Episode 1: Investing in high-quality reagents and stress-testing validations (Part 1 with Dr. Scott Kephart, Quasar Instruments)

00:00 Welcome and Guest Intro
01:03 Meet the Hosts
01:34 Dr. Scott Kephart – Quasar Mission and Model
02:48 Claire Collins Background and Industry Shift
04:12 Small Labs and Pain Points
05:55 Instrument Downtime and Bottlenecks
07:13 Enzyme Evolution and IMCSzyme Impact
10:00 POL Setup and Robust Methods
12:08 Capacity Planning and Variable Control
14:58 Audits and Validation Philosophy
18:19 Cost of Quality and Clawbacks
22:45 Validation Support and Training
26:38 Choosing Clean Enzymes Wisely
29:41 Price Per Sample and Stress Testing
32:32 Part One Wrap Up

Dr. Andrew Lee: [00:00:00] Hey there. I’m Andrew Lee, co-founder and Chief Scientific Officer at IMCS. Welcome to our podcast series, Imagine More, Create Solutions.

In this episode, Claire Collins, our Director of Sales at IMCS, and I will host a special guest from Quasar Instruments. We have their president, Dr. Scott Kephart, joining us. Quasar Instruments has a stellar reputation for optimizing laboratory management and fine-tuning diagnostic methods for all types of laboratory setups.

Drawing on their expertise, we’ll delve into the importance of investing in and selecting the right reagents. We’ll discuss today on how things such as these reagents can affect turnaround times, instrument downtime, laboratory operations, and overall laboratory return on investments. You see, it’s more than just data at stake.

Ultimately, it’s about the patients. Alright, let’s dive in.[00:01:00]

Hi, my name is Andrew Lee. I’m the co-founder, and I oversee the R&D department of IMCS. IMCS manufactures and provides a key reagent called IMCS or IMCSzyme RT. This enzyme is a beta-glucuronidase, highly purified, highly efficient. And this reagent is a critical component of urine drug testing.

I’ll be kind of coordinating this podcast or this Zoom session, and here we have Claire Collins and Scott Kephart. Let’s just do short introductions here. We’ll start with Scott.

Dr. Scott Kephart: Hello, Andrew and Claire. I’m Scott Kephart, founder and uh, president of Quasar Instruments. In essence, we help customers get started in urine drug testing.

We basically set up LC-MS instruments for confirmation testing. I think what sets us apart is our understanding that long-term success in the lab business requires more than just focusing on laboratory operations. We realize that long-term success requires attention. [00:02:00] Again, not only laboratory operations, but you also have to pay attention to the payer and legal requirements, and then you have to work within those two frameworks and make a sustainable business model out of it. All that, laboratory operations, the payer, all that has to be done in a patient-centric sort of way for the long-term success. So the pathway to success for the labs can be a balancing act for them, and we kind of understand all three areas of that and kind of bring it all together.

Andrew: It’s pretty interesting. I mean, we only, from IMCS perspective, we only provide a small component of it, the purified enzyme. Before I jump any further. There’s Claire Collins. She used to direct a lab, mind making an introduction?

Claire: Hi, I’m Claire Collins. I’m the Director of Sales for IMCS. I have over 23 years of experience in the pain care testing industry.

I helped to grow a major pain care lab from a [00:03:00] thousand confirmation tests per week to over 10,000 a week. That’s about 1700 samples a day. We had about 7 LC-MS/MS instruments and 4 large automated liquid handling systems. And I just want to go a little bit over the history of pain care testing. As it’s evolved, laboratories are now competing with each other with very, very low cutoffs and very fast turnaround time, creating the need for more sensitive instruments, precise methods, and highly trained staff.

And this requires high-quality reagents to provide fast and accurate results.

Andrew: You mentioned an important part, and I think it’s covered by Scott as well as Claire, is good practices, right? You’re not only paying attention to the payments and the quality of reagents, but really the general good practice of operations, whether you’re a small operation or a large [00:04:00] operation, you need to pay attention to some of these details.

So, Claire, you mentioned an interesting point from the large-scale operation side where you’re running thousands of samples a day. But then I guess for Scott, you’re providing more of an interface for these physician-operated labs, right? Or these smaller operations or people who are trying to enter into this, urine drug testing, and what sort of pain points should they be aware of?

Scott: Yeah, and Claire made some interesting points, and she talked about the cost of quality, and there’s an interesting divergence or similarity between these very high-throughput labs. We’ve also helped set up some high-throughput labs. Our bread and butter is mostly the POL, smaller POL’s.

But, you know, Claire talked about these high-throughput labs. Their focus is on turnaround time. Keep the system running, keep the production running. In [00:05:00] order to do that, they’re dependent on high-quality products. And, I too will get into the cost of saving money, if you will.

What we found interesting is when we’re setting up these smaller POLs, labs like Claire would use the high-quality products to meet their turnaround requirements to push through a lot of samples. We have the same requirements for products. The difference is we use that product feature, if you will, as a mechanism to simplify the process.

So in these small labs, they may only be processing 20 samples a day. But they’re doing it with inexperienced staff. They’re doing it with staff that has other duties. Anything that disrupts or creates difficulty for them greatly impacts the productivity of the lab and causes a fairly substantial hiccup for them.

Andrew: That’s an interesting point because you know, these detection instruments, I mean, Claire mentioned LC-MS/MS. [00:06:00] These are triple quad liquid chromatography instruments, very expensive, very high-end analytical instruments. Most of the time, we see these in academic labs for graduate students and postdoctoral fellows.

These guys are doing their doctoral dissertations with these instruments. But for the pain care management side, you want to be operating in a very smooth, maintained, day-to-day operation without needing to hire doctoral degree candidates. Right?

Scott: Yeah.

Andrew: So, how do you maintain this tight set of operations with rapid turnaround times, with quality turnaround, and data output?

For those who are not analytical chemists by training, right? So if the equipment fails or you need repeated runs, those are potential huge delays, especially for small operations and even for large operations. If you have a half-million-dollar instrument down. What are you going to do, and how do you prevent all that?

And how do you maintain a tight operation? [00:07:00] Claire, you mentioned some of the risk factors like reruns or failed equipment. I mean, those are some of the simple ones. How did IMCS help in that regard?

Claire: So, you know, I’m going to go back in time. Let’s talk about, for the longest time, I’m not sure how long, but from the beginning of toxicology testing, we had what we call a crude beta-glucuronidase. It was a brown, nasty-smelling liquid that you sometimes heated for a few hours to break the glucuronide bond from the analyte that you wanted to detect. After that, we saw a purified beta-glucuronidase, which is basically a filtered crude enzyme.

Now IMCS came out with this brand new product, a genetically modified enzyme. This was pure beta-glucuronidase, so [00:08:00] that affected the cleanliness of our instruments. My instruments, I would have to change the pre-column filter daily and remove all the black stuff that came from the enzyme, and the column, I’d have to change at least every two days. So the column clogging was a lot.

And then the other thing that was occurring was samples that didn’t correlate with their screening results. So you get very high screening results, but then when you hydrolyze them and ran them through the mass spec, the results are very low.

So we didn’t know why that was occurring. So normally, what we would do is just dilute, dilute, dilute. And then we’d rerun it, and we’d get a result, and we’d multiply it, which is not very accurate. Well, come to find out, with IMCSzyme, recent data has shown that there are inhibitors to beta-glucuronidase, so [00:09:00] we would see at least one out of a hundred samples that we’d have to dilute, dilute, dilute, and spend time on that.

Also, with column clogging, sometimes your column would clog in the middle of a run, and if it’s a 12 to 24-hour run, depending on your analytical runtime, you’d have to shut down, clean your instrument, and restart again. So, normally, people don’t have extra LC-MS/MS instruments lying around, so you create that bottleneck.

I remember one time we had a bottleneck of two weeks by using poor-quality reagents.

Andrew: Scott, I mean, these are technical aspects that you guys are facing, just the overall operations of a pain care lab. Do you want to kind of elaborate on some of these technical aspects or bring it down to kind of the essence of it? Some of the struggles? [00:10:00]

Scott: Yeah, I was hearing Claire talking and cringing at replacing guard columns daily and always replacing the columns. When we set up a customer, they are extremely nervous. Our typical customer has zero LCMS experience and, when things don’t work, they get very nervous. So just cringing at the, if we had to throw those variables at them.

It would be catastrophic, I think, for us. But you had talked about how consistency and reliability are critical. When we bring up a POL, our philosophy and our success, and kind of, I guess, our niche is: we set up customers to be independent, and doing that, we give them control over sample processing.

We give them control over data review. It’s about a 12-month knowledge transfer that we go through to get them standing on their own two feet, and that requires a lot of work in order to succeed at that. We develop entire processes around quality products, [00:11:00] methods that are designed for robustness, not designed for speed.

Because we, you know, kind of, our philosophy is, we maximize instrument usage. In Claire’s labs, instrument usage is pushing samples through. For us, instrument usage, if we’re only running 30 samples a night, if the instrument shuts down at 2:00 AM because we have a fast method on, it’s not helping the customer.

So we slow things down, we spread things out, we make things robust for them. So we finely tune each of these instruments. The struggle for a POL is that, on the one hand, they have to produce the same high-quality, consistent results. That’s non-negotiable. The patient data that a lab outputs has to be of the same standard.

Whether you’re a lab doing a million samples a year with PhD-level staff, or you’re a POL with somebody that is inexperienced, the results cannot be sacrificed. So we have to achieve the same end result with inexperienced staff. And as Claire [00:12:00] kind of said, when you have one instrument, things get complicated.

It was interesting with the turnaround time. I always get asked in the sales process, you know, what’s the capacity of the instrument? And I have to educate people that maxing out the capacity of your instrument is directly related to your turnaround time. And it’s kind of a new concept for them.

When people buy a half-million-dollar piece of equipment, they want to maximize usage. When they ask me, you know, how much usage I get from this instrument, I usually tell them to operate at 50% capacity. And customers look at me like, ‘What are you saying?’ We have examples, and we have engines to model this. But if you operate a lab, and you only have one mass spec, if you operate at 90% efficiency, when one of a multitude of things happens, and that instrument goes down overnight, it takes you nine days to catch up because you only have 10% extra bandwidth per day. You’re down for two days. It’s 18 days to catch up.

How we kind of found our success [00:13:00] is, we very carefully analyze what we use, and anything that adds uncontrolled variables is bad. Kind of our secret sauces is controlling all the variables that we can do down to pipette tips, down to everything, is consistent across every one of our implementations. That’s really the only way we can train them because we control the unexpected outcomes.

Kind of how I explain this to customers, I like analogies, is that it’s really the difference if you’re starting a business. It’s kind of the difference between, like, a five-star restaurant with a master chef. They’re doing creativity. You have one person in there who’s responsible to kind of tie everything together.

When you compare that to a McDonald’s, or any fast food chain, or any chain restaurant, they’re focusing on consistency, ease of results. Having staff with less experience than a five-star chef produce the same consistency across the country. That was kind of our model when I developed [00:14:00] Quasar. How do we simplify this?

How do we simplify everything? And, really, controlling variables is the key to our success. Yeah. Again, the added difficulty with labs, along with going down at this, is the single instrument that really kind of frustrates customers when things go down. As I said, that first week that they’re up, it’s literally you put a sample in, they want a result out.

If nothing happens, the instrument’s broken. The mass spec doesn’t work. The problem could have been that they put the vial in the wrong location, but they blame the mass spec. They blame us, they blame everything. So again, limiting variables is, is critical for us. Yeah. So having products like IMCS and it’s consistency, ease of use and reliability is, is absolutely, is absolutely critical.

And when we started working with you guys, we knew your commitment to quality and that you’re ISO 9,001 certified. You’ve been that for, what, five years now?

Andrew: Yes. Actually, just over five years, and our latest audit, we had zero findings.

Scott: Yeah, yeah. Great job [00:15:00] on the ISO audits. I know how challenging audits can be in the clinical world.

Claire and I, we had to deal with regulatory audits, CLIA, COLA, CAP audits, and payer audits. They also offer similar challenges, especially when you operate in the LDT world. People are much more critical, but really, you know, when you get an audit, they’re looking at consistency, competency, and documentation, and high-quality science.

Using the high-quality products at the front end and in the process helps us achieve that, simplifying everything and making sure that we get the accurate results that we need. I mean, actually, to be honest with you, we’ve done hundreds of validations. Enzyme hydrolysis is one of the validation experiments that we do.

We know what experiments are going to increase the likelihood of causing us issues, and the enzyme hydrolysis experiment is a gimme for us. We never question that one. We don’t have to worry about it. It’s kind of the philosophy that I’ve had on validations, specifically with LDT instruments, for a while now, is that when I got into this industry 10 years ago, a lot of what I see in the marketplace is people[00:16:00] viewing validations as a brick wall that they have to smash through.

It’s a barrier for them to go live, and they develop experiments to increase the likelihood of passing, to get a passing score on a piece of paper. We take a different philosophy. We use the validation as an opportunity to stress test the system.

We push the staff, we push the instrument, we push the method. We want to find failures in the validation process instead of thinking of the validation as a brick wall to smash through a barrier to go live. I don’t want our customers to think of the safety blanket. If we stress test it enough, that security is in the results that they’re getting, and it’s a combination of the training, it’s a combination of staff, the instrumentation, the method, and all the products and supplies that go into that methodology, it’s a safety blanket for them.

It’s when they have a year later, a difficult result to discuss with a patient. They want confidence that they [00:17:00] have confidence in that result; they don’t want to question that result.

So, while going live while running the samples is critical. The business stresses are there; they’re real. You can’t sacrifice patient quality, and you do not want to question the results from the lab. Luckily, with your enzyme, we don’t have to worry about that. That’s one area we literally spent zero time thinking about the enzymes.

In all these years, they just work.

Claire: So Scott, in my interactions with the clients, I often see that their validations do not stress the method. They are looking for easy-to-hydrolyze samples. So, for instance, most people may not know that benzodiazepines hydrolyze very easily, and that’s not stressing the system.

If you’re looking at enzymes, if you have a very high amount of glucuronide, say greater than [00:18:00] 2,500 nanograms, you need an enzyme that’s robust enough or has high hydrolytic activity so it can break all of those glucuronide bonds. People are not familiar with the differences in enzymes or the difference in the high-quality reagents and the cost of poor quality. In the world that I was in, if we put out a bad result, people may have been in the court systems, they would lose their children, they would go to jail, they’d be kicked out of a pain care clinic.

So there’s a big cost to quality, and I know this has increased pressure to reduce costs. How much do your reagents cost? But, really, what is the cost of quality? What is the cost of doing a robust validation if you don’t do one?

Scott: Yeah, I a hundred percent agree. It’s a difficult conversation we have [00:19:00] a lot of times with customers, and it’s the difference between price and value.

You can save money. But we have a fairly sophisticated financial engine where we can do a lot of modeling for the business. When we bring up a new customer, the first thing we do is evaluate their business model, their business plan, to make sure that it’s going to be profitable.

It’s a large investment. We want to make sure that the return is there. And so, we stress that when we run the financial simulations, our engine produces a five-year profit and loss statement. So we have five years of forecasting built into this thing.

And every financial variable you can think of is put in there. It pointly shows one thing is that getting paid for samples is where you make your money. Saving money [00:20:00] on consumables, you can’t save yourself to profitability. You only get there by running samples. Saving money from businesses is critical.

You have to do it; it’s prudent, but you have to understand the impact of that. A lot of times, people don’t see the long-term big picture. One of the biggest risks that a lab faces is failing an audit or failing a PT. They think that’s a slap on the wrist, and then you get corrected.

Worst-case scenarios, you’ll fail a PT, and you have to do an investigation as to why you failed it. If that failure comes back to a long-term problem that you’ve had in the lab that brings into question past results, you have to notify patients of those past results, which is probably the most difficult thing for a lab to do.

Claire: And you have to [00:21:00] return their money.

Scott: Exactly. I was getting on that. Now then, the payers come in, and they paid you for accurate results. If you weren’t delivering accurate results, they want their money back. And so, you know, factoring in the claw-backs is a huge part of this. And explaining that to customers that just making a change can have very, very real consequences, for the lab.

And that the problem is, and what scares me, when talking to customers that don’t understand this, is that you make a change and you might not know the effect of that change for six, eight months, and you have six, eight months of results of income, as you pointed out.

That comes into question; that’s terrifying. And also, we’re regulated. [00:22:00] If you change anything in your validated process, you have to do revalidation. So there’s an initial investment when you make a change or even bring up a new lab. You’ve got to factor in the cost of making any changes.

And so, yeah, the cost of validating, revalidating, the risk of claw back. You’ve got to be very careful with the consumables that you bring into a lab and make sure that they have high value. And high value might or might not mean a lower price, but you definitely have to pay attention to the value of the product.

Andrew: There’s a recurring word here that’s, you know, consistency, the value. But one of the things I want to kind of go back to is that safety blanket or the validation process. Claire, both Scott, you know, both of you mentioned that a lot of the customers use it just to pass. That’s really the hurdle that they need to overcome [00:23:00], and once they overcome that hurdle, they can just kind of cruise on by.

However, Scott, you’re taking the philosophy of making sure you stress test the whole system and the process. And I really appreciate that mentality or that approach to a product or a service because IMCS is very much the same thing. Claire pointed out earlier about inhibitors to the enzyme.

We know that there are certain factors that reduce the performance of the enzyme, and we stress test our enzymes to make sure that, hey, this is at least the required amounts to perform at X levels. However, if you’re not told of those technical parameters, you might stress test submit at a very minimal level, right?

To just make sure that you pass your validation. And then six months down the road, you realize, oh, shoot, everyone out of a hundred, or maybe two out of a hundred, or even one out of 10. You’ve under [00:24:00] hydrolyzed, or you’ve failed to hydrolyze some of the samples because you didn’t follow a protocol.

Like I said, you know, the validation process. I’d like to dig in a little bit more around that. I mean, how much of a validation service are you providing to your customers?

Scott: We provide training, and we develop a method based specifically on the customer’s needs. We train them to do these processes.

And for us, that’s a critical process. We’re not validating an instrument. When you have an FDA-approved piece of equipment, you’re doing an IQ OQ on a piece of equipment that’s already been validated. The methodology has already been proven to work. There’s a whole FDA study that proves that everything works.

You’re just making sure that. That instrument at that location is meeting expectations essentially, with us, and this is an LDT process, and it’s also very dependent on the personnel and their [00:25:00] experience. So the staff that we’re training runs all validation experiments. They do all the pipetting, they do all the setup.

We train them how to do it. That’s part of the stress testing, and it’s a learning experience for them. And, really, it’s an education and attention to detail. They learn how quickly you have to pay attention when using an LCMS. And then we provide the method, we provide the validation, and we do all the data review for the validation experiment.

And then once they get comfortable, and they master sample prep, then we throw data analysis on them, and then they start doing their own data analysis. We hold their hands for probably six months after they go live. Making sure that the data review that they’re doing is up to snuff.

Interestingly enough, the data review is just fascinating, how everything’s connected. So data review is one of the harder parts for these people to grasp and learn. [00:26:00] But the quality material that you use in the front, the quality of the method that you put on, can make a huge difference in the quality of data review that you get on the back end because you’re just not getting mysterious peak, you’re not getting ion suppression, you’re not getting a lot of the hassles that you have to deal with.

I have a luxury that I can slow things down, which Claire didn’t have. When you’re dealing with high-throughput labs, you’ve got to smash a lot of stuff together. That’s kind of our secret, is that we utilize instrument bandwidth to simplify and let these inexperienced people succeed.

Andrew: All right, we’re gonna change gears a little bit here and kind of get back on track regarding the clean enzymes.

But, you know, down to that classic maxim, Claire, you put junk in, you get junk out, you’ve got this brackish brown muck of an enzyme. But of course, there are several other vendors that provide pure enzyme. These other products look pretty clean and clear. [00:27:00] What sort of difference are we seeing in the market now for these purified enzymes?

Claire: So there’s crude enzymes, there’s purified crude enzymes, and then there’s genetically modified recombinant enzymes. Most labs we see now are using genetically modified enzymes as they provide high-hydrolysis activity. The crude enzymes or the purified crude enzymes, hydrolysis efficiency used to be quantified by something called Fishman units.

Well, those units can no longer be used to quantify how well an enzyme will hydrolyze your analytes of interest. What you have to look at is the data and produce data with real urine samples. So, you know, things have changed in the enzyme world. We have some people still using [00:28:00] crude enzymes, which we know that, depending on the source from which they’ve been recovered, whether it’s, uh, chopped up abalone intestines or limpets or snails, to filtered crude enzymes.

They all have different abilities that don’t change, no matter how much you clean them up, of being able to hydrolyze samples. Now the new genetically modified enzymes, such as IMCSzyme, have high-hydrolytic activity. It can really hydrolyze your samples with a small amount of enzyme.

Andrew: Yeah. You pointed out the quantity of enzyme that’s actually being used in some of these. I guess that’s the difference between, you know, these purified enzymes and the different supplies of enzymes. What I’ve seen in the market is some, maybe questionable sales tactics. Where, they’ll say, you know, 10 bottles of enzyme is, you know, $200.

Just an arbitrary number, ease of calculation. [00:29:00] But if you really dig deeper into that pricing structure, that 10 mil bottle could only be used for a hundred sample testing or 500 sample testing. In reality, you’re actually spending more because you’re actually using more of that purified enzyme, and because you’re using more of it, you’re putting more of that enzyme onto the column, more onto the system.

I mean, if you want to do some additional stress testing, I think this is a fantastic way to do it. Buy a cheap enzyme and just load up your columns and mass spec. I don’t know, Scott, if your customers will come back at you and skin you alive for that, but you want to put as little amount of protein into the system as possible, right?

Scott: Mm-hmm.

Claire: So, Andrew, you mentioned several points people don’t realize. All enzymes are proteins. And the goal in cleaning up urine samples is to get rid of the proteins in them and the salts. By adding an enzyme, you don’t want to add more protein to your sample that’s already there, so you [00:30:00] don’t want to put extra protein into your urine sample that you’re then going to put into your mass spec, which will then clog your column and coat all of your tubing with proteins.

The devil’s in the details. You want to look for a pure, clean enzyme that you only add a little bit to your sample, and then the pricing. You could pay $5 an mL, but you can only get 10 samples per mL out of it. So you actually end up paying a lot more per sample than a higher-priced enzyme. So you have to look at the price per sample amount you’re entering.

And then if you’re adding a lot more enzyme, you’re adding a lot more protein. So you mess up, you gunk up your system. And then, the point that Scott talks about is when you’re doing a validation, you want to stress your enzyme hydrolysis validation with drugs or analytes that are hard to cleave that glucuronide [00:31:00] bond. Like a codeine 6, like a Noro buprenorphine.

And you want to use higher amounts of those analytes. Most pain care specimens, you know, they have over 10,000 nanograms per mL of glucuronide. Sometimes you wonder how these people are walking around. But long-term pain care patients have high amounts of opiates and benzodiazepines and sometimes some THC, and just think about everything that you consume can be eliminated as a glucuronide.

So you think about nicotine and caffeine,

Andrew: Your Advil, ibuprofen, your Tylenol pills, any of those would be gluconate and all in part of that.

Claire: Things that we don’t look at

Andrew: mm-hmm. All part of that urine sample.

Claire: You really do need to stress your validation. Not use, you know, don’t use a benzodiazepine that will hydrolyze very quickly, even with a crude enzyme,

Andrew: and then translate [00:32:00] that change over as if it’s all done and it’s the same.

It’s really not. Right.

Scott: Yeah.

Andrew: And I think Scott touched upon this whole thing about, if you’re just looking at consumable costs, really, that you’re going to get into some trouble. Again, we’ve talked about price versus value, and we’re kind of hounding on value. Not only on the differences of the enzyme itself, but also paying attention to the details.

Thank you for joining us on our very first episode. We just wrapped up part one of our conversation with Dr. Scott Kephart from Quasar Instruments. As we’ve discussed, investing in quality, reagents, and processes makes all the difference. In part two, we’ll dive into the serious consequences of poor quality and inaccurate results, especially for smaller labs and physician-run operations.

Until then, connect with us on LinkedIn and check out more episodes at IMCStips.com [00:33:00] or your favorite podcast platform. See you in the next episode.