A little more than 18 months after its $1 billion sale to a Japanese conglomerate looking to diversify more into the healthcare industry, Aliso Viejo-based Ambry Genetics is up to big things in its hometown.
The company, which started as a hereditary cancer testing provider, is now expanding its portfolio of test services for a variety of inherited and non-inherited diseases that are offered to universities, hospitals and pharmaceutical companies.
It also has designs on becoming the go-to source of genetic testing to consumers for a variety of health and genealogy-related uses.
Ambry plans to more aggressively market other types of tests, including those pertaining to women’s health. It’s also considering whether to expand its offerings to include direct-to-consumer genetic testing.
“Since the acquisition happened, we’ve been really targeted in the areas we want to grow in,” Chief Executive Aaron Elliott told the Business Journal at a recent meeting at its headquarters.
Elliott said the company, which was estimated to have sales in the $500 million range as of two years ago, is growing its local workforce, with an emphasis on sales.
The company has about 500 local employees, and more than 700 companywide. It is looking to hire at least 50 in Aliso Viejo, with positions ranging from lab jobs, to marketing positions, and those in sales and finance, according to its website.
To support the growth, the company’s making a move to one of the more notable offices in the city, 1 Enterprise, the four-story building that sits at the top of the Summit office campus.
The roughly 112,000-square-foot office was previously home to chipmaker Microsemi Corp., which has downsized after its sale last year to Chandler, Ariz.-based competitor Microchip Technology Inc.
Ambry recently leased the entire building to serve as its headquarters. It’s among the largest office leases of the year to date in South Orange County.
It will be moving into the building in phases, as Microsemi vacates two of the floors it currently occupies.
Ambry will take over the entire office by early 2021.
In the meantime, Ambry is keeping a good portion of its current collection of buildings on the opposite side of the San Joaquin Hills (73) Toll Road, according to Elliott.
The company is consolidating from a multiple-building headquarters setup into a single new building “to ensure that our employees are able to better collaborate together,” Elliott said.
Konica Acquisition
Japan-based Konica Minolta Co., best known for making photocopiers and printers, completed the purchase of Ambry in October 2017. The deal was initially valued at about $800 million but follow-on payments pushed the final figure close to $1 billion, according to reports.
Konica made the deal as part of its strategy to diversify into healthcare; other existing business lines it has in that sector include X-ray diagnostic imaging systems, ultrasounds and other diagnostic devices.
It’s a similar diversification play to last year’s acquisition of Santa Ana-based Irvine Scientific, a cell culture business that was bought by Japan’s Fujifilm in an $800 million transaction. Its local operations are now known as Fujifilm Irvine Scientific.
In particular, Konica saw Ambry as a crucial element in its precision medicine line of business, where Ambry’s genetic testing analysis can be combined with Konica’s imaging and AI-technology line of products to fight diseases like cancer and Alzheimer’s.
Ambry nowadays is part of Konica Minolta Precision Medicine Inc., a subsidiary formed last year by the global Japanese technology company.
Konica’s new precision medicine unit aims to provide customized genomics and imaging services to universities and hospitals, as well as pharmaceutical and biotechnology companies.
DNA, RNA
Ambry’s core line of business, genetic testing, remains vibrant thanks to the recent explosion in popularity for that type of work.
The market is expected to grow to an estimated $24 billion in 2024, according to a research report by Global Market Insights.
Ambry was formed in 1999 by Charles Dunlop, a cancer survivor who left the company when it was sold.
Elliott, who has a Ph.D. in genetics from the Johns Hopkins University School of Medicine, joined Ambry in 2008, eventually rising to the chief executive position in 2016. Elliott and the Ambry team were instrumental in winning a groundbreaking court case, University of Utah Research Foundation et al v. Ambry Genetics Corp., which ended the monopoly of breast cancer testing.
Ambry’s genetic tests, which are used in numerous clinical specialties, can determine if a person for hereditary reasons has a chance of cancer, heart disease or epilepsy.
The company has performed more than 1 million genetic tests and identified more than 45,000 mutations in at least 500 different genes. The majority, if not all, genetic testing by Ambry and its competitors is performed on DNA.
Its next step is to incorporate RNA testing data.
Ambry recently launched a study looking into the results of supplemental RNA genetic testing data. It presented the data at the American College of Medical Genetics and Genomics annual meeting last month.
“Our study goal was to determine if supplemental RNA testing could help overcome a limitation of DNA testing, that being the high number of genetic variants that are reported as ‘uncertain’ because they cannot be clearly interpreted,” Rachid Karam, director of its translational genetics lab said in an April statement about the study.
“Our results tell us that it can,” he said.
That means that the RNA testing, performed in tandem with current DNA tests, can provide significantly more accuracy.
Elliott, speaking of the industry as a whole, said: “We are just scratching the surface of what we can do from a technology standpoint in diagnostics.”
Growing Biz Lines
Tests for women are seen as a growth sector for Ambry.
Ambry’s women’s health arm now largely focuses on hereditary cancer. Its two most frequently ordered tests are CancerNext, which identifies inherited risks for at least eight types of cancers, including breast, ovarian and cervical cancers; and BRCAplus, a breast cancer gene test.
It is growing into women’s health with the CARE, or comprehensive assessment, risk and education, program that integrates genetic testing into breast imaging centers.
Consumer-oriented tests are also an area of potential growth.
Most of the time, genetic testing is done through healthcare providers such as physicians, nurse practitioners and genetic counselors.
Ambry has traditionally sold its tests through the latter. The rise of direct-to-consumer testing, however, has changed the way how these tests reach end users. They are marketed directly to consumers who can purchase and perform the test, send in results and receive their results directly, without necessarily involving a healthcare provider or insurance company in the process.
By the start of this year, more than 26 million consumers had added their DNA to four leading commercial ancestry and health databases, according to estimates from MIT Technology Review. Two giants leading the consumer test market are Ancestry.com Holdings LLC in Lehi, Utah, and 23andMe Inc. in Mountain View. The latter is the only one offering health reports in addition to ancestry insights.
A 2018 study by Ambry, published in Genetics in Medicine, said direct-to-consumer genetic tests have been accompanied by a high number of false-positive results—40% false-positive rate and 17% of variants in raw data from these tests were misinterpreted as high-risk.
While the company continues to make marketing directly to genetic counselors a priority, it is testing ways to encourage consumers to order the tests.
“Offering testing directly to the consumer is the most upstream you can get when trying to proactively capture the testing market,” Elliott said.
In March, Ambry partnered with My Gene Counsel, a digital health company that provides personalized, easy-to-understand genetic testing reports. The direct-to-consumer genetic test kit provides “results through medical-grade testing” and includes genetic counseling.
“At some point we may decide to look at consumer initiated testing where the patients, instead of the doctor initiates the testing conversation but the test itself would still need to be ordered through a clinician. The My Gene Counsel partnership is a step in this direction,” Elliott said.
