Diagnostics as Venture Investments
This article was originally published in Start Up
Will the emergence of new biological targets as a result of genomics and proteomics change venture investors' prejudice against diagnostics? No--or at least not until patented biomarkers can be tied more closely to the cause of the disease and to a therapeutic that treats it.
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Corixa's recent deal with Ortho-Clinical Diagnostics brings Ortho exclusive worldwide diagnostics rights to Corixa's breast cancer genes and antigens and helps Ortho gain a foothold in the emerging area of molecular testing. It also illustrates how biotech companies caught up in long-term programs for therapeutics can capture some near-term value. While Corixa's lead drug is delayed at the FDA, the deal gives the company a source of revenues that may be small but is at least real.
Various government agencies are proposing greater government oversight of genetic testing, with the most controversial recommendation asking the FDA to regulate "home brews," the tests that clinical labs develop in-house for clinical purposes. As implementation plans are hashed out slowly, IVD kit makers and clinical labs see both opportunities and hurdles. Hospital labs are concerned about being overburdened by the new rules, while iVD makers worry that reform would give labs an unfair advantage.