Chutzpah: Millennium Takes on Diagnostics

Executive Summary

Millennium is turning its business development skills on diagnostics, promising to create a high margin business in what has been a price-cutter's paradise. Its advantage: using the discovery infrastructure built at Millennium and financed by drug companies for their deals with Millennium on drug discovery. All Millennium claims that it needs to make diagnostics pay (it hasn't for the vast majority of other diagnostics start-ups) is funding from diagnostics companies and drug firms interested in pursuing pharmacogenomics. Its major competition, the joint venture between SmithKline and Incyte called diaDexus, is skeptical that diagnostic firms, which have hitherto spent their R&D budgets on developing new instrument platforms, not the high risk hunt for new diagnostic markers, will change their tune now, and spend more on biological research than they ever have before by signing deals with Millennium. But Millennium is convinced that without the kind of new, important and expensive diagnostics it can discover with its biotech platform, such traditional diagnostic firms will continue to merely grind their profitability down in price wars.