Growth in Personalised Medicine to drive alliances between Diagnostic and Pharmaceutical Industries

The growth of personalised medicine, which aims to better target treatments to patients, is expected to increase the number of alliances between diagnostic and pharmaceutical businesses, according to a new PricewaterhouseCoopers (PwC) report entitled Diagnostics 2009: Moving towards personalised medicine. This trend is evidenced by GlaxoSmithKline's recently announced deal with Enigma, a British diagnostics group, to develop a new test which can diagnose specific strains of influenza, including swine flu, in just an hour. Although the effort to better personalise treatments is not new, significant further progress is needed as current patient response rates to medicines can be very low - varying from 20% to 75% depending on the drug.

Loïc Kubitza, director at PricewaterhouseCoopers said:

“We expect alliances with the pharmaceutical industry to increase in the next two to five years but this will be driven by factors including the pricing of diagnostics, the extent of reimbursement coverage, and the burden of any clinical validation work required for market access.

“Although the clinical motivation for developing more tests designed to guide the prescribing of a specific drug is clear, the economics are challenging. The pricing of these tests does not always reflect the level of development costs associated with the test or its contribution to overall health benefits and this can adversely affect the business case for developing a new diagnostic.

‘’Addressing the pricing conundrum is a crucial factor to ensure that diagnostics play a full part in improving patient health and will be a critical part of a pharmaceutical company’s tool kit in enhancing its product portfolio and pipeline.”

The report highlights the prominence of personalised medicine in current mergers and acquisitions (M&A) and licensing deal activity in the in vitro diagnostics (IVD) sector. In 2008, personalised medicine motivated three of the ten largest M&A deals and four of the licensing deals by the ten largest IVD companies.

PwC expects a number of factors to drive the continued development of personalised medicine and the value of innovative diagnostics, including:

• Regulatory agencies, including the US Food and Drug Administration (FDA) and European Medicines Agency (EMEA), which are supporting the field of personalised medicine by introducing formal requirements to test for certain biomarkers prior to prescribing certain drugs.
• Legislation introduced in May 2008 in the US and Europe to protect individuals against discrimination resulting from the use of genetic information may now encourage more people to undergo genetic testing or participate in innovative research.
• Genentech’s Citizen Petition of December 2008, which created new momentum around the discussion of the diversity of regulatory paths to market for in vitro diagnostics.
• The formal adoption of new diagnostic technologies in the guidelines of important clinical communities, which should accelerate their market adoption. Agendia’s MammaPrint (a DNA-based test for evaluating an individual’s risk of breast cancer spreading to other sites) is an example of a new diagnostic tool to help personalise treatment, which was recently validated by an influential national clinical group – the Dutch Institute for Healthcare Improvement (CBO).

Sharat Bansal, India pharmaceuticals and life sciences industry leader at PricewaterhouseCoopers, concluded:

“The pharmaceutical world is moving from mass market therapies to specialist therapies which are of special relevance to the diagnostic industry. Many specialist therapies are very costly (e.g. almost $300,000 annually for Fabry’s or Gaucher’s disease) and are used to treat smaller target patient populations with specific disease subtypes. In this context, there is thus a growing imperative, both clinical and budgetary, to accompany therapies with diagnostic tools of increasing sensitivity and specificity to better enable the identification of those patients in the relevant subtypes and those most likely to benefit from the therapy. The marketing model most foreseen for most specialist therapies in 2020 will include companion diagnostics as a key component. This will have an implication for patient treatment in India as specialist therapies gain traction.

Increasingly, pharmaceutical companies will not move a drug candidate to the clinical development stage without a clear biomarker development program. These companies understand the contribution of biomarkers and diagnostics in improving the design and probability of success of clinical trials. These factors will combine to accelerate the development of new diagnostics for personalised medicine. Together, we anticipate that alliance and collaboration will be inevitable as the market needs expand.”