Push for personal medicine boosts firm: Software developer RND is busy working on gene-based diagnostic devices

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The future of medicine is personal.

That’s been the mantra of the pharmaceutical industry for the last decade-since the human genome was sequenced for the first time.

But before Eli Lilly and Co. and its peers can develop and sell drugs that treat only patients with a specific gene, it needs sophisticated devices to test if a patient has that gene.

And those devices need sophisticated software to make them run.

That’s where The RND Group Inc. comes in. The tiny Indianapolis software firm has seen its growth surge as diagnostic device firms race to come up with machines that test human tissues and fluids at the molecular level.

The company’s sales last year grew 31 percent, to $3.4 million, even as it turned away some work, CEO Tim DeFrench said. The 24-employee firm is trying to hire as many as six more software engineers to handle projects coming in.

“We can’t bring in the people fast enough,” said DeFrench, who co-founded the company in 1997 with a colleague from the former Software Artistry Inc. “It just seems like there’s a big flurry of new opportunities.”

So-called molecular diagnostics is in the midst of huge growth. In 2005, the global market totaled $13.8 billion and was expected to grow nearly 10 percent a year, to $22.7 billion by 2010.

Not counting the slower-growing market for infectious diseases, U.S. sales of diagnostic testing for genetics and cancer are growing at more than 20 percent per year.

The study of genetics is transforming scientists’ understanding of diseases. For example, doctors now see breast cancer not as one disease but as many diseases, based on the presence and activity of a woman’s genes.

A particularly aggressive form of breast cancer occurs when a woman’s genes produce too much of a protein called HER2.

In 1998, California-based Genentech Inc. launched Herceptin, which can stop some women’s HER2 genes from making the HER2 protein. Herceptin is now a blockbuster that rakes in sales of nearly $1.3 billion a year.

But at a cost of $36,000 per patient per year, it’s nice for a breast cancer patient to know if she does, indeed, have too much HER2 protein before she shells out for Herceptin. No more than 30 percent of breast cancer patients have extra protein.

So in June, the U.S. Food and Drug Administration approved a new device, made by California-based Invitrogen, which tests whether a patient has too much HER2 protein.

“It’s a huge thing to know up front,” said Geoff McKinley, vice president of business development at Osmetech, a medical-device firm in Boston.

RND Group wrote software for Osmetech’s eSensor XT-8 product, which tests if a patient has a certain sequence of DNA that might cause her to have dire reactions to such drugs as warfarin, a blood thinner, or tamoxifen, a breast cancer treatment.

Some of RND’s molecular-diagnostic tests would help doctors get a jump on diseases.

RND performed programming work for Veridex, a Johnson & Johnson company, on its GeneSearch Breast Lymph Node Assay. Veridex claims the genebased device predicts more quickly and more accurately when a breast tumor is spreading.

RND “backed into” diagnostic-device programming in the late 1990s when Roche Diagnostics hired the company to program software for a glucose meter.

The FDA wants a diagnostic device’s software to verify that the machine was calibrated correctly before running each test and to “mitigate” the risk of such things as tampering with the computer code.

RND’s big break came in 2001 when San Diego-based Gen-Probe Inc. hired it to do programming for its Tigris machine. That machine does non-molecular tests for such sexually transmitted diseases as gonorrhea as well as a molecular test for HIV, the virus that causes AIDS.

Many of the people who worked on the Tigris have gone on to other companies. They have hired RND Group to do software programming on their new projects.

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