepheid (NASDAQ: CHPD) offer rapid, automated molecular diagnostic assays to detect MRSA.

Detailed information on the $1 billion dollar plus MRSA market, growth rates and competitors are available.  Please contact your Gerson Lehrman Group representative to schedule an individual consult.

Implications: Recent news announcing that a team of cancer researchers at Manhattan-based St. Vincent’s Comprehensive Cancer Center, in partnership with the Broad Institute of MIT and the Dana Farber Cancer Institute in Boston, have identified 30 red cell-related genes which determine the effectiveness of using the drug Revlimid® (lenalidomide) on patients with pre-leukemia, known as Myelodysplastic Syndrome (MDS) demonstrates the expansion of personalized medicine.  A commercialized personalized medicine example is Dako's HER2/nu test that is used to identify breast cancer patients that respond to Genentech's (NYSE: DNA) Herceptin, which did $1.3 billion in 2007 sales. 

Analysis:  Personalized medicine relies on sophisticated, "companion" molecular diagnostic tests to help clinicians develop therapeutic strategies and determine which patients are likely to respond favorably to a specific drug.  There are several companion diagnostic tests such as Dako's HercepTest used to determine Herceptin therapy, it's c-Kit pharmDx™ test as an aid in identifying GIST positive patients eligible for treatment with Gleevec/Glivec™ therapy and lab tests for breast cancer from Myriad Genetics (NASDAQ: MYGN), Genomic Health (NASDAQ: GHDX), Mammaprint and others.Molecular diagnostics is the gateway to the evolution and expansion of personalized medicine.  It offers a high growth/high margin opportunity for both molecular diagnostics test kit manufacturers and reference labs alike.  According to a recent report from a leading healthcare market research group, the worldwide market for molecular diagnostics was $18 billion in 2006 and is forecasted to grow to over $92 billion in the next ten years.  The US is forecasted to account for approximately half of this revenue.  For detailed information on the companies mentioned above and the high growth molecular diagnostics market; please contact your GLG representative to schedule an individual consult. 

Implications: Influenza and respiratory syncytial viruses (RSV) result in a significant number of hospitalizations and deaths.  According to the CDC, influenza alone causes over 200,000 hospitalizations and 36,000 deaths annually.  Quick diagnosis and proper treatment can lead to shorter hospital stays and lower costs.  The FDA recently approved two new molecular respiratory tests.  Since there are significant differences between the two companies' multiplex panels, one may have a competitive advantage and enable it to build a leadership position in the RSV market segment.

Analysis: The FDA recently approved two new respiratory multiplex panels.  This January ProFlu+ (Prodesse, Inc., Milwaukee, WI) and xTAG (Luminex Molecular Diagnostics, Toronto, CAN) were cleared to market their respective tests.  The Luminex and Prodesse tests take different approaches to in terms of menu, turnaround time, technologist involvement and technology.  As an example, ProFlu+ is a closed tube system, as opposed to Luminex's open tube format.  An open tube format lends itself to contamination and user safety issues.  In addition to the differences between Luminex and Prodesse panels, more companies are preparing to enter the respiratory virus market.

As with other molecular diagnostic tests, there is a substantial improvement in selling prices and margins compared to conventional immunoassay and other esoteric reference lab tests..  A Kansas City lab offers the xTAG panel to its customers for $396/test.

Influenza and respiratory syncytial viruses (RSV) result in a significant number of hospitalizations and deaths.  According to the CDC, influenza alone causes over 200,000 hospitalizations and 36,000 deaths annually.  Quick diagnosis and proper treatment can lead to shorter hospital stays and lower costs for both hospitals and third party payors alike.

According to a recent report from a leading healthcare market research group, the worldwide market for molecular diagnostics was $18 billion in 2006 and is forecasted to grow to over $92 billion in the next ten years.  The US is forecasted to account for approximately half of this revenue.  For detailed information on the companies mentioned above, competitive advantages and the high growth molecular diagnostics market; please contact your GLG representative to schedule an individual consult.

Implications: Recent advances in molecular diagnostics and genomics may give new life to previously shelved drugs that were unable to successfully complete the development process.  So-called "personalized medicine" stratgies use molecular diagnostic lab tests to identify patient populations that have favorable drug responses based on their genetic makeup.  Pharma companies may be able to mine their existing library of compounds and earn new and potentially significant revenue.  Molecular diagnostic companies that provide the gateway tests will reap the benefits of this research.

Analysis: Advances in molecular diagnostics may enable pharma companies to mine their existing library of compounds, giving new life to previously unsuccessful drugs.  So-called "personalized medicine" strategies use molecular diagnostic lab tests to identify patient populations that should have favorable drug responses, based on their particular genetic makeup.  A successful example of this strategy is Dako's HercepTest HER2/nu test that is used to identify breast cancer patients that respond to Genentech's (NYSE: DNA) Herceptin.  Herceptin produced $1.3 billion in 2007 sales for Genentech.  Salvaging drugs are important, given the considerable development costs required to bring a drug through development, which can be over $100MM for late stage clinical trials.

Molecular diagnostics is predicted to also play a major role in the approval of new drugs.  Rather than conduct clinical trials on populations selected by conventional parameters, pharma companies will use molecular diagnostics to selectively identify clinical trial patient populations that should demonstrate higher safety and efficacy.  This should in turn lead to faster time to market and subsequently earlier and higher revenues.

Molecular diagnostic companies hold the key to the future for personalized medicine and stand to earn significant profits from both the development and treatment sides of pharmaceutical drugs.  In addition to Dako's HercepTest, new genetic testing services from companies such as Myriad Genetics (NASDAQ: MYGN), Labcorp (NYSE:LH) and others are creating new, high growth/high margin opportunities.  In addition, there could also be a substantial new market to provide genetic testing on an OTC basis as more and more consumers seek to take control of their healthcare.  Some diagnostic companies have already begun Direct to Consumer (DTC) advertising.

According to a recent report from a leading healthcare market research group, the worldwide market for molecular diagnostics was $18 billion in 2006 and is forecasted to grow to over $92 billion in the next ten years.  The US is forecasted to account for approximately half of this revenue.  For detailed information on the companies mentioned above and the high growth molecular diagnostics market; please contact your GLG representative to schedule an individual consult. 

Implications: The current self-diagnostic market segment is approximately $7 billion and set to rapidly expand.  An attractive area of OTC diagnostics is Direct to Consumer (DTC) testing where the consumer initiates the testing process and obtains laboratory results without the need for a physician.  There are no federal regulations to prevent the growing trend of consumers performing and ordering a variety of diagnostic tests.  Within the DTC segment, genetic tests for existing medical conditions and disease predisposition could be a highly profitable, new growth area for molecular diagnostic and reference lab companies.

Analysis: Over the Counter (OTC) diagnostics have been available since the sale of the first thermometers, weight scales, blood pressure cuffs and other devices.  From 1978-1982, the number of records in the FDA's In Vitro Diagnostics (IVD) OTC database was 30.  That number rapidly grew to over 568 by the 2003-2007 periods.  OTC diagnostics familiar to most are those for glucose monitoring by diabetics, pregnancy, drugs of abuse, cholesterol and anticoagulation therapy.  Some of the reasons driving this growth are:

1.  OTC diagnostic tests are consumer friendly, reliable and give accurate, quality results.

2.  More and more consumers are taking control of their own healthcare, most notably baby boomers using the internet.

3.  The breath of test menu available through Direct to Consumer (DTC) testing has the potential to be the same as the menu available to physicians.  The DTC model is when the consumer initiates the testing process with a reference lab such as Quest ((NYSE: DGX), Labcorp (NYSE: LH), sends in a sample and obtains a result without physician involvement.

4.  There are no current federal regulations to prevent the growing trend of consumers performing and ordering a variety of diagnostic tests.  25 states plus the District of Columbia allow DTC, 10 states have limitations and only 13 do not permit it.

One particular DTC area that represents a significant opportunity for molecular diagnostic test manufacturers such as Qiagen (Nasdaq: QGEN), Gen-Probe (Nasdaq: GPRO), BD (NYSE: BD) and reference testing labs such as Myriad Genetics (Nasdaq: MYGN), Genomic Health (Nasdaq: GHDX) along with Quest and Labcorp is genetic testing.  Test manufacturers and reference testing labs enjoy significantly higher selling prices and margins compared to routine and even most esoteric lab tests.  For example, Myriad's BRAC1/BRAC2 hereditary breast test costs approximately $3,100.  A 250 biomarker panel from Biophysical Corp is available for $3,400 and complete genomes can be mapped for several hundred thousands of dollars.

As more and more point-of-care tests are developed for the professional market, molecular diagnostics drives personalized medicine, and the consumer grabs the healthcare steering wheel, OTC diagnostics are poised for rapid growth.  

According to a recent report from a leading healthcare market research group, the worldwide market for molecular diagnostics was $18 billion in 2006 and is forecasted to grow to over $92 billion in the next ten years.  The US is forecasted to account for approximately half of this revenue.  For detailed information on the markets companies and trends described above, please contact your GLG representative to schedule an individual consult.

Implications: EXACT Science's (NADAQ: EXAS) non-invasive, DNA-based screening test for colon cancer could significantly increase the 90MM US adults over 50 that should participate in colorectal cancer screening.  Colon cancer is responsible for approximately 57,000 deaths in the US each year and account for 9% of all cancer deaths.  Due to the invasive nature of colonoscopy and the required preparatory procedures, adults over 50 often forego screening for this preventable cancer. EXACT Sciences has retained the investment firm of Leerink Swann LLC to evaluate strategic business alternatives including its sale or merger with another entity.

Analysis:  EXACT Science's (NADAQ: EXAS) non-invasive, DNA-based screening test for colon cancer could significantly increase the 90MM US adults over 50 that should participate in colorectal cancer screening.  Colon cancer is responsible for approximately 57,000 deaths in the US each year and account for 9% of all cancer deaths.  Due to the invasive nature of colonoscopy and the required preparatory procedures, adults over 50 often forego screening for this preventable cancer.

EXACT Sciences has developed a patented, molecular diagnostics method to screen stool samples for colorectal cancer markers.  In addition to the non-invasive nature of this DNA-based test, it has the potential to identify "flat lesions", which may be missed by conventional colonoscopy.  EXACT Science's test, PreGen-Plus, is marketed under an exclusive agreement with Labcorp (NYSE: LH).  The American Cancer Society (ACS) recently included EXACT Science's test in its updated guidelines for colorectal cancer screening.

EXACT Sciences has retained the investment firm of Leerink Swann LLC to evaluate strategic business alternatives including its sale or merger with another entity.  Given the large US population (90MM) that should be routinely screened for colorectal cancer and EXACT Sciences assay advantages, the company could present an interesting opportunity for the right clinical diagnostics company.

Other companies such as GeneNews (TSX: GEN) are also developing biomarker tests for the early detection of colorectal cancer.  This company's blood-based test would eliminate the longstanding problem of stool sample collection and could drive patient screening compliance.

According to a recent report from Kalorama, the worldwide market for molecular diagnostics was $18 billion in 2006 and is forecasted to grow to over $92 billion in the next ten years.  The US is forecasted to account for approximately half of this revenue.  For detailed information on the companies mentioned above and the high growth molecular diagnostics market; please contact your GLG representative to schedule an individual consult.

Implications: The healthcare industry continues to lead the market.  Year to date through Feb. 14, the S&P Health Care Equipment index slipped 0.5% vs. an 8% decline for the S&P 1500. During 2007, the healthcare index gained 10.4% to the broader market's climb of 3.6%.  According to S&P, the environment for mergers and acquisitions will remain active, which should support stock valuations and create more powerful global competitors. 

Analysis: Healthcare is one of the USA's largest industry sectors and accounted for over 16% of 2007 GDP.  Clinical diagnostics is the gateway to the delivery of healthcare.  Diagnostics is a $34 billion global business, highly fragmented, technology driven and open for consolidation.  Molecular diagnostics and point-of-care are the fastest growing segments.  According to a report from Kalorama, the worldwide market for molecular diagnostics was estimated at $18 billion in 2006 and is expected to reach $92 billion in 2016.  The US account for half of this market with an annual growth rate of over 40%.

Detailed information on clinical and molecular diagnostics including companies, growth rates and competitive advantages are available through a consult.  Please contact your GLG representative and schedule one today.

Implications: Nanogen's (Nasdaq: NGEN) two new US patents; No. 7,319,022 titled “Amplification Methods” and No. 7,297,495 titled “Hybridization-Triggered Fluorescent Detection Of Nucleic Acids” extend their portfolio of over 40 real-time PCR patents.  These patents play an important role in Nanogen's emerging position as a leading molecular diagnostics company.

Analysis: Nanogen (Nasdaq: NGEN), announced that the US patent office has granted the company two new patents.  With over 40 US patents in the field of molecular diagnostics, these new patents build the companies patent portfolio in the fasted growing segment of the $32 billion worldwide clinical diagnostics industry.

The Amplification Method invention describes the use of overlap primer/probe designs and specifically differentiates Nanogen primer and probe designs from conventional PCR techniques since the probe overlaps with a portion of the primer sequences.  The overlap design allows the utilization of short, more conserved, primer and probe sequences which generate shorter amplicons and results in a more efficient PCR amplification reaction.  “This patent is a key element of our real-time PCR product offering” stated Graham Lidgard, SVP of Research and Development for Nanogen.  “The overlap design is an integral design element of the Company’s MGB Alert® products that significantly differentiates these real-time PCR products in the market and adds performance and value for customers.”

The second patent relates to the invention of a new fluorescent dye, cyanine dye, which simplifies PCR probe design requirements by eliminating the need for fluorescent quenchers.  In classical real-time PCR, probes need a quencher molecule to keep the fluor from emitting signal in the non-hybridized state.  This new cyanine dye, when used with the Company’s MGB moiety, does not fluoresce when not hybridized, but it does fluoresce when hybridized to the target.  This opens up new PCR probe design opportunities for the Company to use in its products or license to partners.

According to a recent report from Kalorama, the worldwide market for molecular diagnostics was $18 billion in 2006 and is forecasted to grow to over $92 billion in the next ten years.  The US is forecasted to account for approximately half of this revenue.

For detailed information on the high growth molecular diagnostics market, please contact your GLG representative to schedule an individual consult.

Implications: The early diagnosis of ovarian cancer is difficult and the disease is often not detected until it has reached an advanced stage.  A test that can diagnose Stage I/Stage II ovarian cancer could reduce the over 15,000 women that die from this form of cancer in the US each year.  Stage I and State II five year survival rates for ovarian cancer are 90%.  However, Stage III and Stage IV five year survival rates are only 20%.  Researchers at Yale, GeoParma, Inc (Nasdaq: GORX) and others are working to develop new, molecular diagnostic assays.

Analysis: Early diagnosis and treatment of ovarian cancer is often difficult and the disease is not diagnosed until advanced stages, which are often untreatable.  In the US, approximately 15,000 women die from ovarian cancer each year.  This number is more than the 12,800 deaths that occur due to cervical cancer and ovarian cancer is three times more lethal than breast cancer.  It has earned it the unfortunate name of the "silent killer."  A study by Dr. Emma R. Woodward from Birmingham Women's Hospital in the UK found that conventional screening of women with CA125 and transvaginal ultrasound did not reliably detect ovarian cancer at an early stage.

New diagnostic tests that can detect this deadly form of cancer are now under development by several public and private entities.  GeoPharma (Nasdaq: GORX) recently signed an agreement with the University of South Florida Research Foundation to acquire patent rights for a diagnostic technology using urine samples.  Researchers at Yale University School of Medicine, George Washington University and the Nevada Cancer Institute are using molecular diagnostics for a six marker, serum-based test. 

The molecular diagnostics market segment is the fastest growing area of the in vitro diagnostics industry.  According to a report by Kalorama, the worldwide market for molecular diagnostics was $17.9 billion in 2006.  By 2016 the market will exceed $92 billion with an average growth rate of over 40%.  The US is expected to account for approximately half of the total worldwide revenues with over $46 billion.

Detailed information on ovarian cancer, molecular and clinical diagnostics markets and segments are available through a consult.  Please contact your GLG representative to schedule one today.