December 10, 2014 / 11:30 PM / 3 years ago

Genomics startup NextCode stakes claim in pediatric disease market

CHICAGO (Reuters) - Small startup NextCode Health will use gene-hunting tools pioneered by Iceland’s Decode Genetics to help a leading U.S. pediatric hospital identify causes of rare diseases in children, marking the latest foray of genetic sequencing into routine medical practice.

Cambridge, Massachusetts-based NextCode, a Decode spin-off, has signed a deal with Claritas, the former in-house lab of Boston Children’s Hospital that is now a stand-alone company focused exclusively on pediatric diagnostics, the companies told Reuters.

Claritas is just beginning to build its capacity for clinical sequencing. It expects its work with NextCode to help it offer as many as 20,000 sequencing tests per year, and cut in half the time needed to analyze results, which can now take up to six months.

The partnership was born out of the growing market for medical genomics - tests that scan for aberrant genes that could explain a child’s mysterious symptoms. Genetics experts say sequencing more than doubles the chances that families get a diagnosis, and saves spending on multiple single-gene tests.

“All of the pediatric hospitals are thinking about how they are going to scale up in medical genomics,” said Nurjana Bachman, chief business officer at Claritas. “Right now the bottleneck in clinical sequencing is interpretation.”

Claritas is accelerating its offerings in whole exome sequencing: tests that survey all of a person’s protein-making genes, which account for the lion’s share of disease. Analyzing the data has required lab researchers to review each mutation, searching published literature and databases for mutations most likely to account for the patient’s symptoms.

NextCode’s tools draw on a vast database of disease-causing genes. The company was spun out of Decode, a pioneer in mapping out the links between genes and common diseases by studying Iceland’s unique genetic heritage.

U.S. biotechnology group Amgen bought Decode in 2012 for $415 million to help it develop drugs addressing specific genetic mutations in patients.

NextCode was formed in October 2013 by former Decode executives Jeffrey Gulcher and Hannes Smarason. It has $15 million in financing from ARCH Venture Partners and Polaris Partners.

Gulcher believes NextCode’s software can help winnow the list of suspect genes anywhere from 100 to 1,000 times faster than current approaches. He would not disclose the value of the Claritas deal but said the company takes a cut of each test. “The more they scale up, the more we get as well.”

Reporting by Julie Steenhuysen; Editing by Michele Gershberg and Jonathan Oatis

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