Personalized Medicine – Trends in MolecularDiagnosticsy

Exponential Growth Expected in the Next Ten Years

Julie Hoggatt

inThought Research, Wolters Kluwer Pharma Solutions, Yardley, Pennsylvania, USA

Abstract Companion diagnostics and stratifiedmedicines will be increasingly used over the next ten years. Current

market leaders who have created diagnostic divisions with a focus on biomarker identification will benefit,

notably Abbott, AstraZeneca, Novartis, and GlaxoSmithKline.

Pricing incentives and improvement in efficacy will drive this market. The US FDA is not likely to

mandate stratification of medications, but cost containment for clinical trials will be sufficient incentive for

companies to pursue this approach.

The next area expected to produce stratified medicines is infectious disease, expanding from HIV to

hepatitis C and hepatitis B. Celera is likely to be first to market with diagnostics for genetic variations in

hepatitis C and hepatitis B.

Metabolic disorders, especially diabetes, are also fertile ground for stratified medicine, likely to catch up

to oncology and infectious disease over the next decade.

Speaking for the inThoughtDiscussion Series,Dr. Eddie Blairz

provided insight into the rapidly changing pharmacogeno-

mics market, predicting that companion diagnostics and

stratified medicines will be increasingly used over the next de-

cade. Pricing incentives and improvement in efficacy will drive

the market. Expect to see stratified medicines for metabolic

disorders, such as diabetes and obesity, to successfully adopt

this strategy next. The infectious disease market will also fur-

ther adopt this strategy, with expansion outside of HIV to

hepatitis B and C.

1. Personalized Medicine Background

There are many definitions of personalized medicine.

inThought borrows its working definition from that of the US

President’s Council of Advisors on Science and Technology,

which says that ‘personalizedmedicine’ refers to the tailoring of

medical treatment to the individual characteristics of each pa-

tient; to classify individuals into subpopulations that differ in

their susceptibility to a particular disease or their response to a

specific treatment so that preventive or therapeutic inter-

ventions can then be concentrated on those who will benefit,

sparing expense and side effects for those who will not.[1]

The Personalized Medicine Coalition document on ‘The

Case for Personalized Medicine’[2] further states, ‘‘The molec-

ular methods that make personalized medicine possible include

testing for variations in genes, gene expression, proteins, and

metabolites, as well as new treatments that target molecular

mechanisms. Test results are correlated with clinical factors –

such as disease state, prediction of future disease states, drug

response, and treatment prognosis – to help physicians in-

dividualize treatment for each patient.’’

y Adapted and reproduced from Hoggatt J. Personalized Medicine: Trends in Molecular Diagnostics. Exponential Growth Expected in theNext Ten Years. inThought Research, 2011 Feb 9.

z Edward D. Blair, PhD,MBA, is a Senior Advisor at Enterprise Analysis Corporation in the UK. Dr. Blair is a molecular biologist/biochemistwith over 15 years experience in the pharmaceutical industry. He has been aDirector of Applied Diagnostics and Surrogates at GlaxoSmithKline.He is also a visiting scholar at Cambridge University.

IN THOUGHT ALERTMol Diagn Ther 2011; 15 (1): 53-551177-1062/11/0001-0053/$49.95/0

ª 2011 Wolters Kluwer Pharma Solutions. All rights reserved.

Genetic testing is one way to identify the correct drug for the

correct patient. Typically, genetic testing will fall into one of

three categories:

1. diagnostics: the evaluation of genetic sequences to confirm

the presence of disease (often used for oncology monitoring);

2. prognostics: the evaluation of genetic mutations to deter-

mine susceptibility to a future condition (for example, cystic

fibrosis genotype testing);

3. pharmacogenomics: the evaluation of genetic variations to

identify patients likely to respond to a particular therapy (used

for example in breast, lung, and colorectal cancer patients).

Currently, ‘personalized medicine’ is often used synono-

mously with pharmacogenomics, referring to identifying spe-

cific characteristics of individual patients’ gene sequences and

tailoringmedical treatment accordingly. Determining the likeli-

hood of a patient’s response to a particular drug or treatment

regimen helps both to maximize efficacy (only responders will

receive the medicine) and to improve safety (those likely to

experience excess adversities avoid the regimen) across a pop-

ulation. Applying personalized medicine strategies can increase

the success rates of clinical trials and can also lead to com-

mercial success. Although a drug developed via personalized

medicine tactics may have a more limited market, it often

commands a higher price.

The most obvious successes in personalized medicine have

been in oncology. Analysis of erbB2 (HER2/neu) and EGFR

proteins in breast, lung, and colorectal cancer is done before

selecting treatments for these cancers. Antiplatelet therapy for

acute coronary syndromes and coronary artery disease is also

beginning to become more personalized.

The most common way of detecting pharmacogenomically

relevant sequences is fluorescence in situ hybridization (FISH).

For instance, FISH is used to quantify the HER2 gene expres-

sion in breast cancer tumors. Breast cancer patients’ tumors

that overexpress theHER2 gene are usually faster growing than

those without such overexpression. However, these patients are

also predisposed to respond favorably to treatment with Gen-

entech’s trastuzumab (Herceptin�). Since trastuzumab’s effi-

cacy is dependent on use in appropriate patients, the US FDA

has required HER2 testing before initiating therapy. Many

companies offerHER2 testing, including Abbott Laboratories,

Dako, Ventana Medical, and Monogram Biosciences.

Roche and Affymetrix created the AmpliChip� CYP450

Test, which provides comprehensive detection of gene varia-

tions, including deletions and duplications, for the cytochrome

P450 (CYP) genes CYP2D6 and CYP2C19. CYP2D6 and

CYP2C19 play a major role in the metabolism of an estimated

25% of all prescription drugs. Identification of variants in these

genes enables physicians to stratify patient responses to par-

ticular drug treatments. CYP2C19 variants are particularly

germane to personalizing antiplatelet medicine usage in coro-

nary heart disease indications.

2. The Future of Personalized Medicine

For personalized medicine to take hold, Dr. Blair notes that

we ‘‘must move from the blockbuster mentality.’’ Companies

must stop looking for one drug to treat all patients with a

specific indication. Companies must begin looking at the dif-

ferent patients needing to be treated and identify the best treat-

ment for the patients. This will start with more objective testing

to identify disease subgroups, taking us from a one-size-fits-all

mentality to a situation where treatments are individualized.

The fear of lost revenue has prevented this approach from

being rapidly adopted. However, Dr. Blair believes that the as-

sumption of lost revenue is inaccurate. Dr. Blair and his team at

Enterprise Analysis Corporation have published on alternative

models to the current blockbuster model. When a medicine has

proven to be highly effective and is demonstrably safe in a

specific patient population, its price will increase to reflect the

value to the patient. When a medicine is priced appropriately,

the price potential will move from a blockbuster’s $US100 per

treatment to the price of trastuzumab or imatinib mesylate

(Gleevec�), which can be as much $US8000 per month. Rev-

enues come not from sales volume, but by value to specific

patients.

Another benefit of personalized medicine is to increase the

efficiency of clinical trials. A number of case studies have shown

that a companion diagnostic can increase the odds of success in

a clinical development program.

3. Looking to the Future

Although progress to date has been slow, the use of compan-

ion diagnostics and stratified medicines is poised for growth.

Pharmaceutical companies have positioned themselves to

better develop treatments with companion diagnostics through

both acquisitions and internal expansion. It has been suggested

that the FDA should mandate a stratified medicine approach

within the next ten years, but Dr. Blair believes this may be

overly optimistic. However, he believes efficiencies in cost of

clinical development will be enough to incentivize companies.

Personalized medicines strategies can benefit not only the

drug developer but also the producer of the diagnostic test. One

way that companion diagnostics are becoming more profitable

is that the pricing model of diagnostics is moving toward the

54 inThought Alert

ª 2011 Wolters Kluwer Pharma Solutions. All rights reserved. Mol Diagn Ther 2011; 15 (1)

traditional pharmaceutical pricing model. A diagnostic-

therapeutic bundle is reimbursed. Therefore, if effectively treat-

ing a disorder eliminates the need for additional medications or

treatments, the amount of cost savings can be applied toward

the diagnostic cost. Genomic Health has cancer diagnostics

that are reimbursed at $US3500, a high price for a typical diag-

nostic, but a cost saving for the bundle (the diagnostic and

treatment), since the result of the test will indicate which treat-

ment is effective and eliminate the need for additional medi-

cations or treatments.

The organizations that could benefit most from personalized

medicine and companion diagnostics are the current large

pharma leaders, according to Dr. Blair. Large pharma com-

panies are well positioned because these companies often offer a

variety of medications per indication. Payors and regulators

will look favorably on companies that develop a test to stratify

patients, leading to flexibility of pricing.

Over the next ten years, Dr. Blair estimates personalized

medicine will grow to 5–10% of the entire pharmaceuticals

market. Some companies will be bigger players than others.

AstraZeneca is looking to have a personalized medicine ap-

proach in 10% of its products in the next ten years. Roche is

likely to expand its personalized medicine approaches as its

diagnostics division continues to identify biomarkers. Abbott

also has a large diagnostics business. Novartis is interesting

because it has had great success in biologics and target medi-

cines. Novartis recently developed a division called Novartis

Diagnostics, set up to identify biomarkers using either out-

sourced or in-house models. GlaxoSmithKline is using a model

similar to Novartis’s, looking to identify the best platforms and

tests to meet the diagnostic needs in-house.

Acknowledgments and Disclosures

The original inThought� Research Report[3] this article is adapted

from is available on request from journalmdt@adis.co.nz.Wolters Kluwer

inThought� Research Reports provide unbiased analysis and ideas based

on the needs and direction of clients. Analyses include a proprietary

methodology for quantifying probability of FDA approval as well as a

forecasting revenue methodology for both approved and developmental

drugs and medical devices. The material herein, while not guaranteed, is

based upon information believed to be reliable and accurate. inThought�do not (a) give investment advice; or (b) advocate the sale or purchase of

any security or investment. Thematerial herein is not to be deemed an offer

or solicitation on our part with respect to the sale or purchase of any

securities.

References1. President’s Council of Advisors on Science and Technology. Priorities for

personalized medicine [online]. Available from URL: http://www.white

house.gov/files/documents/ostp/PCAST/pcast_report_v2.pdf [Accessed 2011

Feb 18]

2. PersonalizedMedicine Coalition. The case for personalized medicine.Washington,

DC: Personalized Medicine Coalition, 2006 Nov

3. Hoggatt J. Personalized medicine: trends in molecular diagnostics. Exponential

growth expected in the next ten years. inThought Research, 2011 Feb 9

Correspondence: Julie Hoggatt, BS,MAcc,Wolters Kluwer Pharma Solutions,

770 Township Line Road, Suite 300, Yardley, PA 19067, USA.

E-mail: julie.hoggatt@wolterskluwer.com

Outlook for Personalized Medicine 55

ª 2011 Wolters Kluwer Pharma Solutions. All rights reserved. Mol Diagn Ther 2011; 15 (1)