• by bcarlson@marketresearch.com
  • December 30 2014

Opportunity in Prenatal Segment For Emerging Test Products

Opportunity in Prenatal Segment For Emerging Test Products

Kalorama Information has reported extensively on prenatal testing markets for more than a decade, but the recently there’s been an increase in opportunity, as  revealed in our latest study of  Women’s Health Diagnostics Markets.   Family planning and coordination of care for a child born with health conditions are increasingly relevant issues for the in vitro diagnostics (IVD) community that is increasingly involved in the prenatal testing market. While ethical considerations will arise with further market development, prenatal, postnatal and maternal testing are viable, promising cytogenetic screening methods that have seen ready acceptance from many insurers in at-risk populations where the prevalence of genetic disorders (especially chromosomal) justify coverage. Prenatal cytogenetic testing represents an important source of clinical market growth for technologies such as sequencing, microarrays, biomarker immmunoassays and mass spectrometry.

The traditional market leader in neonatal, prenatal and maternal screening, PerkinElmer, has followed a course of business development for its Genetics/Genetic Screening business unit consistent with overall market development and the diversification of associated diagnostic technologies. The company’s core offering is a series of assays able to be run on DELFIA immunoanalyzers able to detect biomarkers associated with aneuploidy risk (abnormal number of chromosomes associated with Down syndrome and other disorders) and even pre-eclampsia risk (maternal condition). The DELFIA Xpress, introduced in 2003, has seen placements in over 50 countries worldwide and helped fuel tremendous growth in PerkinElmer’s Genetic Screening unit. The PerkinElmer business unit saw overall revenue grow from roughly $100 million in 2003 to $300 million in 2008 as DELFIA Xpress revenue grew by a CAGR of over 100% over the same period.

While a broadly applicable, low-demand solution for global prenatal testing markets, the DELFIA Xpress and similar biomarker-reliant platforms have run against mounting competition from more sensitive and flexible testing options in molecular diagnostics and laboratory analytical instrumentation. PerkinElmer made early investments in the interest of diversifying its position in prenatal and neonatal testing:

•    April 2006 - Acquisition of Spectral Genomics; the company’s proprietary microarray comparative genome hybridization (CGH) technology offers an automated, analytics-supported alternative to traditional karyotyping with ready cytogenetic applications in neonatal and prenatal screening for chromosomal abnormalities such as deletions and amplifications
•    July 2006 - Acquisition of NTD Laboratories; the laboratory testing company provides a Down Syndrome risk testing service able to utilize maternal blood samples (mass spectrometry) and in vivo fetus ultrasound 
•     February 2008 - Acquisition of Pediatrix Medical Group; the laboratory company performs tandem mass spectrometry analysis of neonatal blood samples to detect a wide variety of metabolic disorders
•    May 2010 - Acquisition of Signature Genomic Laboratories; the laboratory company performs CGH testing services for prenatal, neonatal and postnatal confirmation of developmental disorders and disorder risk and previously served as a technology provider to Roche NimbleGen for microarray chips; the company differentiated between prior acquisition Spectral’s technology assets and Signature’s bolt-on testing services model and research and development capabilities
•    May 2010 - Launch of prenatal BACs-on-Beads (BoBs) or molecular diagnostics product using Luminex technology; the molecular karyotyping procedure uses bacterial-derived DNA probes to detect copy number changes and other genomic abnormalities

Even PerkinElmer’s series of moves within the prenatal testing market were unable to keep pace with the market’s rapid pace of development. The parent company closed Signature Genomics’ laboratory in 2014 due to an unfavorable reimbursement environment and loss of share across from non-invasive prenatal testing (NIPT) procedures and technologies. PerkinElmer was able to move into NIPT through a partnership with Verinata Health, Inc. Under the agreement, PerkinElmer will serve as Verinata’s exclusive sales and marketing partner in the United States for the Verinata verifi NIPT service. Verinata’s NIPT service is completed at the reference lab using a maternal blood sample and massively parallel shotgun sequencing (MPSS). The verifi test service and other molecular NIPT services are alternatives to traditional karyotyping (performed using amniotic fluid or placental samples) and serum prenatal testing. NIPT services such as Verinata use what are referred to as cell-free DNA (cfDNA) samples, typically from a maternal blood draw.

Verinata is at the epicenter of a rapidly growing NIPT service market also inhabited by competitors Sequenom and Ariosa Diagnostics. In January 2013, Verinata was acquired by Illumina for $450 million. Illumina also serves as the supplier to Sequenom for sequencing reagents, consumables, and equipment. Sequenom has seen revenue from its laboratory developed tests (LDTs), led by its MaterniT21 NIPT service, increase from $8.3 million to $46.5 million between 2011 and 2012; $46.5 million and $119.6 million between 2012 and 2013; and $86.9 million and $114.78 on a year-to-date (YTD) basis for the first three quarters of 2013 and 2014. Service-related revenue for Illumina also have grown rapidly (50%+) in the business quarters of 2013 and 2014 proceeding its acquisition of Verinata.

Sequenom has also cultivated a lucrative relationship with array-based NIPT service provider CombiMatrix. The Irvine, CA-based laboratory is a provider of genome-wide prenatal testing services that serve as a complement for the aneuploidy screening sequencing service offered by Sequenom. Prenatal microarray testing serves a reflex testing service to Sequenom’s NGS procedure and has seen similarly robust adoption rates. CombiMatrix revenue from prenatal microarray procedures grew by more than 120% in 2013 and more than 40% year-to-date through the first half of 2014.

The experience of CombiMatrix and the repreated validation of microarrays for application in prenatal testing represent a crucial growth market for the microarray industry. Agilent, for instance, has been able to relatively stabilize its array sales through its leading position in postnatal testing. Losing significant business in gene expression research to the competitive application of next-generation sequencing (NGS), Affymetrix has also identified post- and prenatal testing as a source for future growth in its microarray business.
Critically, the reimbursement situation for NGS- and microarray-based prenatal testing has been supportive for the emerging market. In contrast to PerkinElmer’s outlook, CombiMatrix has seen a “dynamic and fluid” reimbursement environment with the American Congress of Obstetricians and Gynecologists (ACOG) recommendation for prenatal microarray testing in the case of abnormal ultrasounds. Another study in the New England Journal of Medicine (NEJM) found that prenatal microarray testing provides more clinical significant findings than traditional karyotyping. Many national insurers in the United States already reimburse sequencing-based NIPT for aneuploidies in at-risk mothers. In the space of clinical sequencing and advanced molecular diagnostics, the uptake of NIPT reimbursement has been characterized as “unprecedented”.

Already adopting clinical immunoassay, mass spectrometry and sequencing technology, the prenatal and postnatal testing space is expected to support a new application market for microarrays. The most notable commercial development aside from the CombiMatrix-Sequenom partnership in prenatal microarray testing has been the collaboration of Affymetrix with Ariosa Diagnostics. In the course of studying platforms for its prenatal assay, Ariosa found that microarrays could outperform NGS in its laboratory in a number of ways: faster turnaround time (7.5 hours versus 56 hours), greater accuracy, and greater efficiency by reducing the number of patient samples need for an economical run. Affymetrix and Ariosa signed a multi-year supply agreement in October 2014 for array equipment and consumables as the two partners seek to streamline Affymetrix’s array testing systems into a specialized prenatal array testing solution. The December 2014 acquisition of Ariosa Diagnostics by Roche is reportedly not going to stall collaboration with Affymetrix, though Roche is more invested in NGS and desires to commercialize Ariosa’s Harmony NIPT on a sequencing platform.

The technologies discussed above - immunoassay, mass spectrometry, sequencing, microarray - are found with traditional karyotyping and in situ hybridization in a multi-billion prenatal cytogenetics testing market. Companies offering sequencing- and array-based NIPT services estimate the current addressable market at over $1 billion. Remaining market development will include insurers’ assessment of the risk threshold for expectant mothers that will permit reimbursement for various NIPT services (basic screening, wider genomic screening, reflex testing, confirmation). Some labs’ tests, such as Ariosa Diagnostics’ Harmony test, will also permit further investigation into the efficacy and economy of platforms such as sequencing and microarrays. Ultimately, prenatal testing represents a very probable continued growth opportunity for the multiple technologies of sequencing, microarrays and mass spectrometry still emerging in various applications within clinical diagnostics.