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As personalized medicine grows in importance as new stakeholders enter the fray, the result is a changing dynamic for the entire industry.
As a result of this shifting landscape, competitiveness is on the rise as drugmakers scramble to find the right partners to develop diagnostics, regulators place more scrutiny on laboratory-developed tests and third-party payers demand to see more evidence of treatments that can deliver results for their customers.
In a webinar presented by Pharmalot and the publishers of PharmaLive, Harry Glorikian, managing partner of Scientia Advisors and a former biotech executive, presented a session titled "How a New Set of Players is Changing Personalized Medicine."
According to Glorikian, a key area is the in vitro diagnostics landscape, including reagents, instruments and systems.
"This area has been around for a long time and people used to look at it as pennies-for-pounds diagnostics," he says. "This area has been changing rapidly and getting a lot of attention. The market has been growing at a pretty healthy clip of about 8 percent."
The growth rate, he explains, is dragged down a bit though by older technology such as clinical chemistry.
"That is what we classify as along the lines of analog medicine and what we are moving towards is more along the lines of digital medicine," Glorikian notes, pointing out that with so much potential for growth, there is plenty at stake for all of the participants. "The areas of growth that are happening that are driving clinical decisions include pathology and molecular diagnostics."
While still in the early stages, personalized medicine is steadily emerging as the new healthcare paradigm. In the U.S., the total market for personalized medicine currently is estimated at $232 billion and is projected to grow 11 percent annually, nearly doubling in size by 2015, to a total of $452 billion, according to PricewaterhouseCoopers' estimates.
The core diagnostic and therapeutic segment of the market—comprised primarily of pharmaceutical, medical device and diagnostics companies—is estimated at $24 billion, and is expected to $42 billion by 2015. The rest of the market is taken up by the currently estimated $4 billion to $12 billion personalized medical care portion of the market—such as telemedicine, health information technology and disease management services offered by traditional health and technology companies—and the nutrition and wellness market that is geared toward retail, complementary and alternative medicine, which is currently estimated at $196 billion.
Personalized medicine, Glorikian notes, is defined as the right therapy for the right patient at the right time but he notes, "I would add one more caveat to that—with the right technology." As such, he points out that there is a significant shift in the space in terms of technology being used to drive how patients are being treated. As a result, the question arises as to exactly how companies can affect the efficacy and the cost of drugs while avoiding adverse drug reactions.
"What we are seeing is that cost and efficacy are gaining more attention than adverse reaction when it comes to development of new therapeutics," he says. "A focus on improved efficacy and safety will have a ripple effect through the segment."
From the perspective of drug developers, Glorikian says the end result could lead to improvements in the drug discovery process and a reduction in time, cost and failure rates of trials.
At Scientifica Advisors, Glorikian says the two things he is talking to clients about is improved safety and efficacy.
"I believe that pharma companies are interested from a number of different angles, including the potential for higher efficacies," Glorikian notes. "The diagnostics companies are interested in finding new biomarkers and new revenue streams. As a result, there are many new companies that are coming on the block almost daily or weekly that are focused on diagnostics and see opportunities."
For pharma companies, a growing question about companion diagnostics and pharmacogenomics is whether they are necessary internally to push their therapeutics. Other pharma companies are questioning whether they need to be in diagnostics as a stand-alone business and whether it will help with companion strategies.
"Right now, it is a partnership aspect," Glorikian says. "People are forming many different partnerships in the market to have a diagnostic company work with them and vice versa. What we are seeing over time is that growing in the market."
As a result, three key areas are forming: companion diagnostics, adverse testing and predictive testing.
The predictive testing area isn't necessarily a partnership with two companies, but rather a company taking on both combinations of a novel treatment to take to market.
Going forward, Glorikian says there is an increasing number of biomarkers on the market today and he expects that to continue over the next couple of years.
"In the next three or four years, we are going to see a rush of new products entering the system and having an affect on how people are diagnosed and what prognosis tests are out there," he says. "Not all products will be molecular, some may be protein-based. Some may be based on sequencing."
Moreover, there are more deals going on from an oncology standpoint, where tests are being licensed and acquisitions are being finalized that would drive a deals or research position in a particular way. There are also organizational changes, with some companies working to outsource diagnostics and others aiming to be completely integrated organizations with therapeutic groups and diagnostic groups working together to determine how they will take a product to market.
In addition to every genomics and proteomics company that now is interested in diagnostics, Glorikian notes that a key emerging stakeholder is next-generation sequencing companies, many of which are hiring their own diagnostics personnel.
"They are looking for new biomarkers and simplifying the technology to make the platform an universal platform for diagnostic decision-making," he says. "Companies like Illumina, for example, are looking at diagnostics as a way to make their mark in the industry. "
Glorikian contends that if technical hurdles are cleared, "the prediction that we now have is that by 2014 you will be at the sub-$1,000 genome. Instead of doing the whole genome, we expect that people will be conducting targeted sequencing on tumor samples and the data that comes out of that tumor sample will directly impact the therapeutic regime that comes downstream."
As a result, personalized medicine is seeing an increase in stakeholder activity, with many emerging stakeholders affecting the landscape of the market in ways different than current stakeholders may anticipate.
Glorikian says that personalized medicine can be seen as a way of leveling out what has been a rollercoaster ride of seeking the next blockbuster drug. As a result, it will dilute the impact of patent expiration and create an industry that is more stable and sustainable.
Glorikian notes, too, that many pharma companies have been "blindsided" by biomarkers on their products and can't afford to let it happen again. "They need to look at biomarkers that are moving their way through the system that will affect their existing products," he says.