Between the need to protect food animals from pathogens and the willingness of pet owners to pay top dollar for testing and treatments, the animal health industry represents a huge opportunity for diagnostics makers. In fact, animal-health diagnostics is expected to be a $4.2 billion market by 2018, according to research firm MarketsandMarkets.
It's no wonder, then, that several companies are developing new diagnostic tests for use in animals. They include some companies that focus entirely on animals, like IDEXX Laboratories ($IDXX) and Advanced Animal Diagnostics, and others that pursue both the veterinary and human-health markets, such as Thermo Fisher Scientific ($TMO).
But these companies are running into a host of problems getting their products to market, according to a two-part investigative series in GenomeWeb. One of the biggest hurdles is the U.S. Department of Agriculture, which maintains a complex approval process for diagnostic kits that involves manufacturing inspections and other time-consuming tasks--hoops that diagnostics makers must jump through even when a new test is really just a tweaked version of an older kit. That can make it difficult for companies to release testing kits rapidly, say in response to a newly discovered pathogen.
"If I make a product for the FDA, I can make changes as long as I document them," Bill Nelson, CEO of diagnostics maker Tetracor, told GenomeWeb. "The way the USDA works is that they clear everything that I make. I can't make a product and release it, which I can for FDA." Pursuing a USDA license for diagnostic kits, therefore, makes it difficult for companies to recoup their development costs, he adds.
Companies can get around that challenge by selling molecular tests as individual reagents instead. Even before porcine epidemic diarrhea virus (PEDv) appeared in the U.S. in 2013--ultimately killing millions of piglets--Tetracor was able to quickly put together and market an assay that can distinguish between the disease and two related illnesses. But rather than pursuing USDA approval, which would impede Tetracor's ability to tweak the test going forward, the company sells it as separate reagents.
Problem is, tests that are marketed as reagents cannot include essential information like full protocols and instructions for interpreting results. Such material would qualify a molecular test as a "kit," which would have to be USDA approved. Only 6 molecular diagnostic tests carry USDA licenses.
Thermo Fisher makes 4 of those kits, and the company's global head and general manager of animal health, Martin Guillet, believes the USDA's license is vital. "Kits come with an internal positive control built into those assays, so the lab can run their tests…then they can be sure that they're getting good results," he told GenomeWeb in the second part of its series.
Farmers and veterinary labs have narrow profit margins, however, so diagnostics makers must continually balance the demand for cutting-edge technology with the cost constraints.
Nevertheless, many industry experts predict the animal health industry will embrace advances in molecular diagnostics, in spite of the expense and the regulatory challenges. Some veterinary diagnostics labs are already moving beyond polymerase chain reaction (PCR)-based tests and purchasing next-generation sequencing technology, such as Ion Torrent, so they can rapidly identify and address pathogens before they endanger animal populations.
Beverly Schmitt, director of the Diagnostic Virology Lab at the USDA's National Veterinary Services Laboratories told GenomeWeb that her group uses Ion Torrent and other next-gen technologies. "What I think is going to happen, and what I think everybody else is seeing, is that the veterinary diagnostics labs, just like with [the uptake of] PCR, will move toward doing next-gen sequencing of clinical samples," she said.