Biosite: Struggling to Break Out of the Diagnostics Box

Biosite built a business in one area, drugs of abuse (DOA) testing, by producing a rapid result point-of-care (POC) test. This initial success led to the notion of developing other POC tests that would contribute directly to therapies. thereby garnering higher margins. This strategy is currently being tested in cardiology with the company's cardiac marker panel, which has run into marketing problems, in part because it required a very different kind of sales effort. In parallel, Biosite is aiming to come up with high margin proprietary markers: a costly, risky, research-intensive process that most margin-pressured diagnostics companies avoid. To pay for its marker discovery program--enabled by its phage display genomics technology--Biosite has set-up alliances with biopharmaceutical companies, which use the technology to discover and/or validate therapeutic targets, ceding to Biosite POC rights to diagnostic markers discovered along the way.