Startup medical company proposes to offer free genetic testing to 100,000 advanced cancer patients to increase their chances for optimum therapeutic results
Strata Oncology (Strata), a precision medicine company based in Ann Arbor, Mich., plans to provide free genetic testing to advanced cancer patients beginning in 2017. The company raised $12-million dollars and teamed up with Thermo Fisher Scientific to complete the large-scale tumor sequencing project.
Using tumor tissue, Strata’s gene test sequences DNA and RNA to identify patients with certain gene mutations. This information is used to determine which cancer medications would be best for each patient. Patients are then referred to the appropriate pharmaceutical company for drug therapy and, potentially, for customized clinical trials.
Strata states on their website that their goal is to “dramatically expand late-stage cancer patients’ access to tumor sequencing and precision medicine trials, and to accelerate the approval and availability of breakthrough cancer medicines.”
Both Strata Oncology and Drug Companies Could Profit
Strata Oncology was co-founded in 2015 by Dan Rhodes, PhD (Strata’s CEO), oncologist Keith Flaherty, MD, of Harvard Medical School and Massachusetts General Hospital, and pathologist Scott Tomlins, MD, PhD (Strata’s Laboratory Director), from the University of Michigan Medical School. According to the company website, the goal is to commence sequencing advanced cancer patients next year. The company aspires to bring their testing to more than 100 partner hospitals and cancer centers across the United States.
Strata’s business model has a unique twist, compared to existing clinical laboratories and genetic testing companies. Strata is working from the premise that companies which manufacture cancer drugs will pay for patient referrals. Strata will use the offer of free genetic testing to find those patients. This strategy could prove to be profitable to both Strata Oncology and the drug companies.
For example, if a particular cancer drug costs $100,000, pharmaceutical companies would probably be willing to pay a lesser sum of money each time Strata refers a cancer patient to them for treatment, after one of Strata’s genetic tests identifies a patient with a genetic mutation that would respond well to one of their drugs.
Strata trial schematic (above): 1. Patients’ tumors are sequenced using a next-generation sequencing assay to identify genetic mutations. 2. If a patient’s mutation matches to a precision medicine clinical trial, the patient and their physician can consider enrollment onto the trial. (Image and caption copyright: Strata Oncology.)
One hypothetical example shows how Strata Oncology could profit from this business model. Assume that it provides genetic tests to 100 cancer patients at a cost of $150,000. If those tests identify 40 patients with a certain gene mutation, and the drug company is willing to pay $10,000 for each referral, Strata Oncology would end up with a profit of $250,000 over the cost of the genetic tests.
More importantly, patients with advanced cancer would receive free genetic tests with reasonable odds that those test results will enable them to receive a drug that might be effective at stopping or slowing their cancer. Based on their personalized information, patients also might be selected for clinical trials that involve therapies that may benefit their specific diseases.
Payers Do Not Pay for ‘Experimental’ Clinical Laboratory Tests
Because insurance companies view costly gene sequencing tests as experimental, they typically do not pay for them. However, sequencing provides pharmaceutical companies with valuable information that enables them to identify patients who are candidates to participate in clinical trials of cutting-edge medicines aimed at specific gene mutations.
“For most cancer patients in the US, tumor sequencing is not standard of care, so patients remain unaware of their eligibility for promising precision medicine clinical trials,” stated Rhodes in a news release. “By providing no-cost tumor sequencing for 100,000 cancer patients, Strata intends to be the catalyst, helping patients find the right trials and helping pharma find the right patients.”
Other Genomics Companies Also Offering Free Molecular and Genetic Tests
Earlier this year, Dark Daily reported that Contextual Genomics, of Vancouver, British Columbia, also is offering free genetic testing to a limited number of cancer patients. In their ongoing program, oncologists provided tumor samples from existing patients, and the first 1,500 patients were given the free genetic tests. (See Dark Daily, “Medical Laboratories Take Note: Canadian Lab Company Is Giving Free Genetic Tests for Cancer Screening to 1,500 Patients as Way to Advance Personalized Medicine,” June 10, 2016.)
There are other companies that sell cancer genomic tests for use by physicians to help their patients receive the best possible cancer treatments available, including Foundation One of Cambridge, Mass., and Genomic Health of Redwood City, Calif.
Foundation One manufactures tests that identify the molecular growth drivers of cancers. Depending on the complexities of RNA and DNA sequencing, their tests cost $5,200 to $7,200. Genomic Health makes their Oncotype DX series of products to optimize treatment decisions for breast, colon, and prostate cancer patients.
—JP Schlingman
Related Information:
Should We Sequence the DNA of Every Cancer Patient?
Foundation Medicine: Personalizing Cancer Drugs
Strata Raises $12M, Teams with Thermo Fisher for Cancer Trial Enrollment Push
