Growth of personalised medicine to drive alliances between pharma and diagnostics

This trend is evidenced by DxS Ltd’s deal with AstraZeneca plc to make available a companion diagnostic for use with Iressa (gefitinib), AstraZeneca’s treatment for non small cell lung cancer, and GlaxoSmithKline’s recent deal with Enigma, a UK 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 per cent to 75 per cent 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,” said Kubitza.

The report also highlights the prominence of personalised medicine in current mergers and acquisitions and licensing deal activity in the in vitro diagnostics 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.

A number of factors to drive the continued development of personalised medicine and the value of innovative diagnostics, including the European regulatory agency EMEA and the US FDA’s introduction of formal requirements to test for certain biomarkers prior to prescribing certain drugs.

Simon Friend, global pharmaceuticals and life sciences industry leader at PricewaterhouseCoopers said that increasingly pharmaceutical companies will not move a drug candidate to the clinical development stage without a clear biomarker development programme. “These companies understand the contribution of biomarkers and diagnostics in improving the design and probability of success of clinical trials. In addition, pressure from healthcare payers is putting more emphasis on the availability of a companion biomarker test when deciding on a drug’s reimbursement.”