NIST Industrial Impact

Company: Third Wave Technologies, Inc., Madison, Wisconsin
Business: Biotechnology
Number of Employees: 72

Futurists define the “third wave” as the next stage of revolutionary change in technology and society. In the case of Third Wave Technologies, Inc., a rapidly growing biotechnology company in Wisconsin, the reference may be entirely appropriate.

With co-funding from NIST’s Advanced Technology Program (ATP), the firm has demonstrated a unique approach to identifying genetic variations that already is saving scientists time and money in the laboratory. The technique also is expected to reduce healthcare costs by improving the specificity of medical diagnosis and treatment evaluation, saving patients the money, time, and pain spent on ineffective therapies.

“The ultimate aim of DNA diagnostics is to catalyze the transition from generalized medicine to personalized medicine,” says Lance Fors, chief executive officer of Third Wave. “You are going to get therapies that are customized for you, so they will be more effective.”

The new technology, developed initially for research on genetic mutations but expected to have many other applications, is intriguing for many reasons, including mounting evidence of its potential for broad-based impacts on the U.S. economy and healthcare. For example:

• When used to identify different strains of the hepatitis C virus, the technique costs up to 79 percent less per sample than two standard competing methods, including automated DNA sequencing, according to a study by an independent laboratory that plans to use it in clinical trials.

• It works faster and analyzes longer DNA fragments than conventional methods, according to Italian scientists who used it to detect mutations in various human genes.

• Markets in research, diagnosing and treating infectious and hereditary disease, and accelerating drug discovery could create thousands of new jobs.

The mutation-detection method, known as Cleavase Fragment Length Polymorphism (CFLP)®, was a hit even before the ATP project ended in late 1996. The first product kit based on the ATP-funded research was commercialized by Third Wave for the research market in mid-1996, resulting in about $300,000 in sales that year.

CFLP is cost-effective for research on complex disorders such as deafness, which is inherited in 70 percent of cases and can be caused by as many as 100 different genes, says Tom Taggart of the State University of New York at Buffalo. The technique can scan unusually long segments of DNA and enables scientists to distinguish mutations from benign variations without resorting to more costly analytical methods, he says.

“You can scan a large number of samples and identify those that are most likely to have mutations,” explains Taggart, who heard about CFLP at a scientific meeting and began using it in his own research before receiving a grant from Third Wave to teach others how to use it.

The market enthusiasm has created a flurry of activity at Third Wave, which has attracted funding for several disease-specific, follow-on projects from the National Institutes of Health; formed alliances with five major product distributors in four product markets; and grown from six employees at the beginning of its first ATP project (the company recently won a second award to develop general tools for healthcare applications) to 72 now.

Third Wave’s technique challenges the “gold standard” of genetic analysis, DNA sequencing, the laborious process of determining the precise order in which four chemical bases appear in a fragment of genetic material. CFLP identifies DNA by its physical structure, enabling a scientist to find a mutation without going to the time and expense needed to determine the chemical sequence.

CFLP is based on the observation that single strands of DNA (formed when the double-stranded molecule is heated and separated) fold into unique physical shapes based on their chemical sequence. Third Wave has developed a family of proprietary enzymes that recognize the junctions that occur in certain regions of secondary DNA structures.

The resulting fragments then are separated in an electrically charged gel. This process is similar to conventional separation methods except the gels are smaller, the process is faster, and the resulting “fingerprint” can be read directly from the gel without the need for computer analyses or graphical representations of the data. “The fingerprint that you actually see looks like a bar code on something at the grocery store,” Fors says. “It’s a visual thing—much easier to read.”

A distinct bar code is generated for every unique DNA sequence. Thus, mutations can be detected by simply comparing a sample to a normal fingerprint. CFLP detects mutations about 97 percent of the time in clinical samples, comparable to DNA sequencing. Moreover, whereas many techniques merely reveal the presence of differences, CFLP can identify and localize distinct variants. Like bar codes, fingerprint patterns can be stored electronically for later use.

The ATP funding enabled Third Wave to expand on its early observations of enzyme function, design a process that is practical and reliable, develop reagents, and conduct extensive testing. Much of this work would not have been possible without ATP, Fors says. The company obtained about 20 patents and developed several new enzymes based on the ATP-funded research.

Third Wave has validated its technique for several economically important uses, including scanning for mutations associated with resistance to one or more drugs in some strains of the bacterium that causes tuberculosis (TB). One-third of the 8 million cases of TB each year are resistant to one or more drugs, resulting in average treatment costs of up to $200,000 per patient, according to the company. Third Wave plans to market a kit that can hasten timely identification and use of the appropriate therapy, substantially reducing costs.

A study at the University of Verona in Italy found that CFLP reliably and quickly detected mutations in several human genes, including one linked to cystic fibrosis. “Rapid methods for mutation screening have great importance in medical genetics, not only for research purposes but also for molecular diagnosis (presymptomatic or prenatal),” the Italian scientists noted in a 1997 journal article.

ClinCyte, a Carlsbad Calif., contract research organization that supports the biopharmaceutical industry, used the technique successfully to identify interferon-resistant strains of hepatitis C viruses in 61 clinical samples. The study, published in a 1998 journal article, concluded that CFLP is “simple, rapid, reliable, and cost-effective for routine use” and costs about $20 per sample, compared to almost $50 for automated sequencing. ClinCyte now plans to use CFLP in screening for drug resistance mutations in clinical trials of biotechnology-based drugs for hepatitis C, according to Srinand Sreevatsan, the study’s primary author.

Fors notes that it took 6 or 7 years for DNA sequencing to catch on as a fundamental research tool, and he expects it will take time to validate the structural fingerprinting approach. But he is confident that time will show CFLP to be a valuable technique.

November 1998