First Ever Effort to Crowdfund Diagnostic Assays Launches in Response to FDA LDT Final Rule
LISA CEO explains why crowdfunding is a viable way to shoulder the new regulatory costs behind laboratory-developed tests
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In this interview, we talk with LISA CEO James Gilmore about a ground-breaking initiative to crowdfund diagnostic assays. For those not familiar with crowdfunding, it is a mechanism where groups get together to fund a project and leverage the power of social networks and online platforms.
Q: What does “LISA” stand for and why does it matter to clinical labs accredited by the College of American Pathologists (CAP) or COLA?
LISA stands for “Laboratory Integration Strategic Association” and is a coalition of industry and CAP/COLA lab partners. Our goal is to provide a path for CAP/COLA labs to bring new assays to market in light of the FDA final rule on laboratory-developed tests (LDTs).
Q: Why does this need a coalition approach? Can’t CAP/COLA labs just go it alone to make new assays?
Absolutely, but many will find it extraordinarily challenging. This is a completely different set of regulatory guidelines—ones that labs will not necessarily be familiar with—and it is very resource intense. In my experience, a relatively simple five-target assay will cost between $1.5 million and $4.2 million to develop. A broad assay with more targets could be upwards of $14 million for development. Besides the regulatory burden and costs, managing analytical validation along with the clinical verification requires a dedicated team, and you can argue this is a distraction for CAP/COLA labs.
Q: How does LISA work?
At its essence, in LISA we share the cost of developing an assay. But unlike other crowdfunding mechanisms, in LISA the CAP/COLA labs are backing the assay development by purchasing reagents. These are reagents the labs would likely purchase or want anyway. So, LISA is reward-based crowdfunding. And it is completely voluntary: A CAP/COLA lab member that is part of LISA is not required to back any projects, only the ones they want. Further, LISA members are encouraged to nominate assays they consider worthy of crowdfunding.
Q: LISA just launched its first crowdfund projects for urinary tract infection (UTI). Can you take us through that as an example?
We are really excited for this one! There are three projects that can be backed, and each project is a multiplex PCR assay with four pathogen targets plus an external extraction and amplification control. You can back just one, two, or all three projects depending on the breadth of the panel you want developed. Additionally, you can pledge at different target amounts. The higher the pledge, the higher the reagent discount. Once each project hits the minimum amount for activation, we begin the FDA clearance journey.
Q: And the pledge is by purchasing reagents?
Correct, and in this case, backers of the project will pledge an annual minimum purchase amount of UTI-related reagents. LISA has a number of reagents in this area that labs may find useful.
Q: What else do backers get?
There are material advantages. For instance, backers also get a discount on any cleared device that comes out of the project. But I think equally important, if not more, is that backers get peace of mind and a path through the final LDT rule. LISA will provide cGMP manufactured reagents—a requirement in Phase 3 of the rule. If backers opt in, they can be listed on the regulatory submission of the assay—a requirement in Phases 4 and 5. Essentially, CAP/COLA labs can launch new assays and build a client base while staying in compliance.
Q: Some labs may believe the FDA guidelines will be struck down or altered. How does this impact LISA?
In my opinion, unsettled regulatory frameworks inhibit both investment and growth. But in no case are we talking about doing away with FDA regulated devices. The goal of LISA is to gain clearance on devices, and this can benefit CAP/COLA labs by making devices, such as a UTI panel, not only easier to reimburse but likely more profitable.
Q: What kind of experience do the industry partners have?
We went with partners that have a strong background. Our manufacturing partner is Argonaut Manufacturing Services. They are FDA inspected and have produced millions of diagnostic kits. The development and clinical trials are led by Arete Biosciences, who has helped a number of diagnostic assays gain regulatory clearance. We have also engaged the legal team of Epstein Becker & Green, and they are top notch in both the LDT space and FDA devices.
Q: Last question: It seems that any effort to crowdfund diagnostic assays needs momentum to be successful. Is this correct?
Yes. It is an absolute requirement since the costs are distributed by the number of backers. The more labs that join, the more assays we can get submitted before the final FDA deadline, and this benefits all backers.
If you have more questions about LISA, are interested in backing a UTI assay, or want to know more on how crowdfunding diagnostic assays can help your lab, please visit www.lisabio.com.