DNA Tests Designed to Curb Biopsy Blunders

Posted in Medical Device Business by Jamie Hartford on June 26, 2013

Strand Diagnosics' kits match patients with their test specimens using DNA.  

Indianapolis-based Strand Analytical Laboratories is a CSI-style crime lab where analysts extract DNA from sexual assault kits and evidence recovered from crime scenes. The company helps to put away bad guys and ensure innocent people don’t end up behind bars. A spinoff of Strand Analytical Laboratories hopes to accomplish a similar mission in healthcare: ensuring sick people get the treatment they need and avoiding errors that cause healthy people to undergo unnecessary medical procedures.

Strand Diagnostics’ newest product, myPAP, aims to reduce errors associated with Pap test results.

Strand Diagnostics (Indianapolis) uses bar coding, forensic principles, and DNA matching to pair patients with their test specimens. Cofounder and CEO Ted Schenberg and business partner Dr. Peter Knapp came up with the idea for the company after watching a TODAY show segment about a healthy woman whose breast tissue biopsy was switched with that of a woman who had cancer. As a result, the healthy woman had an unnecessary double mastectomy, and the woman with cancer didn’t receive treatment as early as possible.

“We realized that using our core competency, we could have prevented that type of adverse patient outcome,” Schenberg says.

He asked Knapp, a urologist, if there might be a market for products that match patients to their test samples through DNA.

“There are many anecdotal stories of men having their prostates removed because a biopsy indicated they had cancer, but after the gland is resected, there’s no cancer,” Schenberg says. “It’s called the ‘vanishing prostate cancer syndrome’.”

Diagnostic ID, the precursor to Strand Diagnostics, was formed in 2008. The company’s first product, the Know Error system, launched in 2009, uses a DNA sample taken from inside a patient’s cheek to confirm biopsy tissue samples housed in bar-coded containers. If the biopsy comes back malignant, the DNA lab compares the patient’s DNA sample with that of the biopsy tissue to ensure they match. The company launched a similar kit for breast biopsies in September 2012.

The tests are typically covered by insurance, and the company is paid around $200–250 per test, Schenberg says. He says about 6% of the prostate biopsy market and about 1% of the breast biopsy market currently use Know Error kits. “The numbers are growing rapidly each month,” he adds.

In March 2012, the company received a three-year, $30 million investment from NantWorks (Los Angeles), an accelerator that focuses on developing next generation healthcare technologies. At that time, Strand Analytical Laboratories and Diagnostic ID also merged to form Strand Diagnostics.

Earlier this month, the company launched its newest product, myPAP, which brings the DNA-matching technology used in the Know Error system to Papanicolaou stain tests. The myPAP test was developed with clinical laboratory Manhattan Labs (New York City). The partnership was no coincidence; former Strand Diagnostics president Ken Cerney left the company late last year to become CEO of Manhattan Labs. “We lost a president, but we gained an apostle,” Schenberg says.

Strand Diagnostics’s tests have a unique market position at a time when the healthcare system is facing pressure to pare down the number of tests given to patients as well as reduce medical errors. “Our test removes cost from the system,”

Schenberg says. “Yes, it’s one more test, but it adds a level of increased safety, like seatbelts in a car.”

The company also hopes to develop DNA-matching kits for gastrointestinal, dermatological, lung, bone marrow, and brain tissue tests. “We think the next launch will probably be lung [tests],” Schenberg says.

Jamie Hartford


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