TABLE OF CONTENTS

Competing with the Giants?

Companion Diagnostic Dealmaking

Five Extera Projects

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What a Companion Diagnostic Developer Needs to Know about Partnering, by Robert Parnell, Ph.D.

Companion diagnostics with novel drugs are now a reality in oncology and will soon significantly influence the whole healthcare landscape. The blockbuster drug Herceptin for breast cancer would have failed without its companion diagnostic for population pre-selection. More drugs will come to market and be safer as companion diagnostic become more prevalent. Diagnostics can aid in risk assessment and therapy monitoring and optimization, improving patient outcomes.

Despite the market forces favoring novel diagnostics, startups with promising biomarkers and technology often stumble on the path to commercialization. While significant industry experience is irreplaceable, the following five points are useful guidelines for new diagnostic developers seeking major diagnostic or biopharmaceutical company partner:

1. Design a development path that integrates drug and diagnostic timelines. Aligning the interests and development schedules of biopharma companies, diagnostic companies, and regulatory bodies such as the FDA requires careful planning and deep expertise in drug and diagnostic development. The diagnostic developer must first validate the analytical test’s ability to accurately and reliably measure the analyte of interest in a biological sample. Clinical validation of the test’s ability to detect or predict the associated disorder by inclusion in drug development clinical trials follows. The ultimate success in getting the diagnostic test on the drug label hinges on the test’s clinical utility in defining inclusion and exclusion criteria, as an aid to achieving measurable outcomes benefits.

2.  Pursue both Biopharma and Diagnostics partners.  A biopharma partner will be necessary to include the novel diagnostic in clinical trials during drug development and get the test on the drug label. For commercialization, a major diagnostic company will likely be required to distribute and support the test. Today, few if any of these companies understand the objectives and deal constraints of the other!

3.  Pursue a therapeutic area with high unmet clinical needs. Such unmet clinical needs may be in areas where there are multiple treatment options but physicians rely on trial or error or marketing information on a newly available drug to prescribe treatment, without a tool to predetermine which drug may be most effective for an individual patient. Examples of such diseases are mental illness/depression, oncology and cardiovascular diseases. In some cases such as oncology, selection of an inappropriate drug can delay treatment or even be counterproductive. In areas such as infectious disease caused by drug resistant bacteria or septic shock, rapid, accurate diagnosis and selection of the correct treatment can be lifesaving.

4.  Develop a mainstream assay format. Incumbent diagnostic players invest heavily in promoting, installing, maintaining, and servicing an installed base of diagnostic equipment.  New tests that are compatible with the installed base will be a welcome addition and consistent with the expected system life cycle. Diagnostic tests requiring capital outlays for new durable equipment, however, face difficulties in achieving acceptance into the diagnostic armamentarium.

5. Create a strong IP Position and Ensure Freedom to Operate. Diagnostic majors are loath to pay for clinical development of a new product without significant IP, ensuring exclusivity. They also want to avoid potential, future infringement lawsuits, after making a considerable investment in launching a novel product. A proprietary product/technology is a sine qua non for partnerships.

By following these guidelines and seeking expert advice, a diagnostic developer can improve the likelihood of successfully commercializing its technology, realizing both wealth creation and improved public health.