Leveraging Assay Platforms to Create Category-Killer Diagnostic Tests

The availability of novel assay platforms represents a tipping point for diagnostics' adoption in the markets for translational medicine, esoteric testing, and high-complexity labs. Platform companies may be accustomed to defining their business strategies in terms of maximizing instrument placements but this may not be the optimal path to commercial success for a novel diagnostic test. They need to develop "category-killer" tests--those that combine platform and diagnostic content to offer a compelling clinical value proposition.

S. Roopom Banerjee and Frank S. David, MD, PhD

Earlier this decade, clinical diagnostics was viewed by the broad investment community as a maturing, slow-growth, low-margin, and relatively uninteresting market. However, the emergence of novel molecular diagnostics in the last few years has catapulted the sector into the spotlight with public and private investors as well as larger strategic entities. (See Exhibit 1.) Successes this decade of Genomic Health Inc., the Digene Corp. division of Qiagen NV, Alere Inc.'s Biosite Inc., Myriad Genetics Inc., Cepheid, and the Cytyc Corp. division of Hologic Inc. laid the groundwork for a significant expansion in venture capital investments in emerging growth diagnostics. (See Exhibit 2.) Early-stage private companies benefiting from the surge in venture capital include BG Medicine Inc. and CardioDx Inc. in congestive heart failure (CHF) and AMI, Pathwork Diagnostics Inc. (tissue of origin), Prodesse Inc. (recently acquired by Gen-Probe Inc

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