John Bishop

Molecular-diagnostics company Cepheid develops, manufactures, and markets fully integrated systems that perform genetic analysis, including DNA and RNA analysis, for the clinical genetic assessment, biothreat, and life-sciences markets. The company takes pride in its systems, which enable rapid and sophisticated genetic testing of organisms by automating typically complex manual laboratory procedures. CLP wanted to know about general trends and Cepheid’s role in this complex industry, so we turned to the company’s CEO, John Bishop, for a few answers.

CLP: Tell me a little about the history of your company.
Bishop: Today, Cepheid is a broad-based molecular-diagnostics company with a focus in clinical diagnostics. Cepheid was formed in 1996 and has been publicly traded on NASDAQ (Symbol: CPHD) since June 2000. Over the years, we have built comprehensive core competencies in quantitative real-time polymerase chain reaction (q-RT-PCR). These include instrument and software engineering, biologic capabilities, probe and primer design, and production. These allow Cepheid to develop, manufacture, and market fully-integrated systems that perform rapid nucleic acid chemistries for genetic analysis, including DNA or RNA, for three primary customer areas: the clinical molecular diagnostic laboratory, which includes infectious agents and oncology; the industrial laboratory, which includes food, agricultural, and environmental facilities; and the biothreat market. Our systems improve patient care and public safety, while reducing cost by enabling rapid, sophisticated genetic testing of organisms and genetic-based diseases automating otherwise complex manual laboratory procedures. The goal of the company is to supply high medical value-added assays that provide medically actionable information to the clinician on a timely basis.

As you know, genetic molecular testing involves a number of complicated steps, including sample preparation (nucleic acid extraction), amplification, and detection. Based on state-of-the-art nucleic chemistry reagents, and micro-fluidic and microelectronic technologies, our easy-to-use systems integrate these steps and analyze complex biological samples in our proprietary test cartridges. Cepheid is focusing its efforts on those applications where both accuracy and speed in genetic testing is particularly important, such as in infectious disease, cancer, food and beverage, environmental safety, agricultural, and biothreat testing. We have designed our systems to perform a broad range of genetic tests that are used to identify infectious organisms, enhance cancer management and care, and identify organisms that could be used as bioterrorism agents.

CLP: What are some of Cepheid’s flagship products? How have they had an impact on the market?
Bishop: The company’s two principal flagship product platforms are our SmartCycler® and GeneXpert® Systems. The initial product platform, the SmartCycler, integrates DNA amplification and detection to allow rapid genetic analysis of a sample. Cepheid commenced sales of the SmartCycler in May 2000 and has sold more than 2,500 units to date to a wide range of customers. Our unique random-access approach makes this platform especially ideal in the clinical laboratory. It is interesting to note that we are the leading RT-PCR platform in the public health laboratories. We market a number of analyte-specific reagents (ASRs) and general-purpose reagents for the clinical area. The ability for a molecular laboratory to simultaneously conduct up to 16 different analyses on a single SmartCycler instrument has been indispensable, especially in settings where answers are needed quickly, but the volume does not justify running specimens in a batch modality.

The second flagship product, the GeneXpert System, integrates automated sample preparation with amplification and detection. This is all conducted in a single self-contained device, where the operator simply needs to add the specimen to the cartridge, load it on the instrument, and obtain the results. As we say, “Sample in, answer out.” Cepheid launched the GeneXpert System in the biothreat market in the third quarter of 2004, and we launched it in the clinical research genetic-assessment area with a Research Use Only (RUO) hematological oncology assay, BCR-ABL, late in 2005. Development and clinical trials of our initial FDA products for detection of Group B Strep (GBS), Methicillin Resistant Staphylococus aureus (MRSA), and enterovirus continues on the GeneXpert System. The advent of the GeneXpert System will allow a paradigm shift to occur in the area of molecular testing in a couple of ways. First, it will allow molecular testing to move from the specialized “molecular laboratory” and move into the central laboratory, where techs without specialized molecular skills can perform these tests, making essential testing available 24/7, if necessary. This will allow clinical laboratories that currently do not participate in the growing molecular-testing area to enter with minimal cost and training. Secondly and most importantly, it moves testing closer to the patient, where it can have its greatest impact.

CLP: What are a few of the challenges you have encountered over the years? What have you done to overcome them?
Bishop: As mentioned previously, genetic testing involves a number of complicated steps, including sample preparation (nucleic acid extraction), amplification, and detection. You see that in the marketplace there are companies that specialize in each one of these areas. We sought to provide a totally integrated approach to nucleic acid testing. This requires us to have expertise and core competencies in each of these specific areas. As a result, we have built our organization to accommodate each of these areas. In fact, we have a separate facility staffed by biochemists that provide our own primers, probes, and quenchers for our assays. This integrated approach allows us to have a unique insight into the design, manufacturing, and delivery of a very robust product that is offered up to the laboratory as a “system” from a single company.

Additionally, although the sensitivity of RT-PCR is very well-documented, the specificity of the technique is highly dependent on the prevalence of the target that you are seeking. We have had to overcome some unique challenges previously that are being leveraged in the area of clinical test design offering an unparallel approach for optimal sensitivity and specificity. As you may know, a Northrop Grumman-led consortium that includes Cepheid and other subcontractors has developed the Biothreat Detection System (BDS) for the United States Postal Service. At this time, more than 1,100 BDS units have been installed. In addition, a significant testing milestone has been passed with more than 2 million tests now having been run with no false positives while simultaneously maintaining a very high level of sensitivity. This result is equivalent to a specificity of greater than 99.9999%. This exquisite specificity was achieved while maintaining a remarkable analytical sensitivity. This was achieved using our patented, closed cartridge, with an automated sample processing and testing system. This is an example of the performance based on our unique test design that you can expect to have incorporated into the assays we develop for the clinical laboratory.

CLP: What makes Cepheid different from other companies who offer similar services?
Bishop: Cepheid’s GeneXpert System has the potential to offer a major paradigm shift when it comes to clinical molecular diagnostics. While most molecular companies continue to perpetuate on a paradigm that focuses on the high-throughput “batch” centralized molecular laboratory, we have focused on delivering an easy-to-use, rapid, random-access system accessible 24/7 closer to the patient with high-impact assays. The GeneXpert will provide an unparalleled level of automation that can be used by most laboratory professionals. This approach will allow better patient care while expanding the reach of molecular analysis.

Additionally, our focus is on high medical value-add products that provide a medical economic value to the health care system. An example of this would be the surveillance and control of MRSA within health care settings. While a test may cost tens of dollars, the savings per preventable infection is in the range of tens-of- thousands of dollars to the institution.

CLP: How does Cepheid plan to accommodate changes in the genetic-testing market? Where do you see the company 5 years from now?
Bishop: As molecular testing is standardized and delivered in a user-friendly format, we foresee a move out of the highly complex laboratory and into the moderately complex laboratory environment. This will make molecular technology available to thousands more laboratories in both the hospital and physician-office setting.

Additionally, we see the breadth of testing constantly increasing as new markers are discovered and their clinical relevance is determined. This will manifest itself in two areas. The first area is menu expansion. The second is delivering results in a cost-efficient manner. By this I mean that we will be delivering information on a lower cost-per-analyte basis via the ability to multiplex in a very sophisticated fashion, thereby lowering the cost of result delivered.

CLP: What would you like CLP readers to know about Cepheid?
Bishop: Cepheid is a broad-based molecular company with a focus on the clinical laboratory with a unique platform that will enable the benefits of molecular genetic testing to be accessible by most laboratories, closer to the patient, thereby enhancing medical care while lowering the overall cost of health care.

Michelle Said is associate editor of Clinical Lab Products.