News, Analysis, Trends, Management Innovations for
Clinical Laboratories and Pathology Groups

Hosted by Robert Michel

News, Analysis, Trends, Management Innovations for
Clinical Laboratories and Pathology Groups

Hosted by Robert Michel
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For Second Time in Three Years, OPKO Health Will Acquire a Clinical Laboratory Company by Spending $1.47 Billion to Acquire Bio-Reference Laboratories

When completed, this acquisition means that the third largest public lab company in the United States will be owned by a multinational biopharmaceutical and diagnostics firm

It’s a big medical laboratory acquisition that has some experts on Wall Street shaking their heads. Last Thursday, it was announced that OPKO Health Inc. of Miami, Florida, would pay $1.47 billion to acquire Bio-Reference Laboratories Inc. (NASDAQ: BRLI), the nation’s third largest full-service clinical laboratory. OPKO (NYSE: OPK) is a multinational biopharmaceutical and diagnostics company in Miami, Florida.

No cash is involved in this purchase. OPKO will pay for the acquisition by exchanging 2.75 shares of OPKO common stock for each share of BRLI common stock. The deal puts a value of BRLI’s common stock of $52.58 per share, the companies announced.

The boards of directors of both companies have already approved the deal, which should close in the second half of the year.

Foundation Medicine Striving to Use Next-Generation Gene Sequencing to Enrich Diagnostic Value Offered to Physicians by Clinical Laboratories

Pathologists will want to understand how this innovative company is doing multi-gene analysis of patient tumors that includes information about therapeutics and clinical trials

CAMBRIDGE, MASSACHUSETTS—Next-generation gene sequencing is already changing how cancer is diagnosed and treated for a growing number of patients. Because it moves healthcare closer toward personalized medicine, this development has major implications for anatomic pathology groups and clinical laboratories.

One company in the forefront of personalized medicine is Foundation Medicine, based here in the Boston’s Route 128 biotech corridor. Last week, your Dark Daily Editor, Robert L. Michel, met with the executive team and toured the company’s CLIA-licensed medical laboratory to learn more about this company’s unique approach to clinical diagnostics. (more…)

LabCorp Stops Selling OvaSure Ovarian Cancer Test after FDA Letter

Facing pressure by the Food and Drug Administration over its OvaSure test for ovarian cancer, Laboratory Corporation of America announced last Friday in a Securities and Exchange Commission filing that it had stopped sales of the test. The dispute between the FDA  and the nation’s second largest laboratory company will be closely watched for insights into how the FDA regulates “home brew” assays.

In the October 20, 2008 issue of The Dark Report, an intelligence briefing provides an assessment on the issues of concern to the FDA about the OvaSure test for detection of ovarian cancer. It was these concerns which led the federal agency to send an initial letter and then a warning letter to LabCorp in recent months.

The current troubles swirling around the OvaSure assay represent two unfolding trends in laboratory medicine-and healthcare in general. One is the trend for new healthcare technology to have a demonstrated clinical benefit, along with a reasonable cost to achieve the improvement in clinical outcomes. Two is the repeated statements by the FDA that it sees the need for tighter oversight of diagnostic assays which incorporate molecular technologies.

The first trend came into play shortly after LabCorp, last June, began selling the OvaSure test as one method to detect cervical cancer. A number of physicians quickly criticized this decision. They argued that data from the clinical trials used to evaluate the OvaSure technology was not comprehensive enough to appropriately support how LabCorp recommended that physicians use the OvaSure test to detect cervical cancer. It didn’t take long before certain women’s health advocates also chimed in with criticism of LabCorp’s marketing of the OvaSure test. These criticisms were similarly rooted in a belief that the data from the clinical studies did not fully support the marketing claims for the test.

As to the second trend, the FDA seems to have noticed these public criticisms. It sent a letter to LabCorp late in the summer describing its concerns. Apparently, the FDA was not satisfied by whatever response was provided by LabCorp, because the agency then sent a warning letter to LabCorp earlier this month. In this correspondence, the FDA again questioned the adequacy of the clinical data used to support the manner in how the OvaSure test is marketed. The federal agency also, in its letters, noted that LabCorp was purchasing components of the test from Yale University and was thus not compliant with aspects of the home brew requirements.

By its actions, LabCorp has obviously decided that the best response to the FDA’s stop letter is to cease sale of the OvaSure test. This story has several chapters yet to come, depending on whether LabCorp wants to pursue its case with vigor and whether the FDA takes additional steps to rein in other home brew assays that many laboratories currently offer in today’s clinical marketplace.

For medical laboratories, there are two useful lessons to draw from the flow of events to date. First, a new laboratory test coming to market will have a much easier time gaining acceptance by physicians and payers if that test has strong clinical data to support its clinical efficacy, as well as its cost effectiveness.

Second, the FDA has once again served notice that it is concerned about home brew assays. This is not auspicious for the nation’s molecular testing laboratories, since any additional regulations will make it tougher for these laboratories to offer “home brew” assays to clinicians. It would also make it tougher for labs to gain additional knowledge about how home brew assays perform in clinical use.

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