Interview with Dr. Nicholas Conti, VP of Business and Development at Quest Diagnostics.
by James Lim
The CanScan team had the pleasure of interviewing Dr. Nicholas Conti of Quest Diagnostics. As a VP of Business development, his key activities include the evaluation of novel technologies, negotiation and structuring of licensing and strategic alliance agreements. With over 8 billion dollars in revenue, Quest Diagnostics is the world’s largest laboratory services company, and a potential key partner and customer of CanScan’s core technology.
We wanted to understand their licensing and strategic alliance models with respect to adopting and incorporating new diagnostic technologies into their vast portfolio.
Key reasons why a diagnostics start-up like CanScan would partner with Quest:
1.Access to vast network of physicians and hospitals
2.Strategic alliances in the form of revenue sharing agreements provide investments toward technology validation and development
Key reasons why CanScan would not partner with Quest (at least initially):
- All testing of patient samples will be conducted and retained within Quest laboratories, a crucial element for future IP generation and growth.
- Limited revenue opportunities, strict licensing agreements, and potential cannibalization of technology
Interview Highlights
Key quote: “Quest does not rent out our distribution network”
~ special exceptions seem to exist, eg. OncoType DX
Key points: You can license the technology to Quest, form a strategic alliance, or become a direct competitor…
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Interview Transcripts/Summary
Q: Can you tell us some of the reasons why a startup would enter into a licensing or strategic alliance with Quest Diagnostics?
A: The primary reason is access to our vast distribution network. Currently we process over 150 million patients samples each year, with service agreements with over 160,000 physicians across the US . We have over 30 regional labs that provide core diagnostic services, with 2 additional centers for esoteric services (low yield, experimental) located in each coast.This type of volume is supported through a transportation network of over 2000 vehicles and 21 commercial airplanes. We provide daily pickup of patients samples at most hospitals, with turnaround time occurring in little as 24 hours. In addition, we have over 2000 patient service centers, where patients with requisitions from their doctors can drop-in, have their blood drawn for testing.
A secondary reason is our asssistance with preclinical validation and assay development. Most start-ups in the diagnostics field face many challenges to entering into market – Including the costs associated with validating and certifying the technology, and the marketing required to promote the technology. Additional obstacles include navigating the complex payment structure of hospitals, insurance companies, and medicaid/cms – this requires a significant amount of resources that many smaller companies simply don’t have. Strategic alliances with Quest will provide academic institutions and companies access to over 900 MD’s and PhDs dedicated to research and development of such technology, with funding available for initial preclinical validation all the way through FDA clinical trials.
Q:What is required before Quest will consider adopting a new technology?
A: Generally, the three things will need to happen. 1. Strong patent around the technology (for licensing). 2. Clear validation of the technology, through publications, and acceptance of the technology within the scientific community. 3. Quest will have to reproduce the published results within their own labs. Preclinical validation to demonstrate utility (200 to 400 patients), and comparison with competing technologies. General buzz and interest from Physicians is also crucial (buzz at an ASCO conference).
Q: Does Quest currently provide CTC testing?
A: Yes, we offer Veridex’s CellSearch system. Currently, this is a low volume or esoteric serivce that we offer. The main customers seem to be Research institutes, with clinical physicians mainly ordering the service for research purposes and further validation studies. I don’t feel they have clearly demonstrated a value for enumerating CTCs, there needs to be more research in terms of clearly defining a value for the patient and physician.












-Brian standing in front of the Alta Bates Medical Center in Berkeley, CA