But Path to Market is Still Rife with Hurdles
Convergence of Genomics and Medicine
At the 2010 BIO Conference in Chicago with about 15,000 attendees there were ten Breakout Sessions on Biomarkers (BM) encompassing Intellectual Property, commercialization, reimbursement, drug development and diagnostics. This explosive new technology niche is a nascent paradigm for exploiting breakthroughs in the molecular basis of disease and more targeted medicine, and assumes a need for co-development of diagnostics and drugs. Genomics transformed biology and now we are seeing the impact on drug development and personalized diagnostic services with a focus on cancer and cardiovascular diseases.
Biomarkers in Cancer Are On a Fast Track
Cancer treatment is becoming “personalized”because targeted drugs like Herceptin (trastuzumab), Gleevec (imatinab) and Iressa (gefitinib) are already on the market and can benefit from a more targeted therapy utilizing diagnostic tests.
In a recent BIO session Bernward Garthoff Ph.D., Chair of Cluster Biotechnology of the Federal State of North Rhine -Wesphalia D., chaired a session on the potential for use of Biomarkers in Diagnosis/ Therapy in Breast Cancer and Other Tumors was explored. Breast cancer was a prime example where chemotherapy may be reduced after surgery to prevent metastases as it is claimed that only 5% of women would need this therapy. As a case in point in the treatment of node negative breast cancer (NN-BC) after molecular profiling only 30% would benefit from chemotherapy treatment.
The Oncotype DX breast cancer test from Genomic Health (GHDX) predicts chemotherapy response from ER+ tumors from FFPE tissue and recommending a treatment regimen from this data although the clinical utility needs to be proven in more studies. The test profile costs about $3200.
The most studied biomarker the ErbB2 receptor for Her2 show that in 25% of breast cancers that receptor is amplified so that chemotherapy can possibly be reduced by 33% as all patients do not respond to trastuzumab(Herceptin). Another promising biomarker is P13k as it controls important cellular pathways and is involved in cancer and inflammatory diseases. Calistoga Pharmaceuticals has an isoform selective P13K delta inhibitor in a Phase 1 trial in combination with Rituxan. A potential model would be testing ErbB2+++ patients in combination with the P13k biomarker as this mutation would also elucidate therapy with trastuzumab. The KRAS mutation predicts response to EGFR receptor drugs such as cetuximab (Erbitux) and is a good predictive biomarker.
Use of Biomarkers Growing in Drug Development and Clinical Trials
Also at BIO, Dr. Hans Bostrom of Merck R&D reiterated that big pharma is not interested in more targets but validation of existing targets through translational medicine. Michael Hehenberger Ph.D. of IBM reiterated the need for biobanks for long term global studies to track genomic data with “epigenetic “changes. IBM has been involved in information based medicine since 2003 and this should be a growing trend. deCode Genetics now a private Company was the first company focused in the field of disease associated genotypes and SNP’s and we can learn more from this Company as a model for diagnostic and drug development.
Kristian Hveem Ph.D. of Hunt Biosciences (www.huntbiosciences.com) is developing the potential of population “biobanks”for biomarker discovery and validation. Samples have been collected over time in a project involving populations of up to 210,000 individuals in Norway with disease outcomes. Urine and serum samples were tested for DNA and RNA markers. A significant issue with biobanks is informed consent and IP.
At the recent BIO Meeting Lewis Bender CEO of Interleukin Genetics Inc. (ILI) commented on the need for biomarker and genetic profiling tools at an earlier stage of drug development. Bender commented, “all inflammatory diseases can most benefit from biomarkers such as TNF, interleukins, and fLQT a cardiac marker. Obstacles to biomarker development were given by John Schultz a VP of Clinical Data Corp (CLDA):
- Discovery and validation of biomarkers can be expensive and who owns the IP?
- Which assay platform should be used as that affects pricing and marketing.
- How will the diagnostic be marketed as a kit or certified CLIA lab as is currently being done.
Chris Roberts Director of Molecular Profiles and Research Informatics at Merck said that “major drug companies need to understand the genetics of response and stay ahead of the curve as the field is mind boggling and moving fast”.
Business Models for Biomarkers: Companion Diagnostics
Dr. Stephen Little, VP of Personalized Healthcare at Qiagen (QGEN) believes that the timing is right for biomarkers because of breakthroughs in the molecular basis of disease and that more accurate diagnostics can result in improved therapy. Although the trend for companion diagnostics (CDx) is widely recognized and compelling, progress may be slow as it will require extensive collaboration between diagnostic and drug companies. Some of the issues he presented are:
- Big pharma’s commitment to biomarker investment
- Technological hurdles of assay development
- Onerous regulatory hurdles as most assays are now central lab CLIA based.
IP Issues in Biomarker-Based Diagnostics were also addressed at the April BIO Conference on a panel chaired by David Gass of Marshall, Gerstein and Borun LLP. The IP material presented is too extensive within the scope of this article (request slides from firstname.lastname@example.org) and much of the detail is focused on the Myriad Genetics (MYGN) vs AMP BRCA gene patents case. Some of the key points from this session are that biotechnology patent applications are way down(under 20,000 from Year 2000 peak of over 80,000 due to fewer speculative gene patents and tougher criteria from the Patent Offices; and patent activity is increasingly focused on diagnostic uses of genetic information such as SNP’s. An excellent review of patent eligibility with respect to diagnostic methods was also presented.
The major challenge for biomarker discovery and evolution to a diagnostic kit is proving clinical utility and the major investment in clinical trials. Dr. Little estimates that a Phase 3 drug trial for a drug can cost $100M and a companion diagnostic (CDx) for the same indication could cost as much as $20M. The available market for an FDA approved companion diagnostic could be $20-50M a year.
In summary biomarkers are transformative but the business model has not yet been proven. Dr. Little outlines three possible business models: 1.) a biomarker such as PI3 kinase inhibitor gets accepted as part of the drug/development process.2.) A payor driven model evolves as it shows that a sub-population can be targeted for improved drug efficacy and cost effectiveness. 3.) A patient driven services model such as Genomic Health’s OncoType DX tests where an individual seeks test data for their own treatment.
A business consultant experienced in the field, Linda Pullan Ph.D. commented that although many companion diagnostic (CDx) deals have been announced the financial terms are not always disclosed. Pullan said, ”It could be that that the value proposition is speculative because the predictive power of the biomarker in drug/diagnostic studies (or CDx) is unknown and the range of outcomes is very large.” Dr. Pullan also feels that it is more likely that any diagnostic would be developed only after the drug is on the market.
Market Trends Forecasted In Deal Flow
Although product sales for Companion Diagnostics and Biomarkers were less than $40M in 2009, R&D alliances are very active anticipating growth from genetic based medicine.
Service revenues for emerging diagnostic companies such as Genomic Health (GHDX) and Genoptix (GXDX) are growing as patients and physicians seek personalized treatment options for cancer.
Most biomarker diagnostic testing platforms utilize nucleic acid testing such as PCR and immunoassays. Mass spec for SNP genotyping shows promise for prenatal diagnostics (Seqenom, SQNM).An evolving platform is DNA microarray and recently Illumina (ILMN) announced FDA(510k) market clearance for its BeadXpress system for multiplex genetic analysis intended for diagnostic development as well as a genotyping test for Factor V (Leiden) and Factor II (Prothrombin). The platform is already being used for multiplex coverage of key biomarkers associated with drug metabolism. DNA sequencing for genomic research is growing fast as the cost of personal human genome sequencing is dropping down to the $1000 level so the science will evolve rapidly with the explosion of sequence data. Emerging next generation sequencing players are Complete Genomics, Ion Torrent and Pacific Biosciences; the current leaders are Illumina (ILMN), Life Technologies (LIFE) and Roche/454 (RHHBY.PK).
Several genetic biomarkers involving EGFR and associated gene mutations are validated for cancer treatment as FDA approved test/treatment regimens for Herceptin, Gleevec, Erbitux, Iressa and Tarceva. Kalorama Information forecasts a growing market for cancer diagnostics in combination with therapy with a 25-30% annual growth over the next 5-10 years reaching $90M for the new “pharmacodiagnostics” (or PGx) category by 2014. By 2025 10-20% of all new drugs will be labeled with a companion test. The market in 2009 is $30M out of a total WW Cancer Diagnostics Market of $4.270B, however the total includes cancer tests for histopathology, immunoassays, flow cytometry, FISH and others. Kalorama also notes the growing use of protein biomarkers in clinical trials for cancer drugs that is expected to be more than $1B in 2010.
It is difficult to separate molecular diagnostic alliances from the category of “companion diagnostics” but here is a sampling of significant deals involving biomarkers (PGx):
- bioMerieux and Knome (www.knome.com) of Cambridge MA announced a strategic partnership in April 2010 bringing genome sequencing to the in vitro diagnostics market including a $5M equity stake by bioMerieux in Knome.
- Celera (CRA) made a big move into personalized disease management for cardiovascular disease with the acquisition of Berkeley Heart Labs in 2007 for $195M in cash. Celera is also developing a biomarker called KIF6 implicated in inflammatory processes and the risk of coronary disease. Diagnostic and PGx partner is Abbott (ABT).
- Inverness (IMA) is at an early stage of commercializing biomarkers for acute kidney injury(NGAL) and placental growth factor(PIGF) for pre-eclampsia.
- GE Healthcare entered the Personalized Medicine space with a $5M equity as part of a Series D round investment in CardioDx(www.cardiodx.com)with their Healthymagination Fund venture fund. CardioDx is focused in cardiovascular genomic diagnostics initially with their Corus CAD panel that integrates 23 genes and other patient characteristics.
- Response Genetics (RGDX) signed a non-exclusive licensing agreement in early May 2010 with GlaxoSmitheKline (GSK) for certain rights to the Company’s PCR and RNA tissue extraction technology technology to assess the BRAF gene mutations which have been correlated with certain forms of cancer.
- On 9/22/09 Qiagen (QGEN) announced the acquisition of DxS a UK based privately held companion diagnostics company for $95M plus $35M in milestone potential. DxS has molecular diagnostic assays for to predict patient’s response to cancer treatment such as K-RAS which has a market potential of $100M as well as EGFR, PI3K and BRAF.
- Duke University and LabCorp (LH), a major clinical testing laboratory, announced in April that it has created a joint venture called The Biomarker Factory to commercialize new biomarkers. Duke has a biobank of hundreds of thousands of biological samples including a large-scale epidemiological study called MURDOCK.
Genomics and personalized medicine is a long-term theme supported by explosive scientific developments and a compelling need in drug development. Deal flow in genomics should continue at a brisk pace. However unlike the late nineties it should not create a new biotech” bubble” as capital flows into the life sciences have drastically slowed and the big money is still tied up in bonds, derivatives and algorithmic macro trades like currency and interest rates.
For future reference see:
NEJM Vol. 362:2028-2029 Harold Varmus M.D. Editorial and follow-up articles
KaloramaInformation: The Worldwide market for Cancer Diagnostics, April 2010
Rod Raynovich 7/6/10