BioReference Labs Goes Live With Digital Pathology Plus AI

by Jondavid Klipp | Feb 15, 2022 | AI, Artificial Intelligence, BioReference Labs, Digital Pathology

BioReference Labs Goes Live With Digital Pathology Plus AI

OPKO’s BioReference Labs (Elmwood Park, NJ) went live in December with new whole-slide imaging scanners from Leica Biosciences (Buffalo Grove, IL). The scanners have been integrated with a digital pathology solution, PathFlow, made by Gestalt Diagnostics (Spokane, WA). PathFlow is a cloud-based software system that has helped integrate BioReference’s LIS, workflow and scanned slide images with artificial intelligence algorithms developed by MindPeak (Hamburg, Germany). BioReference is also using PathFlow for slide image management and archival storage.

BioReference is using MindPeak’s AI tool (named BreastIHC) to detect and quantify breast cancer cells from digitized slide images with immunohistochemistry at its main laboratory in northern New Jersey. Pathologists can access their case and slide images securely on their computer monitors and use their mouse to outline regions of interest (ROI). All cells within this outlined ROI are instantly classified into positively stained tumor and unstained tumor cells. The panel of algorithms include five key tumor markers (ER, PR, Ki-67, HER2, and P53) which can be counted and scored.

Eventually, Dan Roark, Chief Executive Officer, Gestalt Diagnostics, expects the AI algorithms to both automatically identify the regions of interest in addition to performing IHC marker positivity scoring.

Digital Pathology & AI Market Growth
Separately, Roark says that after more than 10 years of limited adoption, digital pathology is finally starting to take off in the clinical market in the United States. Whole slide scanners have gotten quicker and less expensive. For example, it used to take 8-10 minutes to scan a slide but now takes as little as 30 seconds. But the biggest driver is the pathologist efficiency gains obtained when AI is applied to digitized slides. “The number of RFP requests we receive is exploding,” says Roark.

Worldwide Opportunities for U.S.-Based Pathologists
The U.S. has more working pathologists per capita than most other countries. For example, there are approximately 20,000 actively practicing pathologists in the United States, according to the American Medical Association. This works out to a ratio of one pathologist for every 17,000 people.

CDx Diagnostics Leads In Digital Pathology

by Jondavid Klipp | Jan 15, 2022 | CDx Diagnostics, Digital Pathology, Laboratory Economics

CDx Diagnostics Leads In Digital Pathology

CDx Diagnostics (Suffern, NY), which specializes in oral, esophageal, and laryngeal cancer testing, is by far the biggest digital pathology lab as measured by volume of Part B claims for CPT 88361. CDx was paid for 55,082 Part B tests for CPT 88361 (including combined global, TC-only and PC-only claims) in 2019, according to provider utilization and payment data from CMS.

CPT 88361 is used to bill Medicare for digital quantification of HER2, estrogen receptor (ER), progesterone receptor (PR) and Ki-67 for breast cancer. This code can also be used for digital analysis of other cancers, including oral and esophageal cancers.

NeoGenomics has four labs (California, Florida, Michigan and Texas) in the top 25 with a combined total volume of 19,950 Part B allowed tests for CPT 88361 in 2019.

Sonic Healthcare USA has two lab locations (New York and Texas) that performed CPT 88361 with a combined volume of 6,760 allowed Part B tests for CPT 88361.

Overall, Medicare Part B allowed volume for CPT 88361 totaled 191,205 tests in 2019, down 10% from 212,003 tests in 2018.

Exact Sciences Acquires PreventionGenetics For $190 Million

by Jondavid Klipp | Jan 15, 2022 | Exact Sciences, Lab Acquisition, PreventionGenetics

Exact Sciences Acquires PreventionGenetics For $190 Million

Exact Sciences (Madison, WI) paid $190 million, including 50% in Exact common stock and 50% in cash, for PreventionGenetics (Marshfield, WI) in early January. PreventionGenetics operates a CLIA-certified lab that performs proprietary next-gen sequencing tests, including PGnome Health Screen (list price $2,290) and PGxome Prenatal (list price $2,860).

Labcorp To Buy PGDx For $575 Million

by Jondavid Klipp | Jan 15, 2022 | Lab Acquisition, Labcorp, Personal Genome Diagnostics, PGDx

Labcorp To Buy PGDx For $575 Million

Labcorp (Burlington, NC) has agreed to acquire Personal Genome Diagnostics Inc. (PGDx-Baltimore, MD) for $450 million in cash at closing plus up to an additional $125 million based on future performance milestones. The transaction is expected to close in the first half of 2022.

PGDx was founded in 2010 by two cancer scientists, Luis Diaz, MD, and Victor Velculescu, MD, PhD, from Johns Hopkins University. The company received FDA clearance to market its comprehensive tumor profiling test kit, PGDx ELIO tissue complete, in May 2020. The test analyzes 505 genes
from FFPE tissue samples from advanced cancer patients to inform treatment decisions for 35 solid tumor types. PGDx ELIO is covered by Medicare under the PLA code 0250U at a rate of $2,920.

PGDx, which has 114 employees, recorded revenue of approximately $22 million in 2021. Revenue is expected to grow nearly 82% to $40 million in 2022. Labcorp expects the acquisition of PGDx to negatively impact its earnings slightly over the next couple of years, but provide returns in excess of the cost of capital by year five.

PGDx had raised more than $200 million from outside investors, including New Enterprise Associates, Bristol-Myers Squibb and Cowen Healthcare Investments.

Progenity Sells Lab Business To Northwest Pathology

by Jondavid Klipp | Jan 15, 2022 | Lab Acquisition, Northwest Pathology, Progenity

Progenity Sells Lab Business To Northwest Pathology

Progenity Inc. (San Diego, CA) has sold its lab business, Avero Diagnostics (Irving, TX), to Northwest Pathology (Bellingham, WA) for $10.9 million in cash. The sale of Avero Diagnostics is expected to reduce Progenity’s annual operating expenses by approximately $28 million. Progenity now expects to focus on its research and development efforts for new drugs and diagnostic tests.

Avero Diagnostics (aka Mattison Pathology, LLP) performs anatomic, genetic and Covid tests at CLIA-certified labs in Lubbock and Irving, Texas. Annual revenue is approximately $40 million. Avero was originally founded by Tom Mattison, MD, and Trae Mattison, MD, in 2004, and then sold to Progenity in 2015.

Northwest Pathology, which employs 10 pathologists, operates a full-service lab and provides pathology services to 13 hospitals and more than 100 outpatient clinics in Washington and Alaska.