The in vitro diagnostics market has grown significantly in the past year, according to a recent report from PricewaterhouseCoopers, and will continue to do so well into the decade.
Companies poised to take advantage of this growth include those that emphasize personalized medicine and look for ways to better serve the industry. One in vitro diagnostic firm exemplifies these qualities.
Luminex was founded on its multiplexing technology platform xMAP. “Our proprietary technology xMAP technology is the basis of everything that we do,” says Luminex CEO Pat Balthrop. “Every product that we sell and every product that we have in the pipeline is based on xMAP.” Luminex holds 79 patents and has 206 patents pending for its technology.
The technology provides a method to run several tests simultaneously using only one patient sample. For example, the xTAG Respiratory Viral Panel enables testing for several respiratory viruses, thereby helping reduce inappropriate use of medications. FDA recently cleared Luminex to update xTAG RVP's label to include data about the test's ability to assist doctors in distinguishing patients infected with a common seasonal respiratory virus from those potentially infected H1N1.
Balthrop explains that the xMAP platform is flexible and it addresses two key needs for industry: high performance and efficiency. The ability to meet both of those needs with one technology has been the secret to success for the firm. “Delivering to a customer the ability to do more work with less cost is a powerful formula,” he says. “Luminex has a product development strategy that requires that any product that we develop improve healthcare outcomes and reduce costs. The key word in that strategy is ‘and.' We will not develop any product that does not meet both of these criteria.”
The success of xMAP has enabled the diagnostic company to develop a strong internal R&D program for new applications for the technology. “Our annual revenue growth has been 30% compounded, while our gross margins have improved from around 40% to about 70%,” Balthrop explains. “This has allowed us to increase R&D and invest in a robust pipeline that now positions Luminex and our partners very well for the future. And we have more than $100 million in cash with no debt.”
Caution in Collaboration
Luminex has also taken steps to pursue strategic collaborations with other corporations. “We are not waiting for entities whose interests are not in alignment with ours to come around to our way of thinking,” says Balthrop. “Some diagnostics pundits and companies seem to be waiting for these companies to somehow become altruistic and abandon their profit motive, which seems naïve.” The company has established many partnerships to spur adoption of xMAP technology into new markets and diverse geographies. Recent collaborations include the following:
• An agreement with Becton Dickinson to create diagnostic tests that enable earlier diagnosis of cancer.
• An agreement with Mingyuan Medicare Development Co. for a series of newborn screening products to be sold in China and Hong Kong.
Balthrop caution, however, that all collaborative agreements should be based on sound business and should not happen without benefits for all parties. “Collaborations are excellent opportunities,” he says. “But it is important to remember that there are many highly successful and powerful companies that have been built on, and depend on, the current healthcare system delivery model. For example, using diagnostics to provide better, cheaper care could have the potential to lead to fewer pharmaceutical prescriptions. The entities selling these pharmaceuticals will resist almost any initiative that will reduce costs, if that cost reduction is manifested in the form of fewer prescriptions, less revenue, and less profit.” Therefore, he says, “Luminex is in the process of collaborating with companies and entities whose interests are in alignment with ours.”
Moving Beyond Borders
Global expansion is part of the company's strategy. The firm recently opened offices in Shanghai and Tokyo. As part of its expansion into the Asia-Pacific region, it is collaborating with the Chinese government and partners to install Luminex systems to improve cancer detection throughout rural China, where cancer rates are extraordinarily high. The company also will drive cancer prevention initiatives, providing data on the types of cancers experienced in rural China and why some regions are experiencing higher cancer rates than others.
It also launched the xTAG Cystic Fibrosis 39 Kit v2 and xTAG Cystic Fibrosis 71 Kit v2 in Europe. These diagnostic tests provide assistance in cystic fibrosis screening for newborns and confirmatory diagnostic testing in newborns and children. The tests also can be used for carrier testing in adults of reproductive age.
Choosing the Right Strategy
At its core, Luminex is dedicated to health, safety, and quality of life for people worldwide. In collaboration with its customers and partners, the company is leveraging its xMAP technology to make science and healthcare faster, more accurate, more efficient, and more cost-effective. “Luminex has a very bright future with many significant growth prospects,” Balthrop says. “The challenges that we have are to select the right ones, whether these are partnerships or products. Our overall goals are to continue to build a high-growth, increasingly profitable company based on differentiated, high-value technologies and products.”
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