Keeping score: Daniel Farkas, PhD, tracks the recent hits and misses in molecular testing
Daniel Farkas, PhD
This past year has seen significant developments in molecular diagnostics—new
tests, new companies, and new strategies for patient management.
To get a feel for where molecular pathology has come from and where
it’s going, CAPTODAYpublisher Bob McGonnagle interviewed Daniel
H. Farkas, PhD, for Diagnostic Insight, the magazine of the Biomedical
Marketing Association. Here, in CAPTODAY, is an excerpt of that
Dr. Farkas began
his career in molecular diagnostics as a doctoral student in the
Department of Cellular and Molecular Biology at Roswell Park Cancer
Institute, Buffalo, NY. He earned his PhD in 1987 from State University
of New York, Buffalo. He is now director of molecular pathology
at Methodist Hospital, Houston, where he is setting up his third
molecular diagnostics laboratory, the first two having been at Saint
Barnabas Medical Center, Livingston, NJ, and William Beaumont Hospital,
Royal Oak, Mich. He is an associate professor of pathology at Baylor
College of Medicine and consultant to the clinical and molecular
genetics devices panel of the Medical Devices Advisory Committee,
Center for Devices and Radiological Health, Food and Drug Administration.
He is president of the Association for Molecular Pathology, and
he is the American Association for Clinical Chemistry’s liaison
to the CAP Molecular Pathology Committee. He will be a speaker in
the two-day molecular pathology session during the 2003 CAPannual
meeting in September.
Dr. Farkas spent
four years in product development, first at Clinical Micro Sensors,
Pasadena, Calif., and then with Motorola Life Sciences after the
company acquired CMS. He has “seen both sides now,”
he says, and is thrilled to be back in the clinical laboratory.
a retrospective look atmolecular diagnostics, what is your view
of the progress of the technology in clinical applications?
It is a difficult
question to answer and depends on the time frame you choose. If
you choose the big picture of molecular diagnostics, it is still
on the upswing.
Like the stock
market, if you look at the stock market charts from 1900 to 2002,
it is nothing but straight up. If, however, you look at any two-
or three- or five-year period, then it might be wildly down, as
for example it has been in the past few years.
the stock market analogy, I am still bullish on molecular diagnostics.
From the point of view of having been away from the clinical environment
during my four years in the biotech industry, I am a little disappointed
that there hasn’t been more progress. In other words, while
technology has progressed nicely over the last few years—for
example, the dramatic rise in the use of real-time PCR—the
number of high-volume, high-impact laboratory tests that have been
introduced is fairly small. I think that, in time, molecular diagnostics,
techniques, and pathology will make their way to every area of medicine,
with the possible exception of trauma, and certainly to every area
of diagnostic medicine.
On the flip side,
however, there have been very few home runs. You can count the home
runs in molecular diagnostics on the fingers of one hand—they
are chlamydia/gonorrhea and HIV viral load. The new home run that
is about to leave the ballpark is screening for the cystic fibrosis
panel of mutations as recommended by the American College of Obstetricians
and Gynecologists and the American College of Medical Genetics.
Those three tests
are and have the potential to be very high volume because they make
a difference in the way physicians manage their patients. All of
the other singles and doubles on the molecular test menu—sticking
with the baseball analogy—also have great potential and great
practical value, but they are simply much lower volume. For example,
Factor V Leiden would probably be a double. Other tests that can
be seen as singles would be leukemia and lymphoma genotyping. Colon
cancer mutation analysis remains relatively low volume today but
has great potential for growth as tests are developed for not only
familial colon cancer but also the much more common sporadic form
of colon cancer.
The same thing
goes for hereditary breast cancer, which has a much lower prevalence
in the population than sporadic cases, though the reference laboratory
with the patent on the BRCA1 gene is making a nice living and doing
an impressive volume of tests to detect gene mutations.
HPV has the potential
to be a home run, but at least here at Methodist Hospital, physicians
are not gravitating toward its use to replace the Pap smear. Recently,
the Association of Reproductive Health Professionals published clinical
practice guidelines that recommend HPV testing for the management
of women with abnormal Pap smear results, but for some reason this
is not generating the same kind of interest that CF testing has.
Then again, progress
is also a function of science. The molecular diagnostics community
can only take advantage of what the scientific research community
gives us. We are still very early in the genomics era. The data
we can get from the sequencing of the human genome and their translation
into targets for clinical tests are still developing. That is why
molecular diagnostics is very exciting, but ironically, even though
we have been doing molecular testing for almost 20 years now, it
is still early.
you comment on what appears to be the limited distribution of molecular
testing over the past few years? The principal amount of molecular
testing is still performed in a relatively small number of labs.
I think that perception
is finally changing. The 2002 record-breaking Association for Molecular
Pathology meeting provided a tangible signal that molecular diagnostics
is spreading. There are probably a couple of hundred laboratories
doing molecular diagnostics in this country. There may be some 5,000
doing glucose tests, so there is a large gap. But it all goes back
to medical need and utility. Economics is also a factor. Many hospitals
simply can’t afford to put any sort of investment in their
laboratory medicine department. That includes molecular diagnostics;
it may just be easier for them to send these tests out.
continues to grow at an attractive rate, which is why it is so interesting
to vendors. Test volumes at Beaumont Hospital, when I was there
from 1991 to 1998, grew at least 20 percent every year. While I
was in industry I continued to speak with my colleagues and from
their comments I know that an annual 20 percent to 30 percent rate
of increase in test volume is about average for established molecular
you describe your experience in industry?
It was great for
the first two years while we were Clinical Micro Sensors. I was
part of a team that was dedicated and 100 percent devoted to perfecting
the electronic DNA detection technology. It was a very exciting
time. Maybe we were infected with a little bit of naiveté
and believed we could really make a difference in the way physicians
practice medicine and pathologists practice molecular diagnostics.
It was very much a collegial team environment.
Then when Motorola
bought the company, everything changed because the great upside
of working in a startup evaporated for the most part. To be fair,
that purchase coincided with the downturn in the economy in 2000,
so things changed everywhere and would have changed even if CMS
had not been bought. Of course, we are all capitalists at heart,
and we were partially driven by the wealth-building opportunity
at Clinical Micro Sensors. When Motorola bought us that was instantly
capped, and it became more of a job and less of a passion.
is understandable that Motorola wanted to keep tabs on us and get
a return on its investment. In a perfect world, when the stock market
hadn’t tanked like in the heady days of 1998 and 1999, I think
that Motorola, and for that matter all larger companies that acquire
startup technologies, should have given us a lump sum and said,
“Here, go away for five years, then come back and dazzle us.”
Under Motorola, the environment became more bureaucratic and lost
a lot of its luster. Most larger companies are probably better at
manufacturing than at developing, and ours was a technology still
in development and not yet mature enough for revenue in 2000 and
This is part of
a generic problem we see in technology acquisitions. Often larger
companies that enter the field of biotechnology probably should
do a little more due diligence than they have been on the technology
they are acquiring to really understand what they are investing
in and what their likely return is over the short- and long-range
The thing that
disappointed me the most about Motorola buying Clinical Micro Sensors
is that there were so many opportunities in health care and diagnostics
that could have benefited from Motorola’s core expertise in
Internet solutions, communications, and electronics and that was
not brought to bear on the DNA detection technology that CMS had.
The ideas and technologies were never married. A lot of factors
may be the reason for this, including that the economy tanked and
Motorola could no longer afford the development costs.
on your experience inindustry, what are the warning signs in a startup?
control. Once the company begins instituting design control on the
researchers and does not allow them a free hand, this is a clear
warning sign that innovation might begin to wither.
There is an analogy
to this situation in diagnostics. A molecular diagnostics lab is
run by the book—according to CAP and CLIA—and according
to protocols that are demanded when you are generating patient results.
But at the same time many molecular labs do translational research.
They run studies that use data derived from other labs’ specimens
and add that to data from their own specimens to develop new tests
that physicians can use. While the appropriate scientific method
is employed, labs do not apply the same rigor of CAP and CLIA guidelines
to this translational research because it is not yet ready for prime
By the same token,
design control is absolutely essential for companies, because they
are commercial and need something to sell and because to bring a
product to the FDA you need to do it by the book. But when you impose
this design control on researchers who are trying to improve and
develop new aspects to the technology, it’s stifling. If a
company does not have the ingenuity to let the researchers run and
fly without imposing a lot of bureaucracy on them, this to me is
a major warning sign that maybe this is not going to work out.
On the other hand,
that may be a business decision. The company may think the technology
is mature enough to serve the marketplace and there is no reason
to let the scientists run free—it is time to manufacture.
But a startup by definition is not mature. So design control can
be good or bad; it depends on the business plan.
company most impresses you in terms of its development of a molecular
is the beneficiary of my kudos in this answer only because it was
smart enough to buy Organon Teknika’s NASBA technology. It
has been nicely developed into something that is quick, easy, and
relatively inexpensive and has an incredibly large test menu. The
whole world seems to use Bayer and Roche for HIV and HCV—NASBA
is a viable third alternative. Maybe they are like Avis—“we
On the other hand,
Roche and Abbott clearly have not done a great job. Roche has had
the rights to PCR for some time now. The molecular diagnostics community
was extremely disappointed about how long it took for PCR-based
methods and tests to come to the clinical laboratory in the 1990s.
And the rate at which new tests are coming out remains extremely
slow. To be fair, it is not all a function of Roche. The company
has a very difficult government bureaucracy to deal with in this
country. Despite that, Roche’s new strategy of ASRs for different
analytes using its real-time PCR instrument is growing into an impressive
Abbott, on the
other hand, started off well and is beginning to crawl out of the
hole of the FDA consent decree. Only time will tell how it will
fare with its new molecular systems and in its new partnership with
Celera. The potential is certainly great.
Maybe the solution
to this situation is ASRs. It is obvious that it is so much easier
and cheaper for IVD companies to use the ASR route to bring products
to market. But there seem to be hypocrisy and double standards in
this area. Visible Genetics staked its corporate life and existence
on getting FDA approval for its HIV genotyping test, anticipating
appropriate preferential treatment in the marketplace. But after
getting FDA approval, the FDA did not shut down the use of laboratory-developed
tests. So Visible Genetics could not get the accounts it needed
and had to sell the company. Bayer got this technology for a song.
Somehow Visible Genetics got its wires crossed.
On the other hand,
I think that the FDA’s ASR strategy to allow laboratory-developed
tests to multiply and continue is based on the fact that the FDA
trusts CAP-accredited laboratories. Lab directors know how to validate
tests, how to make sure they are reproducible and have value. The
FDA-approved molecular test menu includes only 50 to 60 tests. So
the FDA ASR rule really opened up the universe of molecular test
analytes as opposed to saying that labs can only run tests that
are FDA approved. In this way ASRs are a good thing. Molecular labs
would have continued to offer tests, of course, but at least now
there is some quasi good housekeeping seal of approval on lab-developed
molecular tests from the FDA in addition to CAP accreditation.
do you, having been on thesupply and demand sides of molecular diagnostics,
think about patent protection of genes?
In principle I
am against patents on gene sequences, but in practice I understand
why they are of such important practical value to the patentholders.
From a utopian perspective, it is inappropriate to patent genes,
gene sequences, and sequences within bacteria. In a practical business
sense, of course, it is necessary and legal. Companies have to have
a way to recoup their investment. I don’t have any Solomonic
answer to this difficult problem. It takes so much money to bring
a product to market that companies have to be zealous in protecting
their intellectual property.
A possible solution
is if the government—and I don’t know what part of the
government has jurisdiction here—could be forward thinking
enough to perhaps convene a group of diagnostic experts to come
up with a new and relatively inexpensive system to verify that a
diagnostic product is good, safe, and efficacious. Maybe then these
patents that are legal and business appropriate could be licensed
at an equitable rate. No one wants to deny a company’s opportunity
to make a profit, but at the same time you can’t make the
cost of licenses to patented materials so onerous that diagnostic
laboratories cannot afford to pay those license fees. Maybe today’s
system by which tests are approved is OK for chemistry or hematology,
but DNA is different and so maybe part of the solution is to change
the way in which DNA tests are approved. By that I mean making them
simpler and less expensive to approve, not the opposite, which some
in society desire.
there a place for point-of-caremolecular tests?
If you can do
them cheaply and quickly, then there is an opportunity for POC molecular
tests for infectious disease diagnostics and pharmacogenomics. But
the requirements for a POC test are rigorous and it is still difficult
to do DNA extraction, amplification, and detection for $10 to $20
and in less than 20 minutes. If you can do it, then you really have
for molecular POC tests is in the OR. Automated instruments that
can extract nucleic acids from tissue or a blood sample in five
minutes are now available. If this DNA can then be tested for markers
of metastasis or cancer in a real-time cycler by a technologist
in the OR, this can be an excellent complement to the frozen section
for cancer diagnosis. The same model applies to detection of pathogens
in the delivery room setting.
would you say is the futureof molecular diagnostics?
Right now finding
the right drug and dosage for a patient is based on a physician’s
experience but does involve a lot of trial and error. Molecular
diagnostics can make a huge contribution in this area, but it will
take a mammoth sea change. Part of that change will, unfortunately,
be driven by lawsuits initiated when physicians did not use a pharmacogenetic
test that was available. Also, the FDA will ultimately drive this
sea change by approving drugs only in conjunction with an appropriate
pharmacogenetic test linked to the use of the drug. When these tests
are utilitarian and available and are relatively inexpensive and
produce test results quickly,
this will be huge.