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Trilogy Tidings

October 2013

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in this issue
The Mystery that is Theranos
Do clinical trials work?
Resources from our Archives
What does Trilogy do?

     I've spent a good portion of my life developing, or assessing the potential of, new products for clinical diagnostics.  So I was intrigued by the appearance of a new company in that space, a company promising to do great things.  You might be intrigued -- or maybe skeptical -- as well.

 

     Then a few discouraging words about drug trials.

Regards,
Joe

 

 

   Change Ahead

 

The Mystery that is Theranos
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     In September Elizabeth Holmes, the young CEO of Theranos, allowed or encouraged an interview with Joseph Rago of the Wall Street Journal. Holmes founded Theranos, a laboratory diagnostics company, in 2003. Since that time, little information about the company has been released to the press by its staffers and investors. In fact, the lid has been sealed from all prying eyes. This secretive stance has been either (1) an attempt to avoid the release of information to competitors or (2) a clever ploy to build intrigue and fascination with the company's ultimate products and services.

 

Theranos  

     On the surface their plan is simple: commercialize a technology for rapidly carrying out biochemical assays based upon minute samples of blood. Conceptually, that's nothing new; that's what point-of-care diagnostics is all about. Here's what is new:

  • A tiny finger-stick sample (volume unspecified)
  • An extensive analyte menu (hundreds of assays)
  • Claimed better analytical performance
  • Two-hour turnaround time
  • Published test prices lower than generally reimbursed amounts
  • A planned relationship with Walgreens to carry out testing at drugstore outlets

     The game-changing feature (sorry about that) is this concept of "retail" in vitro diagnostics, something very different from the status quo and a clear potential threat to the existing providers of lab services and products and driver of a potentially new relationship between patient and healthcare provider.

 

     I'm also struck by the leadership of this company: Ms. Holmes is 29 years old (not that there's anything wrong with that), and her board of directors includes Henry Kissinger, George Shultz, Sam Nunn and retired four-star general James Mattis. What's with the diplomats and DOD types? And where is the business acumen?

 

     The intended business model of Theranos is certainly not clear. For example, it's important to recognize and adapt to the logistics of getting from patient sample to reported result. And what about the huge installed base of analytical systems currently in place within hospital and commercial labs? Will that installed base suddenly have zero value? What will be its replacement cost? Can Walgreens afford the investment? Then there's the criticality of molecular diagnostics. Can Theranos run those complex assays?

 

     This is a very intriguing story. Maybe it will turn out to be all sizzle and no steak - the big-lab firms had better hope so. Or maybe it's the real deal and societal healthcare costs are in for a welcome reduction.

 

     You can read the WSJ piece here and read the sparse Theranos self-description at their web site. Let's see what the IVD-savvy blogosphere has to say about this mystery.

Do clinical trials work? 

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     I don't do much work that deals with clinical trials. We typically work in the time frame either before or after those activities. So I learned something from a July New York Times piece that I've been saving and finally read. The article was written by Clifton Leaf. He highlights important limitations of existing clinical trial protocols for potential new drugs.

 

Drug Trials  

     Leaf's thoughts are worth your attention. He makes two critical points:

  • Pharma companies sponsor and run the bulk of investigative drug trials against "a straw man comparator" like a placebo rather than a competing drug. So the studies don't really help us understand which treatments for a disease work best.
  • While on average studied patients do better on a candidate drug, hence the candidate drug may deserve regulatory approval, the great majority of trials are unable to identify the favorably responding patients according to some measurable criteria. Therefore, we really don't know a priori which patients in the general population will respond to the drug and which will not.

     I suspect these points are not news to most trial sponsors. But the general public - and maybe even you - will find them revealing.

 
Resources from our Archives 
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     Check out our Reading Room to view my published articles, presentations and white papers on a variety of topics.
  
     And, you can examine an archive of my prior newsletters (since February 2007).

 

 

What does Trilogy do? 

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     Trilogy Associates facilitates business growth and renewal through commercialization of new products, providing the following services:
  • Opportunity assessment
  • Business planning and enterprise growth strategies
  • New-product conceptualization, commercialization and marketing
  • Market research and competitive assessment
  • Business development and partnering
  • Market and technological due diligence
  • Assessment of the therapeutic and diagnostic potential of novel technologies
  • Design of efficient and effective development strategies for early-stage biomedical products
  • Business and technical writing/publishing

     Inquiries to establish whether and how we might support your business initiatives are always welcome.  Contact us.

Contact Information
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ContactInfoJoseph J. Kalinowski, Principal
919.533.6285
LinkedIn Profile: www.linkedin.com/in/trilogy
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