Results Positive

CellNetix histology lab
technicians Karen Pilarc and Victor Atencio scan surgical tissue blocks to
create bar-coded slides. A recent study says the use of bar codes reduces
overall lab misidentification cases by 62 percent.

Amid today’s fevered discussions about health care, there is
much debate about HMOs and flexible spending accounts. However, little is
mentioned about the nuts and bolts of the vast laboratory systems that help
determine a patient’s diagnosis.

In Washington state, two laboratory organizations—CellNetix
Pathology & Laboratories in Seattle and Pathology Associates Medical
Laboratories (PAML) in Spokane—are using economies of scale and new technology
to streamline the testing process and produce more accurate results.

Formed in 2005 through a merger of three different pathology
groups—Black Hills Pathology (Olympia), Associated Pathology (Everett) and
Washington Pathology Consultants (Seattle)—CellNetix is a network of 44
board-certified pathologists who are trained in 29 areas of sub-specialty
expertise. The company—actually two entities, an LLC that serves as the lab and
a PLLC partnership of pathologists working for CellNetix—focuses on anatomic
pathology, or testing of tissue samples, such as biopsies, to check for cancer.

The company’s depth of experience allows CellNetix to
provide faster, more accurate diagnoses than conventional national labs. Saving
time can dramatically reduce overall costs of care, as well as administrative
and physician workload, says Dr. Don Howard, chairman of CellNetix.

“Labs costs are only about 10 to 15 percent of a hospital’s
budget,” Howard explains. “But these tests have a multiplying effect and can
affect about 60 to 70 percent of future health care decisions down the road.”
Malpractice costs have also been driven down under the CellNetix system, he
adds, and litigation is now extremely rare for their clients. 

In 2007, CellNetix opened a 48,000-square-foot pathology and
laboratory facility in downtown Seattle, where most of the testing is conducted
for nine hospitals across western Washington. The network’s instant electronic
records access and automated bar-coding tracking systems help reduce errors,
making it easier for physicians to serve patients quickly, Howard says.

On the other side of the state, Spokane’s PAML has adopted a
similar regional approach to its clinical pathology testing, which mostly
involves blood tests. As the largest reference lab in the Northwest, PAML is
able to make quick turnarounds and faster diagnoses, thus decreasing the price
of care through increased volume, says Rosalee Allan, senior vice president and
chief operating officer of PAML.

“Hospitals have labs now that have to operate 24/7 to serve
their patients,” Allan says. “They’re considered a cost center.” PAML’s
solution, she notes, is to form joint partnerships with hospitals for greater
efficiency. So far, PAML has developed five hospital partnerships: PacLab in
the Puget Sound region; Tri-Cities Laboratory in central Washington; Alpha
Medical in Coeur d’Alene; Treasure Valley in Boise; and last year, MountainStar
in Salt Lake City.

These hospital networks, Howard of CellNetix says, also help
prevent the spread of “self-referential labs,” in which doctors use their own
unregulated in-house clinics to conduct lab testing. Under such arrangements,
where physicians get paid at multiple points, there is an economic incentive to
order unnecessary tests, which can drive up costs.

Howard has assumed the duties of CEO at CellNetix on an
interim basis since late March, when the laboratory’s previous CEO, Caitlin
Cameron, stepped down suddenly due to personal reasons. Howard says the
shake-up has nothing do to with the financial health of CellNetix, which he
says is strong. A permanent replacement for Cameron will most likely take place
in the next six to 12 months, he adds.

In fact, both CellNetix and PAML are proving remarkably

“We’ve had to modify our growth rate downward, but there’s
still definite growth expected in 2009,” Howard says. This year, CellNetix will
add molecular diagnostics and flow cytometry to its testing menu, as well as
expand its immunohistory and papiloma virus testing.

Compared with the same period last year, Allan says, the
number of test requests at PAML are up by 10 percent. The Puget Sound region’s
PacLab, she adds, will be hiring 30 to 40 people this spring. “Everything is
telling us we should see less business,” Allan says. “But we’re still breaking

Inspired Innovation at Fred Hutch

Inspired Innovation at Fred Hutch

Using the natural defenses of plants and animals, Dr. Jim Olson and his team engineer proteins to attack the most treatment-resistant malignancies.

On the fifth floor of the Fred Hutchinson Cancer Research Center in Seattle, Dr. Jim Olson and his team are training a robot to process and purify hardy peptides known as knottins, some of which are natural compounds made by plants and animals as diverse as sunflowers and scorpions.

The robot will be capable of churning out work at 50 times the speed of Olson’s best scientists. Olson, a neuro-oncologist at Seattle Children’s Hospital, walks fast, talks fast and carries a big ambition because of the young cancer patients he has known. He once lost an 11-year-old patient named Violet to brain cancer. That experience inspired him to create Project Violet, which raises money for his laboratory’s work at Fred Hutch.

Olson believes knottins can be engineered into therapies that may help thousands of patients to avoid Violet’s fate. He aims to use them not just for brain cancer, but also for Alzheimer’s and other neurodegenerative diseases and maybe even arthritis.  

The reason he sees such a big therapeutic landscape for these compounds has to do with their folded and knotted shape — hence the coinage “knottins.” Their knotted shapes allow them to go places in the human body where other drug therapies can’t easily reach. Olson proudly wears on his upper arm a simplified tattoo shaped liked one of his favorite knottins.

Olson is probably best-known for having invented Tumor Paint, a product that uses the capability of scorpion venom to cross the blood-brain barrier and bind to cancerous tissue. As noted in the September 2012 issue of Seattle Business, he hitched that protein to what he calls a molecular flashlight, a dye that fluoresces when exposed to near-infrared light. 

The clinical version of this paint, BLZ-100 Tumor Paint, won designation from the Food and Drug Administration in 2014 for use on brain tumors. When injected into a patient, the engineered molecule travels to the tumor and makes it glow so surgeons can see its precise boundaries. BLZ-100 is slowly working its way through clinical trials and is being developed by Blaze Bioscience, a private company cofounded by Olson. Recently, Blaze published in the medical journal JAMA a report about research on mice that shows BLZ-100 may eventually be helpful for treating head and neck cancers. 

While working on Tumor Paint, Olson became convinced his team could engineer other knottins for human therapies. Different knottins travel to different parts of the body. Some can cross the blood-brain barrier, making them potentially useful for delivering drugs to the brain, but others have distinct characteristics that allow them to avoid being destroyed by stomach acid and human enzymes. One he has studied in mice travels to the joints, and he imagines hitching a pain reliever to it as an improvement on oral medications for arthritis.

Pharmaceutical companies have known about knottins for years. For a variety of reasons — including the inability to grow them easily in yeast or bacteria, the typical laboratory workhorses — they have been unable to tap their power. Olson discovered he could replicate the proteins by “growing” them inside human kidney cells, a crucial breakthrough. Olson’s team changes the proteins, in some cases giving them payloads to kill cancer cells. Once engineered, they are called optides — an optimized peptide.

Olson’s lab at Fred Hutch has a staff of about 30. He declined to say specifically how much money it spends in a year but described it as similar to a biotech company that might spend $5 million in a year’s time. It occupies about 40,000 square feet. 

The laboratory robot, which cost about $750,000, was custom designed to enable Olson’s lab to generate, process and purify more knottins. An expert scientist might be able to process 10 molecules per week. The robot can produce 500 in the same time.

The idea for the robot came as Olson was talking about his work with a software executive. “He asked me: ‘What is your pain point?’” Olson remembers. Olson, who loves borrowing strategies from software engineering or the tech sciences and applying them to medical research, says automating the process of growing and purifying new compounds struck him as a “pain point” he could target.

That “aha” moment occurred two years ago; the robot arrived earlier this year. By the end of the year, the lab hopes to have a library of 10,000 optides, which will give scientists a far better chance of finding one likely to attach itself to a target of interest, such as a particular lung cancer cell.

Department of Arts and Sciences

Jim Olson likes his team to draw inspiration from art and music. He invited his team to try glassblowing at the Museum of Glass in Tacoma, and their product — some lavender teardrop shapes — hang in the laboratory window in honor of Project Violet.

Two years ago, Olson decided to produce a folk-pop CD — The Violet Sessions — featuring local artists Hey Marseilles, Noah Gundersen, Ben Fisher, Le Wrens, OK Sweetheart, Naomi Wachira and St. Paul De Vence. The crowdfunded project helped raise more than $10,000 for the Olson lab’s research. The CD is still available online and the music can be downloaded via iTunes.

“Creativity is dulled by meetings and piqued by novel experiences,” Olson observes. This appreciation of creativity has been particularly helpful in generating fundraising ideas that are crucial to the success of his laboratory. For example, lab employees came up with the idea of carnival games to help attendees at a recent fundraiser understand the fundamental science taking place. They created an optide bean bag toss with bags of different sizes representing a range of drug candidates. These “drug candidates” had to be tossed into containers of varying sizes that represented the drug targets, such as assorted cancer cells. The event raised more than $500,000.