White Paper

The Opportunities and Future of Lab-on-A-Chip
Technology in Diagnostics
A White Paper
February 2009
2009 February Frost & Sullivan
The market research process for this study has been undertaken through detailed primary research which involves
discussing the status of the industry with industry participants and industry experts. The methodology used is the Expert
Opinion Consensus Methodology. Quantitative market information is based primarily on such interviews and therefore
could be subject to fluctuation.
The market research was completed in January 2009.
No part of this Frost & Sullivan report may be given, lent, resold, or disclosed to non-customers without written
permission. Furthermore, no part may be reproduced, stored in a retrieval system, or transmitted in any form or by any
means, electronic, mechanical, photocopying, recording, or otherwise, without the permission of the publisher.
2009 Frost & Sullivan.www.frost.com

1
Table of Contents
Terms and Conditions
Methodology
1. In-Vitro Diagnostics Market
2. Major Application Areas
3. Market Drivers and Constraints
4. Industry Challenges and Opportunities
5. New Era in LOAC Technology
Introduction to Hai Kang Life and EFADchip Technology
Glossary of Terms and Definitions
Appendix

2
Terms and Conditions
1. Frost & Sullivan takes no responsibility for any incorrect information supplied by users.
Quantitative market information is based primarily on interviews and therefore is subject
to fluctuation.
2. Frost & Sullivan reports are limited publications containing valuable market information
provided to a select group of people. Our readers acknowledge when ordering that Frost
& Sullivan reports are for their internal use and not for general publication or disclosure
to third parties.
3. No part of any Frost & Sullivan report may be given, lent, resold, or disclosed to third
parties without written permission. Third parties include subsidiary companies, other
legal entities, customers, suppliers or any other organisation or associate of the company.
4. Furthermore, the report in full or in part may not be reproduced, stored in a retrieval
system, or transmitted in any form or by any means, electronic, mechanical,
photocopying, recording, or otherwise, without the permission of Frost & Sullivan.
Methodology
1. Developing market dynamics through extensive Secondary Research; credible data
sources, Frost & Sullivan proprietary database and syndicated research.
2. Gaining insights on the present market conditions and future directions from Internal
Delphi interviews as well as interviews with Key Opinion Leaders (thought leaders,
researchers, end-users) from the technology and application industries.
For further information, please visit us at www.frost.com or email at apacfrost@frost.com

3
1
In-Vitro Diagnostics Market
In-Vitro Diagnostics Market
A Market with High Potential as Diagnostics become Center Stage and Instrumental for the
Move to Preventive Medicine
This paper presents and evaluates the opportunities and changes in the clinical diagnostic market
in terms of in-vitro diagnostic (IVD) technologies, specifically that of Molecular Diagnostics.
One of the key technologies examined is the lab-on-a-chip (herein referred to as LOAC).
The global IVD market has shown a consistent growth of 6.72% annually, a trend that is expected
to continue until 2012. Point-of-Care (PoC), the largest segment, is estimated to grow into an $ 18
billion USD market by 2012 and Molecular Diagnostics is fast becoming an important component
as it registers a 15.4% growth annually. While the IVD market is still very much focused among
the Big Three: US, Europe and Japan constituting 90% of the 2007 global revenues, emerging
countries such as India, Brazil and China are expected to become important stakeholders within
the next few years. At present, the majority of the market is in the hands of the large players such
as Roche Holding Ltd., Abbott Laboratories, Siemens AG, Beckman Coulter Inc and Ortho-
Clinical Diagnosticsbut that will be expected to change as smaller companies with more
innovative technologies enter the arena.
The growth of IVD today stems largely from the rise of chronic and infectious diseases which
will continue to play a very important role with the increase in the aging population. HIV
continues to be an important indicator for growth of IVD as over 33 million patients continue to
live with this virus. Other growth drivers in the IVD industry are the increasing health care
spending in emerging markets, extending accessibility to more healthcare services and products
and developing awareness of health and disease prevention.

4
DNA chips hold the key to the future of the IVD market. The global efforts on various genomic
projects, including human and other organisms, continue to provide valuable genetic information
and knowledge, thus advancing biotechnology product development, including new drug
discoveries and IVD. The latter is more poised to benefit from these government funded genome
projects as it does not need complicated functional genomics on these newly identified sequences
as required by new drug discoveries. At present their primary usage is in expression studies or
genome sequencing consisting of hundred and thousands of spots. Proven technology, coupled
with a substantial amount of sequencing data, drives the market for functional genomic products,
including DNA chips. A significant amount of research is being conducted outside the U.S. (i.e.
Europe and Pacific Rim) creating worldwide market growth opportunities.
The recent IVD platforms still face technological bottlenecks. There is a need to simplify the
process, increase the robustness of analysis, as well as increase speed and repeatability. Newer
technologies such as DNA chips are designed to incorporate the above factors and simplify the
process of diagnosis and screening of diseases. DNA chips, which have the capability of
combining multiple technologies on a single platform, are at present largely limited to the
laboratory space but with the potential incorporation of process simplification as well as the other
factors mentioned above, they are poised to penetrate the diagnostics market aimed at the full
spectrum of opportunities including PoC.

5
2
Major Application Areas
Major Application Areas
Figure 2-1
The DNA Chip Market
DNA Chip Market
Source: Frost & Sullivan
There are several potential areas of application for the DNA Chip platform at present such as:
diseases, microbial contamination, drug discovery, bio-security and forensics. Furthermore, it is
not limited to human applications and is suitable for a variety of veterinary needs, food quality or
safety and environmental testing (for example, air, water, surfaces, personnel, etc.) either in
remote areas or industrial settings.
Currently, human diagnostics, presents the largest potential need and available market requiring
rapid screening on a large scale.
Human Diagnostics Diseases and their Prevalence

Prevalence of Diseases
The continued rise of disease prevalence despite medical breakthroughs remains the main
challenge faced by the healthcare sector. Globally, diseases have moved in a particular pattern
from developed countries to less developed ones. Case in point is malaria in developed
countries, like the US, malaria incidence has been controlled, but there remain some under-

6
developed countries that continue to fight this infectious disease. Nevertheless, affluent nations
also face a different challenge that of the rise in prevalence of lifestyle diseases likes cancer and
diabetes.
There are three general types of diseases where medical diagnosis and screening is vital: viral,
bacterial and human genetic/gene diseases. The first two categories are usually communicable.
The figure 2-2 below shows the top infectious diseases according to the World Health
Organization (WHO).
Figure 2-2
Top Causes of Death, Communicable Conditions (Global)
Rank Disease
1 Lower respiratory infections

2 HIV/AIDS
3 Diarrheal diseases
4 Tuberculosis
5 Malaria
6 Measles
7 Pertussis
8 Tetanus
9 Meningitis
10 Syphilis
Source: WHO, Frost & Sullivan
In terms of non-communicable diseases, cardiovascular problems top the list of major causes of
death, followed by malignant neoplasm or cancer. Neuropsychiatric disorders, which rank fifth,
include Alzheimers and Parkinsons diseases.
Figure 2-3
Top Causes of Death, Non-communicable Conditions (Global)
Rank Disease
1 Cardiovascular diseases
2 Malignant Neoplasm (Cancer)
3 Respiratory diseases
4 Digestive diseases
5 Neuropsychiatric disorders
Source: WHO, Frost & Sullivan

7
The Role of Molecular Diagnostics in Accelerating Change to Prevention
Currently, gene disorders such as certain cardiac conditions and cancer rank first and second in
terms of number of deaths per year. They are closely followed by various bacterial and viral
diseases.
For all of these diseases, the fast turnaround and accuracy of results from screening and
confirmation tests determine the effectiveness of doctors to impart life-saving treatment to their
patients. While there are conventional tests being used for confirmation, most fall short in terms
of speed and accuracy. It is in this arena that molecular diagnostics has much to offer.
Molecular diagnostic methods allow earlier and more reliable information on the status of a
disease than conventional methods. Molecular diagnostics can also facilitate predictions
concerning the future courses of diseases and lead to individualized therapeutic measures. They
are therefore viewed as fundamental to the emergence of the new era of personalized medicine.1
Industry participants and researchers are of the opinion that LOAC testing should focus on
infectious diseases, pre-natal screening, diabetes and bacterial screening. Globally, HIV, hepatitis
and cancer are potentially the most disruptive diseases requiring long-term care. Therefore,
effective management resulting from early screening and diagnosis of these conditions as well as
addressing the full spectrum of infectious diseases is where the need for an LOAC platform lies at
present.
Conventional vs. Nucleic Acid Test (NAT) Techniques
The earlier generations of diagnostic tests such as serology-based ELISA (Enzyme-Linked

Immunosorbent Assay) are used to detect hormones, bacterial antigens and antibodies, etc. With
the increase in disease complexities, these tests have certain challenges as diagnostic tools. For
example, antibody-based tests may miss recent infections because it usually takes several days for
the body to mount an immune response against a pathogen, narrowing the window of immediate
treatment action and effective containment.
Despite the fact that serology-based tests can be used to detect antigens and/or antibodies, their
major limitation lies in the relative lack of sensitivity. Usually, these methods have lower
sensitivity as compared to PCR (Polymerase Chain Reaction) or other nucleic acid-based
methods. Moreover, serological methods can allow typing of target pathogens but they cannot
achieve the depth and detail provided by genotyping.
NAT, on the other hand, has expanded beyond the study of genetics, to screening and detection of
cardiovascular diseases, neurological diseases, prenatal screening as well as viruses and bacteria.
1
EU Launches Project to Improve In-Vitro Diagnostics, http://www.webwire.com/

8
NAT technologies are in common use within the scientific community or in the laboratory space
but have not been able to achieve widespread penetration from a diagnostics perspective.
The growing interest and usage of NAT has been responsible for the development of several
different technologies and assay strategies. Ideally, NAT should be such that the assay would not
require labeling or amplification and would have single molecule sensitivity alongside the
advantage of rapid analysis at low cost. Although today many different labeling and detection
technologies along with amplification techniques like PCR are employed for both screening and
diagnosis, the drive towards the ideal NAT is still an on-going effort.
Conventional vs. NAT Diagnostic Techniques for Infectious Diseases
NATs are the newer generation diagnosis tests for infectious agents. Based on directly measuring
the presence of the infectious agent in the blood or other samples from the patient, these tests
allow for faster and more accurate screening of infectious diseases. NAT tests can generally
detect the presence of a pathogen even with the infection in its infancy.
Several NAT methods have been developed and accepted for detection of infectious agents in
patient samples. The most common is the PCR which can detect as little as 100 copies of an
infectious agent in a blood sample of 0.1 ml with results turned around in 24-48 hours. Such
amplification-based molecular diagnostic systems for infectious diseases have thus far focused
largely on systems for detecting STDs, respiratory infections and specific viral infections (HBV,
HCV, HIV, CMV and enterovirus).
Figure 2-4
Testing Generations
Past Present Future
1st Generation Diagnostics
CFT, ELISA, GDPT, SAT
2nd Generation Diagnostics NATs

PCR, RT-PCR, NASBA
3rd Generation Diagnostics NATs

Microarrays, LOAC
Enhancement of testing parameters such as speed, sensitivity and ease of use


9
NAT Diagnostic Techniques for Non-Communicable Diseases
When PCR was first developed, one of its primary applications was for identifying mutations in
genetic diseases. It was considered reliable for detecting all types of mutations associated with
the disease. Duchenne muscular dystrophy is an example of a genetic disease where detection was
simplified by the use of PCR 2. In addition, PCR genetic testing techniques have been further
developed by the introduction of real time, kinetic, homogeneous PCR reactions and also DNA
chip techniques. Development is ongoing and it can now be used for pre-natal screening as well
as the testing of drug reactions in patients suffering from cancer. Therapies can potentially be
fine-tuned by using PCR-based tests to study mutations in oncogenes.
The LOAC Advantage

Existing NAT techniques, although considered more advanced than serology-based tests still have
some limitations. For example, PCR relies on specific nucleic acid sequences (primers) to detect
targets such as pathogens and the number of primers used in each reaction is limited. It becomes a
challenge to detect more than one agent simultaneously in a PCR reaction.
Although multiplex PCR reactions exist, generally they are not quantitative and can only detect
two or maximum three agents concurrently. The complexities of this test also make it available
only at specific laboratories with extensive experience in this assay.
DNA chips are nucleic acid-based test platforms that can address these concerns. They are
powerful tools for studying the molecular basis of interactions on a scale that is impossible using
conventional analysis. LOAC especially allows a combination of different technologies to be
used. This technique makes it possible to detect and measure the expression of hundreds and
thousands of genes simultaneously depending on the target type. Due to this powerful screening
ability, the LOAC platform has great potential to be used in clinics and hospitals to screen for
unknown pathogens based on patients symptoms.
LOAC also has a relative cost advantage over the current NAT techniques such as PCR.
Consequently, LOAC has the potential to penetrate PoC screening globally, in particular the
relatively untapped developing countries, for infectious diseases as well as disease surveillance
and the onset of new pathogens
2
PCR by Mark Bloom

10
3
Market Drivers and Constraints
Market Drivers and Constraints
Figure 3-1
Market Drivers and Constraints - Ranked in Order of Impact
Rank Driver/ Constraint Short Term Mid Term Long Terms

1-2 years 3-5 years 5-7 years
1 Increasing prevalence and types of infectious Medium High High
diseases requiring earlier screening and detection
2 Increase in disease complexity requiring early and Medium High Medium
specific diagnosis made possible by multiple target
detection
3 Advances in nanotechnology can potentially Medium High Medium
complement and better present DNA chip offerings
4. Advances in DNA chip technologies increase Medium High Medium
interest in Molecular Diagnostics
5 Development in theranostics Low Medium High
6. Universal call for new technology Low Medium High
1 Lack of standardization in practices and in clinical High High Medium

proof of efficacy hampers adoption
2 Environmental concerns Medium Medium Low
3 Lack of healthcare coverage restricts the adoption Medium High Low
as present technology platform is perceived to be
too expensive for PoC testing
Frost & Sullivan

11
Market Dri vers
Infectious Diseases - Emergence of New Diseases and Increasing Incidence
Mentioned previously, infectious diseases are one of the key causes of mortality throughout the
world. As a result of governments increasing efforts towards privatization of healthcare services,
improvement to the public health infrastructure and penetration of private medical insurance,
facilities and organizations are advocating the use of NAT technology such as Real Time-PCR
(RT-PCR) to cut costs for patients. However, rapidly rising incidence and prevalence of infectious
diseases is catalyzing the adoption of more rapid and specific tests than those offered by present
NAT technologies.
For example, in response to fears of a pandemic outbreak of avian influenza (AI), both developed
and developing countries across the world are looking to introduce screening measures.
Introducing surveillance and early detection will enable more opportunities for control of an
epidemic.
Current NAT technologies, though fast and accurate, have limited market penetration because of
their set-up costs. The prohibitively high cost of NAT technologies deters even those labs that can
potentially afford them. This has resulted in smaller labs sending samples for testing in batches.
This in turn has obliterated the speed advantage - results from PCR tests are finally received in
weeks while they were originally conceived to produce results in overnight runs.
LOAC technology, because of its portability and potential cost advantage may be able to address
this supply gap diagnosis at point-of-care. And getting accurate results quickly will vastly
change the diagnosis and treatment landscape for different infectious diseases. Currently, LOAC
devices are being developed to test for leukemia, breast cancer, stroke and other infectious
diseases and therapeutic areas.3 The emergence of new diseases such as Severe Acute Respiratory
Syndrome (SARS) and avian flu (AI) will also drive the growth of the LOAC technology market.
Increasing Disease Complexity Creates a Need for Multiple Target Testing
As a result of significant and growing interest from the venture capital and research communities,
funding initiatives such as increased government grants have been driving the growth of
nanotechnology companies. This interest and support is attributed to the fact these companies can
help in developing the ability to analyze individual DNA molecules, currently considered by
LOAC manufacturers to be very difficult. Companies such as BioNanomatrix have been
developing LOAC technologies that would allow testing facilities to standardize test samples and
3
http://www.smalltimes.com/articles/article_display.cfm?Section=ARCHI&C=Educa&ARTICLE_ID=269741&p=109

12
allow higher resolution analysis 4 . Micronit Microfluidics, a LOAC company based in
Netherlands, has also opened an office in the US in January 2009, as the interest for LOAC
technology increases in the region5.
Better Understanding of Systems Biology Creates the Need for More Specific Gene-based
Testing
The growth in systems biology requires the simultaneous analysis of multiple genes. The purpose
of systems biology is to understand how different types of biological information, such as RNA,
DNA, genes, proteins, cells and tissues interact. The method allows the analysis of thousands of
genes by hybridization to a target molecule of choice. This combined with powerful analysis
software helps scientists discover new patterns of behavior much faster.
Advances in DNA Chip Technology Increases Interest in Molecular Diagnostics
Miniaturization, automation and personalization are the key trends in the continued development
of clinical diagnostic instruments. Heightened mobility is a key influencer to these trends as more
portable laboratory instruments are introduced into the market.
Patient-specific analysis embedded in sophisticated diagnostic technologies allows physicians

increased capability for disease detection and treatment at PoC. In January 2005, Affymetrix was
certified to market the worlds first DNA chip system for clinical diagnostics, the GeneChip
3000Dx. Furthermore, Roche Diagnostics AmpliChip CYP450 test, the first in-vitro diagnostics
assay that can be run on the GeneChip system was certified alongside. This test, which identifies
genetic variations, can influence drug effectiveness and reduce the number of harmful side effects
and also lead the way for personalized medicine. Clinical applications based on genomic
discoveries are closer to mass-adoption.
Such devices and methodologies are being developed to address the drawbacks of existing
diagnosis equipment. It will enable researchers to miniaturize fluidic systems for faster and
complete DNA analysis and reduce the high costs as a result of the using smaller quantities of
samples and reagents.
Development in Theranostics
The concept of theranostics or personalized medication has been pushing the growth of PoC test
technology. Practitioners are looking for ways to provide accurate diagnosis and faster screening
4
http://www.the-scientist.com/article/display/54151/
5
http://www.azonano.com/news.asp?newsID=9620

13
in order to enable better clinical outcomes and standards of care. This will improve health
economics through optimization of prescription antibiotics, infection control practices and
reduction of patient visits to the clinic or hospital stays. LOAC technology can provide
simplified, faster, more sensitive and more specific assays, essential for the development of
personalized treatment schemes for patients.6
Universal Call for a New Technology
Research institutions and companies who are the key consumers of laboratory equipment will
drive the markets growth because these entities are the major sources of funding for research and
development. Other factors that will sustain growth in the LOAC technology market are rising
lifestyle diseases, aging population, rising healthcare needs and consumer purchasing power.
Market Co nstrai nts
Lack of Clinical Proof and Standardization Hampers Adoption
LOAC technology is still considered as novel technology in the clinical settings and not yet fully
developed. Physical effects like capillary forces and chemical effects of channel surfaces become
more dominant and make LOAC systems behave differently and sometimes more complex than
conventional lab equipment. Detection principles may not always scale down in a positive way,
leading to low signal to noise ratios7. Lack of clinical data is also a constraint for the development
of LOAC technology.
Environmental Concerns
Although more recently researchers have begun using devices fabricated from polymer substrate
as an alternative to glass, in the development of microfluidic devices other materials and
components used in the technology cause environmental concerns. Traditionally manufactured
LOAC devices are produced with silica etching which requires special resources and large
amounts of chemical solvents that pose unique safety and environmental hazards8.
6
http://www.ist-
world.org/ProjectDetails.aspx?ProjectId=2ebf3a488b3d4692a068d513e8d72b1a&SourceDatabaseId=9900e74f115848
4985c6bf0d2aa3cc2a
7
http://portal.jce.ac.il/courses/nano/Nanomaterials%20Projects/Nanothech%20and%20drug%20discovery.pdf
8
http://www.horizonpress.com/loc1

14
Lack of Healthcare Coverage Restricts the Adoption as the Present Technology Platform is
Perceived to be Too Expensive for PoC Testing
The technology is not widely available since the equipment necessary for the testing procedures is
expensive and the approval for the use of the technology is restricted by regulatory bodies such as
the FDA. Governments in countries with healthcare systems covering the costs of diagnostic and
testing procedures will not fund or invest in expensive tests if there are alternatives available. As
a result, LOAC technology companies may find it difficult to enter these markets. Currently,
LOAC devices are sold only to sophisticated Clinical Laboratory Improvement Act (CLIA)-
certified laboratories in the US. Roches AmpliChip, Tm Biosciences TAG-IT assay, Visual
Genetics TRUGENE HIV-1 and Third Waves Invader assay kit are among the few LOAC
devices approved for diagnostic use.

15
4
Industry Challenges & Opportunities
Industry Challenges & Opportunities
Challenges
Development Stage Life Sciences Companies and the Capital Markets
This year the development stage life sciences companies will find difficulty in raising capital due
to a still weak US economy, a decline in venture capitalization and increased risks in the sales of
life sciences stocks. Further product development and research will be restrained due to the
following reasons:
Bankruptcies
Job cuts to reduce costs
Reduced IPO activity especially Australia and Japan
Biotechnology companies will become more inclined to consolidation as the global

pharmaceutical industry continues to streamline operations according to cost-cutting measures
and reduce pipeline efforts.
Health care sectors in the key markets of the world including China and India are
continuously being weakened by declining government expenditures, insurance sectors and the
global financial crisis caused by the credit crunch. Adding to such challenge is the constant
migration of US and EU companies to Asia to seek more growth. With a weakened economy in
the region, these companies fail to find sufficient funding for expansion and production
activities.9
9
BioSpectrum. Nandita Singh. 09 January 2009. [url:
http://biospectrumindia.ciol.com/content/BioSpecial/10901092.asp]

16
Challenges in the Automation of Testing Procedures
More complex assays are generated with the use of microfluidics and LOAC devices, which also
enables researchers to pursue more targets simultaneously. Labor costs are being minimized and
the volumes of reagents used for tests are reduced with the use of LOAC devices. However, while
these devices are powerful, many of the automation technologies are complex both in terms of
initial design and operation. The comprehensive, fully-automated system may take a while to
commercialize.
Present LOAC Systems are Perceived as Expensive and a Deterrent to PoC and Wider
Adoption
Cost remains another concern before LOAC technology could be fully embraced in any country,
aside from quality, sensitivity and specificity issues and introduction of more portable units.
However, with governments and other concerned groups encouraging personalized medicine,
using these technologies optimally may result in lowering healthcare costs.
Opportunities
Region-specific Healthcare and Wellness Issues
The successful adoption of NAT technology in any country will highly depend on the following
factors: healthcare or wellness costs and prevalence of diseases. The inclusion of NAT
technology usage to hospital fees may certainly drive costs upward but the technologys ability to
detect and differentiate pathogens (e.g. viral hepatitis, STDs and food-borne strains) is an
advantage towards its adoption in any market.
For instance in China, tuberculosis, Hepatitis B and C and HIV are the highly prevalent infectious
diseases, becoming the prime targets for NAT adoption in the country. Infectious diseases in
developing countries are responsible for 14 to 17 million deaths each year and governments
across these countries are looking to reduce the burden of these diseases by early detection.
LOAC testing in Europe, US and Japan should focus on HIV testing, cancer and pre-natal
screening. HIV and cancer together are responsible for over 5 million deaths at present and this
is expected to grow exponentially as developed countries face the burden of an ageing populace.

17
More Favorable Regulatory Environments
Regional governments have begun to express interest in research, development and

standardization of IVD products and processes. Such initiatives promote the use of earlier and
more reliable disease information and personalization of therapeutic measures.
In 2007, the EU commenced a research initiative funded by the Seventh Framework Programme
(FP7 HEALTH 2007 1.2.5) on Detection, Diagnosis and Monitoring, SPIDIA
(Standardization and improvement of generic Pre-analytical tools and procedures for In-vitro
DIAgnostics).
New Era in Clinical Diagnostics
The successful assimilation of LOAC technology has the potential to revolutionize the field of
clinical diagnostics. While the standard infrastructure clearly defines the limitations between the
healthcare practitioner and the laboratory personnel, LOAC technology may soon blur these lines.
Physicians were dependant upon the release of test results before they could give their patients
definitive treatments. With this technology, the tests can be performed by the attending physician
and the waiting game will be drastically shortened.
This technology will also revolutionize far-reaching efforts of governments to assess the
conditions of their people, even in rural areas that are far from well-equipped laboratories. On a
global scale, healthcare missions to aid the underprivileged will also benefit from this system.

18
5 New Era in LOAC Technology
New Era in LOAC Technology
Addressable Market Gaps - Challenges with Current Practices
There are several methods of NAT using DNA amplification in present practice, such as PCR, RT-
PCR, LAMP, LCR and NASBA (See Glossary). PCR is widely used for the diagnoses of viruses
such as HIV, HBV, HPV and HCV. Additionally, PCR is practiced for STDs and has also seen use
in cancer diagnostics. Thought leaders and practitioners in the industry at present believe PCR is
the most practiced testing. That is the perceived gold standard; however there are very apparent
gaps in the technology. Evolving disease types and complexities are requiring technological
changes not only for the detection of these conditions but for a large number of other applications
which can benefit from rapid screening, increased accuracy and specificity.
Frost & Sullivan spoke with thought leaders and users of NAT. They enumerated speed, accuracy
and specificity as well as portability as the many concern areas in present practices for testing.
LOAC, which has the potential to address these concerns, will be looked at to revolutionize
screening as the industry knows it today. It will not only supplement present practices of PCR,
Southern Blot, Cell Culture and Sequencing but more importantly serve thus far unexplored areas
of PoC diagnostics, new diseases and disease specificities.
Figure 5-1
Testing Parameters- LOAC better suited to address PoC and existing
diagnostic needs
Testing Parameters PCR Existing DNA chips LOAC
1 Specificity and Sensitivity
2 Repeatability
3 Speed
4 Cost Effectiveness
5 Ease of Use & Maintenance

Note: The number of s specify intensity, i.e. cost of process is very high for PCR but lower for
LOAC, Speed is low for existing DNA chips but higher for LOAC.

19
As highlighted in Figure 5-1 above, the first three parameters are crucial for the adoption of a
testing technique in a laboratory environment. In a PoC setting, the additional parameters of cost
effectiveness and ease of use are equally important. Clearly, the advantage of LOAC in being able
to cover the full spectrum of parameters will differentiate this technology and effectively bridge
the distance between present laboratory practices to a PoC setting as depicted in Figure 5-2
below.
Primary research with thought leaders and users of NAT revealed that for techniques such as PCR
and existing DNA chips, testing parameters such as specificity, sensitivity, overall costs and
repeatability are areas that users are less satisfied with. They perceive that the testing technology
should be faster, more sensitive, more accurate, as well as repeatable. More importantly they
believe that if the cost and ease-of-use factors can be incorporated into testing techniques, it will
open doors into the vast PoC market and herald a new era of human diagnostics.
Figure 5-2
Testing Parameters that can bridge the Laboratory to PoC gap
Test Significance
Specificity, Sensitivity, Repeatability, Speed
Laboratory Testing
Healthcare Point of Care
Pharma & Biotech Testing
Academic and Government
Ease of use and Maintenance

Cost of Practice Practice Significance
Developments in LOAC Technology
Assay Development
Signal amplification technology is one of the most significant advancements in IVD technology.
Use of enzyme-mediated chemiluminescence expands the industry dominated by fluorimetric or
colorimetric systems. Chemiluminescence improves assay sensitivity and the ability to achieve
larger dynamic ranges, up to six orders of magnitude.
Developments in this area are driven by the shortage of skilled laboratory personnel and ongoing
efforts towards reduced healthcare costs, leading to the continuous introduction and use of more
efficient and reliable assay systems. New biomarkers are expected to be introduced in the market

20
as genomics and proteomics continuously revolutionize diagnostic instruments (e.g. companion
diagnostics).
LOAC in Drug Discovery

The use of microfluidics and LOAC devices is changing the face of drug discovery and clinical
diagnostics. Laboratories and research facilities of drug companies have concentrated resources
on high throughput screening (HTS) which is used to search for large numbers of potential drug
candidates for activity against specific pathogens. However, the new concept of high content
screening (HCS) is emerging. This involves the similar usage of high productivity techniques but
involves the automation of information-rich biological assays for the discovery and validation of
new drugs10. As a result, the industry focus will shift from the volume of compounds that are to be
screened to the analysis and actions that end-users can utilize based on such information.
T he Ra ce i n L OAC T echnol ogy Devel opment

There is a rush to develop LOAC in order to simplify disease diagnosis. Miniaturization of NAT
technologies onto a chip includes micro-PCR systems, DNA chips as well as other technologies.
Currently, the most potential is seen in the development of small arrays with multiplex reaction
capabilities for the rapid diagnosis of cancer, mutations and other infectious diseases. Scientists
are also looking at the enhanced homogeneity, signal intensity and selectivity of LOAC
technologies for the diagnosis of DNA and SNP as well as gene expression.
As a result of the success of LOAC technology, physicians will be empowered most to address
the changing needs of their patients. With increasing technology, diseases are better understood,
revealing an underlying complexity that can only be diagnosed at a genetic level. With the help of
LOAC, physicians are given the means of identifying the specific class of a disease and the drug
response profile of their patients which can help in the design of a more responsive treatment and
increased chance of recovery.
Advantages of a Novel LOAC System

There is currently a need for an affordable, sensitive and rapid test, which is easy to perform, can
be used in laboratories with very little experience or no experience in molecular biological
methods LOAC technology is positioned to address this gap.
Specificity and Accuracy: In this age and time, diagnosis is no longer about whether a person is
suffering from a disease or not but what specific sub-type of disease it is. The multiplex reactions
10
http://www.hbs-consulting.com/HBSQuarterly/hbsq5a3.asp

21
in an LOAC platform will not only create new opportunities but also supplement existing
diagnostic techniques in determining disease complexities.
Speed: LOAC is perceived to provide faster results and more throughput as compared to
conventional NAT such as PCR. The aim of LOAC technology is to automate standard laboratory
processes, making it fast and cost efficient. This new technology will hasten diagnosis and
screening by allowing multiplex reactions to be performed simultaneously an advantage for
detection of multiple pathogens or multiple pathogen mutations in a single chip.
Repeatability: One of the key issues with existing DNA chip technologies has always been
obtaining repeatable results. Another perceived advantage of LOAC is the ability to use digital
data hence addressing concerns of repeatability, which in the research and clinical setting is of
utmost importance in the present fluid healthcare provision setting.
Over and above the advantages listed here, the LOAC technology for diagnostic testing aims to
bring together the different steps in a laboratory setting onto one chip. Because of the simplified
process, even physicians can easily perform the tests at PoC, negating the necessity for sending
samples to high-tech laboratories and waiting for days for the results.
It will also positively impact reagent consumption and waste, leading to a reduction in cost per
analysis following the adoption of the technology in laboratories and hospitals. LOAC technology
provides higher data quality, better controllable process parameters and increased resolution of
separations.
In the following section of the paper, Frost & Sullivan examines and analyzes one particular
company with an LOAC technology that offers many solutions to the current challenges
faced in the market and has been able to take this technology to the next level.

22
Introduction to Hai Kang Life and the
EFADchip Technology
T he Co mpa ny
Hai Kang Life Corporation Limited (HKLife), formerly known as Hong Kong DNA Chips, was
established with independent research funding in 1999. The company is strategically positioned at
the hub of Asian biotechnology, equipped with the most advanced research and production
facilities in both Beijing and Hong Kong. Strong working relationships with academic
institutions, government and industry partners have created a solid foundation for business
success. The world-class team of scientists, engineers and technologists, supported by a highly
esteemed Scientific Advisory Board, is committed to maintaining HKLife at the forefront of bio-
business, leveraging best practices from both East and West.
Company Founder, Chairman and CEO, Professor Albert C. H. Yu is a renowned

neuroscientist and bio-entrepreneur. Educated in North America, Professor Yu is the Vice-
Director of the Neuroscience Research Institute, Professor of the Department of
Neurobiology and also a Professor at the Infectious Disease Center at Peking University.
His broad cross-cultural experience base and active involvement in both the academic
and business environment has led to the strategic vision behind the success of the HKLife
team.
Chief Operating Officer and General Manager, Dr Terence L. T. Lau is the driving force
behind the Hai Kang Life Corporation and its subsidiaries. Dr Laus accumulated success
and achievements in both academia and bio-commercial endeavors continues to bring
HKLifes vision closer to fruition. Specializing in molecular biology, Dr. Lau has more
than 10 years experience in commercializing biotechnology and developing bio-business
in Asia.

23
Operating through a portfolio of wholly-owned subsidiaries, existing technology platforms are
focused on the provision of DNA-based advanced diagnostic tools and ISO accredited services
for clinical testing, veterinary application and food safety. HKLife has received international
recognition for its rapid and accurate response to recurring outbreaks of avian influenza (AI),
foot-and-mouth disease (FMD) and Severe Acute Respiratory Syndrome (SARS), enabled by
established relationships with government health and agriculture agencies throughout Southern
Asia and the Middle East.
The Vision
HKLife is developing advanced and exciting new products utilizing DNA-based technologies and
leveraging a unique business model that is feeding their vision to be the worlds leading
molecular diagnostics company. This vision incorporates the development of its novel EFADchip
technology into a fully-functional platform that will revolutionize the practice of clinical and PoC
diagnostics and establish HKLife as a prominent player in driving Asia into the globally
competitive biotechnology arena.
The HKLife Technology

In the clinical setting, practical examples of LOAC technology and PoC diagnostics are proving
to be highly elusive, with most applications aimed at high-end research tools.
EFADchip patented technology uses electric field-assisted DNA hybridization to accelerate the
detection of biological samples on a single chip. The key differentiator of this technology is the
use of a dielectric material for both electric field generation and capture probe DNA
immobilization, thus avoiding adverse electrochemical effects that can lead to reduced sensitivity
and accuracy of detection. The EFADchip is fabricated using widely available materials and
common photolithographic techniques well known in the miniaturized electronics industry and
resulting in a structure that is inherently stable under varying ambient conditions.

24
Advantages and Applications of EFADchip Technology
This platform has the potential to revolutionize clinical diagnostics practices, by providing a cost-
effective solution for PoC applications and the potential for individualized medicine. HKLifes
EFADchip:
Uses novel technology to accelerate the migration of DNA to the reactive sites within the
chip, thereby enabling rapid, sensitive and specific hybridization in minutes without the
undesirable impact of electrochemical reactions
Employs a signal detection system that does not require fluorescence, having a
substantial impact on the present cost parameters where complexity of detection
equipment is a significant deterrent for wide-spread adoption
Has the potential to be customized for specific market applications including the full
spectrum of molecular diagnostics, drug discovery, bio-security and forensics
Is not limited to human application and is suitable for a variety of veterinary, food safety
and environmental needs, either in remote areas or the industrial setting
Will provide an easy-to-use, portable and low-cost detection solution, enabling rapid
throughput screening for simple or multiple dangerous diseases, a precursor to a bio-
radar surveillance system
Addressing a Global Need - Taking LOAC to the Masses

It is an exciting future for the LOAC platform, as key industry players recognize the
comprehensive benefits of this technology. Researchers and developers are racing to
commercialize a variety of LOAC flavors within a highly competitive arena. Clearly, there are
markets ripe for growth within both the developed and developing countries. Whether the
opportunity lies within the laboratory setting, the comfort of the medical practitioners office or
the harsh reality of the remote rural location, most definitely the need exists. The new generation
of LOAC technology will provide flexible multiplexed platforms that address the critical
performance parameters. High throughput, sensitive and selective instrumentation with low cost
of ownership and minimal training requirements will revolutionize the practice of clinical
diagnostics.

25
Figure 5-3
HKLife EFADChip Cartridge
Courtesy: HKLife
Companies like Hai Kang Life Corporation Limited (www.haikanglife.com) are at the cutting
edge of this revolution. In contrast to the current highly specialized markets for the more
comprehensive research tool, the portfolio of opportunities for LOAC is looking very promising.
The need is here and now and the social benefits of delivering diagnostic tools for the people
cannot be ignored any longer.
We believe EFADChip technology is expected to revolutionize the practice of

clinical diagnostics, providing effective platforms for point-of-care applications
focused on personalized medicine. This technology also has the potential to
penetrate the market for surveillance of emerging pathogens and diseases, Frost &
Sullivan

26
Glossary of Terms and Definitions
Cell-Culture
Animal or plant cells, removed from tissues, will continue to grow if supplied with the
appropriate nutrients and conditions. When carried out in a laboratory, the process is called Cell
Culture. It occurs in vitro (in glass) as opposed to in vivo (in life).
Complement Fixation Test (CFT)
The test quantifies complement-fixing antibodies to a range of antigens.
DNA Chips
This is a technology that enables massively parallel analyses by densely arranging tiny samples
on a glass chip or other solid surface. DNA chip technology is beneficial because it reduces the
amount of sample and reagent required, reduces reaction times and increases the amount of data
available from a single assay. Furthermore, through the use of different labels such as multicolor
fluorescent tags, multiple tests can be conducted on the same array.
Disease Acronyms
Human Immunodeficiency Virus (HIV)
Hepatitis B Virus (HBV)
Hepatitis C Virus (HCV)
Human Papillomavirus (HPV)
EFADchip
The EFADchip is a novel and patented LOAC technology which has been developed by Hai Kang
Life Corporation Limited.
Enzyme-linked Immunosorbent Assay (ELISA)
ELISA detects and measures an immune response in a solution. The presence of antigens or
antibodies is verified and visualized with an application of tagged antibodies. It is generally less
sensitive than nucleic acid-based amplification techniques.
In-Vitro Diagnostic (IVD) Technologies
IVD is a testing technology used to facilitate medical diagnosis and monitor treatment efficacy.
These tests refer to the technique of performing a given procedure in a controlled environment
outside of a living organism.

27
Lab-on-a-Chip (LOAC/LOC)
A lab-on-a-chip (LOAC/LOC) is a device that integrates one or several laboratory functions and
concepts on a single chip of only millimeters to a few square centimeters in size. It is literally the
miniaturization of a laboratory. The LOAC/LOC deals with the handling of extremely small
fluid volumes down to less than pico liters. It has the potential to combine technologies such as
microfluidics, PCR DNA chips and more with semi-conductor processing to analyze multiple
sample and screen with increased specificity.
Microfluidics
Microfluidic platforms are utilized to widen the current portfolio of analysis and control
methods in biochemical systems, exploring single cell and single molecule biophysics,
miniaturizing and making chemical assays more portable and allowing minimal reagent use. The
application of microfluidics facilitates the development of LOAC systems.
Nucleic Acid Test (NAT)
A NAT test is a biochemical technique used to detect a virus or a bacterium. These tests were
developed to shorten the window period, a time when a patient has been infected and when they
show up as positive by antibody tests. NATs have also been used to screen for genetic diseases
and confirm onset of cancer, Parkinsons Alzheimers, etc.
Examples of NAT are Polymerase Chain Reaction (PCR), Ligase Chain Analysis (LCR) and
Nucleic Acid Sequence-based Amplification (NASBA).
Nucleic Acid Sequence-based Amplification (NASBA)
NASBA is considered as an alternative to PCR that selectively amplifies RNA and DNA through
continual amplification at a constant temperature.
Personalized Medicine
A young and rapidly advancing healthcare field, personalized medicine that allows diagnosis and
treatment plan formulation based on a patients unique clinical, genetic, genomic and
environmental information. It allows physicians to predict accurately based on their patients
susceptibility of developing disease, the course of the disease and response to treatment.
Point-of-Care (PoC) Testing
The analysis of clinical specimens as close as possible to the Patient, including bedside, ward
unit, or regional response labs that service specified areasfor example, the ER or ICU
Diagnostic testing that is performed near to or at the site of the patient care with the result
leading to possible change in the care of the patient

28
Polymerase Chain Reaction (PCR)
PCR is a technique that allows the rapid cloning of DNA in a test tube, making the production of
million copies of a single DNA molecule despite being initially present in a mixture of different
DNA molecules in approximately two hours. On the other hand, Reverse Transcription-/Real-
Time Polymerase Chain Reaction (RT-PCR) is used to quantify mRNA levels from much
smaller samples. It has become the most preferred method for the validation of array analyses and
other techniques used for gene expression changes.
Sequencing
It is the process of determining the exact order of the 3 billion chemical building blocks (called
bases and abbreviated A, T, C, and G) that make up the DNA of the 24 different human
chromosomes.
Serum Agglutination Test (SAT)
Tests for agglutinating antibody in a tube-based test, where clearing of the tube due to
agglutination is used to determine an endpoint.
Southern Blot
It is used to verify the presence or absence of a specific nucleotide sequence in DNA from
different sources and identify the size of the restriction fragment containing the sequence.
Synthetic Gel Diffusion Precipitin Test (GDPT)
Specific antibodies are detected by placing test and control serums in a gel.
Theranostics
Several definitions of theranostics can be found in literature:

1. individualized/personalized medicine (pharmacogenetics);
2. system for transfer of diagnosis from the lab to the point of care (fast in-chip tools);
3. application of particles or devices with dual use (release and imaging), i.e. new kinds of
drug delivery; and
4. system combining diagnosis, therapy and monitoring.

29
Appendix
Clinical Laboratory Improvement Act (CLIA)
CLIA is a US enactment that mandates the accuracy and reliability of all laboratory testings,
extending Federal legislation to all hospital, independent and physician office laboratories that
handle human specimens for the diagnosis and treatment of disease or health assessment of
human beings. Tests under CLIA are those conducted on blood, urine and other samples for the
detection of cancer, HIV, diabetes and others.
This law establishes the quality standards for laboratory testing and accreditation for clinical
laboratories. In-vitro diagnostics that are commercially marketed are within the jurisdiction of the
US Food and Drug Administrations (FDA) Center for Disease Control (CDC) that is responsible
for the review of test systems, assays or examinations not commercially marketed as IVD
products.
Hai Kang Life Corporation Limited
For more information on HKLife and EFADchip Technology please:

Visit www. haikanglife.com
Or send a request for information to info@haikanglife.com
Or call at (852) 2111-2123

30

White Paper

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

White Paper

Uploaded by

Copyright:

Available Formats

The Opportunities and Future of Lab-on-A-Chip

2009 February Frost & Sullivan

The market research was completed in January 2009.

2009 Frost & Sullivan.www.frost.com

Terms and Conditions

1. In-Vitro Diagnostics Market

2. Major Application Areas

3. Market Drivers and Constraints

4. Industry Challenges and Opportunities

5. New Era in LOAC Technology

Introduction to Hai Kang Life and EFADchip Technology

Glossary of Terms and Definitions

2009 Frost & Sullivan.www.frost.com

For further information, please visit us at www.frost.com or email at apacfrost@frost.com

2009 Frost & Sullivan.www.frost.com

2009 Frost & Sullivan.www.frost.com

2009 Frost & Sullivan.www.frost.com

The DNA Chip Market

DNA Chip Market

Source: Frost & Sullivan

Human Diagnostics Diseases and their Prevalence

2009 Frost & Sullivan.www.frost.com

Top Causes of Death, Communicable Conditions (Global)

1 Lower respiratory infections

Source: WHO, Frost & Sullivan

Top Causes of Death, Non-communicable Conditions (Global)

Source: WHO, Frost & Sullivan

2009 Frost & Sullivan.www.frost.com

Conventional vs. Nucleic Acid Test (NAT) Techniques

The earlier generations of diagnostic tests such as serology-based ELISA (Enzyme-Linked

2009 Frost & Sullivan.www.frost.com

Conventional vs. NAT Diagnostic Techniques for Infectious Diseases

2nd Generation Diagnostics NATs

3rd Generation Diagnostics NATs

Enhancement of testing parameters such as speed, sensitivity and ease of use

2009 Frost & Sullivan.www.frost.com

The LOAC Advantage

2009 Frost & Sullivan.www.frost.com

Market Drivers and Constraints - Ranked in Order of Impact

Rank Driver/ Constraint Short Term Mid Term Long Terms

1 Lack of standardization in practices and in clinical High High Medium

2009 Frost & Sullivan.www.frost.com

Infectious Diseases - Emergence of New Diseases and Increasing Incidence

Increasing Disease Complexity Creates a Need for Multiple Target Testing

2009 Frost & Sullivan.www.frost.com

Advances in DNA Chip Technology Increases Interest in Molecular Diagnostics

Patient-specific analysis embedded in sophisticated diagnostic technologies allows physicians

2009 Frost & Sullivan.www.frost.com

Universal Call for a New Technology

Market Co nstrai nts

Lack of Clinical Proof and Standardization Hampers Adoption

2009 Frost & Sullivan.www.frost.com

2009 Frost & Sullivan.www.frost.com

Development Stage Life Sciences Companies and the Capital Markets

Job cuts to reduce costs

Reduced IPO activity especially Australia and Japan

Biotechnology companies will become more inclined to consolidation as the global

2009 Frost & Sullivan.www.frost.com

Region-specific Healthcare and Wellness Issues

2009 Frost & Sullivan.www.frost.com

Regional governments have begun to express interest in research, development and

New Era in Clinical Diagnostics

2009 Frost & Sullivan.www.frost.com

Source: Frost & Sullivan