Cancer Blood Tests from Sysmex Inostics

Cancer is the second-leading cause of death worldwide, and in the US alone it accounts for nearly 1 of every 4 deaths. In 2014, there will be an estimated 1,665,540 new cancer cases diagnosed and the ability to diagnose cancer at its earliest stages remains a challenge. One company that has developed very sensitive blood tests to identify mutant DNA from cancerous tumors that circulate through the bloodstream is Sysmex Inostics.

About Sysmex Inostics

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Sysmex Inostics is a subsidiary of  Sysmex (TYO:6869), a Japanese company that is the global market leader in hematology, occupying the number-one share of the worldwide market. Sysmex is also the number-one supplier of coagulation instrumentation worldwide. Sysmex acquired Inostics late last year, thus forming the subsidiary Sysmex Inostics. Inostics, the company with the cancer blood testing capabilities, was founded in 2008 by cancer genomics pioneer Bert Vogelstein. Vogelstein, a professor of oncology and pathology at Johns Hopkins, was the first researcher to explain the molecular basis of a common human cancer.

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A special focus of Sysmex Inostics is the detection of mutant DNA that is released from tumors into the bloodstream, called circulating tumor DNA. A simple blood test allows for the highly sensitive detection and quantification of even the smallest amount of so-called “cancer genes” in a patient’s blood. Inostics uses the tests to improve cancer diagnoses and therapies by making key genetic information available for clinical drug development and also makes personalized data available for general patient care. The blood tests are based on BEAMing technology developed by Johns Hopkins University scientists. BEAMing technology is an ultra-sensitive digital PCR technology that is capable of detecting cancer cell DNA directly from blood with sensitivity and selectivity 100-fold higher than conventional technologies. Today there is only one U.S. Food and Drug Administration cleared methodology for detecting circulating tumor cells in whole blood, the CellSearch system, which uses iron nanoparticles and is marketed by Jannsen Diagnostics, a unit of Johnson and Johnson. Apocell also plans to commercially launch their Apostream technology platform for research-use-only in 2014 and as a point-of-care clinical device in 2016.

In October of last year, Sysmex Inostics announced a master collaboration agreement with Bayer HealthCare for the development of companion diagnostics for targeted cancer therapies. Inostics also seems to be shoring up their intellectual property portfolio. Just three days ago Roche announced a licensing agreement with Inostics for a worldwide, non-exclusive, royalty-bearing license for its emPCR portfolio of patents.

Given Sysmex is a leader in hematology, the Inostics cancer blood tests can now be easily marketed through existing distribution channels. While the Inostics technology seems to have great potential, the only way investors can receive exposure now is through buying shares of Sysmex, a $5.7 billion dollar market cap company. While Sysmex shares have steadily increased over +300% in the past five years, it will be difficult to estimate what impact the Inostics acquisition will have to Sysmex’s bottom line if any, and when.

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