Docket No.

FDA – 2010 – N – 0274

Presenter 14, Session 2: Oversight of LDTs: Clinical Laboratory Challenges

I am Dr. Klaus Schafer, President and CEO of TessArae LLC, a small biotechnology
business located in Potomac Falls, Virginia. I wish to thank the committee for allowing
me the opportunity to express our views in this public forum.

TessArae’s principal business is design, development and distribution of microarrays for

high-performance targeted gene sequencing. We provide customized microarray designs
to meet the requirements of individual customers, develop associated reagent kits, and
support real-time data analysis as assay-generated DNA sequences that can reveal
specific DNA mutations causing inherited disease, or reveal the presence and identity of
one or more pathogens causing infection.

It is ONLY by targeted gene sequencing that specific mutations (or pathogens) may be
directly and unequivocally detected and identified, whether the particular mutation or
pathogen strain has been previously known and characterized or not.

Today, in contrast, most nucleic acid testing devices use only short signatures of gene
sequences as indirect biomarkers of intended target gene mutations or pathogens. Such
conventional tests can only be designed once a target mutation or pathogen has been
identified, and these tests cannot differentiate among similar sample gene sequence
signatures that may represent the intended target or worse unintended targets. TessArray
technology, and any other highly multiplexed, direct target gene sequencing platform
overcome these striking (and costly) shortfalls of conventional approaches to molecular
diagnostic testing.

The current regulatory path for diagnostic tests (FDA/CDRH/OIVD) is simply not
congruent with the superior capabilities, performance and informational value from
multiplexed, direct target gene sequencing devices. This path ensures that technical
advances will only be congruent with the status quo capabilities of previously approved
devices.

Under current regulatory policy, highly multiplexed, direct target gene sequencing assays
developed by manufacturers face an impenetrable barrier to FDA-clearance for clinical
diagnostic use. On the other hand, assays can be developed as internally validated tests,
LDTs, by high complexity (CLIA, CAP) diagnostic laboratories with little regulatory
oversight. However, these tests must be developed with little or no involvement from the
commercial sectors that develop the technology and are the subject matter experts. The
critical point is whether or not the individual laboratory must be solely and exclusively
the innovator and developer and validator of any new test to be offered as a service by the
laboratory. Some laboratories are reluctant to embed any third-party components (such as
research use only commercial products and services) into a test and protocol to be
validated internally as an LDT.

Because the definition of an LDT remains unclear, some labs are willing to work with us,
others are not. Those labs that will not work with us fear regulatory retribution that may
affect the laboratory’s accreditation, not just the implementation of a particular test. We
have attempted to get legal counsel as to the definition, only to receive very mixed and
inconsistent advice.

We strongly believe that we should be able to sell our expertise to CLIA/CAP

laboratories for tests that we are developing in collaboration with those labs, very much
in the way consultants with special expertise support all of us. We are an original
equipment manufacturer, operating much like a contract research lab to a drug
development company. The genomics-based design services and products we develop
will eventually be used by the laboratory as an LDT to market as its own. The CLIA/CAP
labs neither have the time, resources nor skill sets to design and develop more effective
custom-designed tests without our help. In contrast, we have the knowledge to design
these tests, which include three necessary components: array design, wetware processes
design and the building of the interpretive algorithms. Once we complete the work, the
lab is responsible for the tests, its quality control and clinical validation. So should they
be denied access to our capabilities because of uncertainties of definition or unreasonably
high expectations of the LDT definition? We believe that to do so only creates barriers to
superior innovations to improve the status quo of diagnostic testing in general.

With respect to recent FDA oversight activity addressing Direct-to-Consumer (DTC)

genetic testing, we are in agreement that there are obvious risks to the patient, particularly
in the elimination of intermediate professional genetic counseling and clinical healthcare.
There is a need for assurances with respect to the integrity and the inclusivity of the
results from proposed DTC tests. This is appropriately targeted for regulatory review.

We strongly recommend an explicit guidance that emphasizes the current CLIA and/or
CAP processes for evaluation and validation of any test device or service to be offered by
the laboratories. This should be the primary definition of LDT. The individual testing
laboratory should be able to access third-party commercial products and services for an
LDT, and part of their validation protocol would require appropriate assurances of the
availability and configurational reproducibility of such third-party components or
services.

We respectfully ask that the committee remain mindful of its ability to advance the state
of medicine through careful and thoughtful policy decisions, without being harmful to
patient safety, much as I have attempted to describe. We ask that you not limit the ability
of companies like ours to work with clinical professionals and laboratories by so
narrowly defining Lab Developed Tests, that we cannot help the labs develop new tests.
Such policies will severely restrict the ability to deliver these new capabilities to both
physicians and patients.

Thank you. This concludes my remarks to the committee.