Precision Medicine's March to Market: 'Pairing' for Success

In the past few years, we’ve seen the biopharmaceutical industry begin to shift from a one-size-fits-all blockbuster approach toward an individualized, precision science model. This transformation has propelled companion diagnostics (CDx) into playing a more critical role than ever in the commercialization of biopharmaceutical therapeutics. Therapeutic (Rx)-CDx pairings are in development or have already launched in multiple therapeutic areas-including cardiovascular (CV), CNS, inflammation, oncology, and virology-and this is expected to continue across most other disease states. 

As a point of reference, between 2012 and 2015, the FDA approved approximately 30 new targeted therapies (treatments that more precisely identify and attack damaged cells or pathways), many of which benefit from a CDx pairing. In 2014 alone, eight of the 41 novel drugs approved were biomarker-directed therapies. The significance and frequency of biomarker testing is rising across the industry, based on a heightened focus on-and advancement of-our understanding of genomics, identification of potential drug targets, and continued development of biomarker-associated therapeutics.

With this transforming environment comes opportunity. Successfully managing the development and commercialization of Rx-CDx pairings has become a source of competitive advantage for biopharma and diagnostics manufacturers alike, yet it requires a unique and innovative approach. In this article, we outline four “can’t miss” requirements for realizing success in commercializing Rx products paired with a CDx:

• Rock-solid CDx landscape understanding

• Symbiotic biopharma and diagnostic partnership

• Pressure-tested Rx-CDx development approach

• Integrated Rx-CDx launch and commercialization planning

Rock-solid CDx landscape understanding

To stay ahead of the curve in personalized medicine, it has become increasingly important to hold-and act on-an informed position regarding events playing out in the CDx market, just as any manufacturer would in Rx. If upstream assumptions about the market are off base or outdated, so will be the resultant strategy. To further drive this point home, many significant aspects of the CDx market are changing in the very immediate term, as demonstrated below:

• Biomarker testing has historically been a one-off, expensive and narrowly focused intervention (i.e., only testing for one gene or protein). This is changing with the advent of multi-plex testing and next-generation sequencing (NGS), promising a higher throughput and more comprehensive analyte read-out. Select manufacturers are getting involved through innovative cross-industry collaborations. For example, two primary NGS consortia include: 1) Thermo Fisher with Novartis and Pfizer, and 2) Illumina with AstraZeneca, Janssen, Sanofi, and Merck Serono. Many biopharma companies that have not yet sought or committed to a particular NGS consortium are evaluating which path to take. NGS is a potential game-changer for players in CDx and opportunities to collaborate on the technology may likely impact future clinical and commercial success rates of Rx-CDx pairings.

• Generally, clinicians have dealt with limited availability of tissue with which to test, especially where biopsies are challenging to obtain (e.g., lung). Based on this unmet need, many companies are now focused on two new objectives: finding ways to acquire testing samples through less invasive means, such as blood/serum testing, and tailoring promotional efforts to new or different customers like pathologists and surgeons, as opposed to just prescribing physicians. Such changes may introduce new channels for marketers to consider and unique commercial scenarios altogether (e.g., brand decision-making at time of sample testing).

• Historically, many Rx-CDx stakeholders have benefited from the utilization of laboratory-developed tests (LDTs). For example, reference labs were able to maximize revenue by developing their own “homebrew”-or LDT-tests at a fraction of the cost larger Dx companies would charge. Payers and patients would then also benefit from more cost-efficient lab economics. This, however, is likely to change as the FDA is increasingly implementing more stringent rules on what tests will be included in an Rx label. The FDA recently published LDT guidance in an attempt to enforce the changing regulatory requirements of LDTs. This is a significant milestone following its release of the “preliminary” guidance on LDTs in 2011.

o   Changes with LDTs also have implications for how payers may (or may not) cover such Rx-CDx combinations moving forward. Ultimately, testing laboratories have begun encountering financial difficulties with declines in reimbursement and possible elimination of payment for LDTs, which has been one of their core sources of revenue. As laboratories are pushed out of business or restructured, Rx-CDx manufacturers are being challenged to find new ways to ensure tests are pulled through and paid for altogether.

Many other aspects of the CDx marketplace such as coding, regulatory pathways, systemization of test scoring, and standardization of testing protocols will undoubtedly continue to evolve.

It’s unlikely that any one market report or research effort will provide the perfect CDx market backdrop or set of assumptions, especially considering things will continue to change. However, manufacturers that have an informed perspective on CDx and recognize the value of pinning commercialization strategy to both Rx and CDx market insights are likely to fare better with their launch effort and have more success in addressing difficult tradeoff decisions that will inevitably need to be made throughout development and launch (e.g., co-develop with FDA-approved current CDx platform or take a shot on an unproven, yet potentially more sensitive, new platform).

Symbiotic biopharma and diagnostic partnership

Biopharma and diagnostic companies are often at odds when it comes to topics such as culture, incentives, and business models. For example, diagnostic companies have historically operated with fewer compliance hurdles, smaller budgets, less rigorous clinical trials, and shorter timelines than their pharma counterparts. Not surprisingly, diagnostic companies care greatly about maximizing utilization of their tests-regardless of resultant therapeutic choice or utilization. However, biopharma companies prioritize maximizing product utilization, regardless of test used. While both scenarios conflict, neither party would be successful without the other.

Another important aspect of any Rx-CDx partnership includes the nature of the diagnostic company itself. Is the diagnostic company an in-house division of the biopharma company (e.g., Roche/Roche Diagnostics)? If not, will the biopharma team seek to in-license an existing approved test or simply partner with an external diagnostic company? Each unique biopharma and diagnostic partnership scenario will foster different opportunities and barriers to be considered and addressed. In short, the key then becomes how to best design a mutually beneficial Rx-CDx partnership and operating protocol based on what scenario makes the most business sense.

A good starting point with any business collaboration is to define and align on business objectives and goals for the partnership. An example might be to “maximize identification of eligible patients for a therapy by using the best available test.” It’s also important at the onset to establish an operating protocol with both parties by defining and documenting items such as working principles, roles and responsibilities, shared timelines, and governance. Ongoing management of and feedback on the operating protocol might be handled by a joint steering committee with mutual representation. There’s also great value in outlining the expectations and plan for collaborating on key strategic decisions and milestones throughout development.

One of the more complicated-yet unavoidable-aspects of Rx-CDx collaboration is value and incentive sharing. We encourage collaboration partners to define an incentive plan that motivates both parties to resource and deploy their respective development efforts in parallel. If incentives are not objective, attainable, or equitable, it is unlikely both parties will be motivated to work symbiotically with one another.

An additional consideration for many companies is how they approach exclusivity with their product and/or test. The FDA is becoming increasingly specific with its Rx-CDx requirements, to the extent that 1) only FDA-approved tests are in the label and 2) specific tests are appearing or referenced in the label of approved therapeutics (e.g., Tarceva and the cobas® EGFR Mutation Test). Partnering organizations will need to research and agree on whether there is mutual interest and rationale for establishing exclusivity agreements (or not) at an early stage in development in order to minimize the potential for downstream disturbances.

Pressure-tested Rx-CDx development approach

Identifying and incorporating an optimal assay (i.e., one that is technically feasible and commercially viable) early in the drug development process will save many headaches further downstream. In this section, we will discuss elements of establishing an effective Rx-CDx development approach.

It’s important to ground an Rx-CDx development strategy on early alignment of shared objectives, deliverables, and milestones. Once a biopharmaceutical manufacturer has verified the need for a CDx, it’s essential next to evaluate if CDx co-development should occur in-house, be in-licensed from existing FDA-approved assays or platforms, or be done in partnership with an external diagnostic development firm-such as a contract diagnostic organization (CDO). Each scenario will have cost/benefit tradeoffs.

Biopharma organizations with an in-house diagnostics division (e.g., Roche, AbbVie) often have the advantage of managing their own integrated Rx-CDx development processes and decisions; however, even they are still seeking creative ways to improve their development capabilities and organizational efficiencies. The many challenges and requirements noted in this article are-without a doubt-applicable to the larger and more experienced Rx/CDx corporations as well as the smaller players.

After identifying and evaluating the appropriate pathway for co-development, potential areas for alignment between the Rx and CDx arms should be defined and reviewed collaboratively. These areas of alignment might include items such as timelines, cost-sharing milestones, governance (business objectives and incentives), business model gap identification, regulatory and labeling requirements, and launch-readiness expectations. It’s incredibly important to note that a successful Rx-CDx co-development experience may result in higher clinical trial success rates and optimized development timelines (which also translates to cost efficiencies). Authors of a recent study of 676 non-small cell lung cancer (NSCLC) trials observed that biomarker identification, incorporation, and planning increased success rates by more than 50%, with trials completing in less than half the standard time.

Contrary to a seamless co-development experience, potential pitfalls throughout development can drastically diminish success rates and product value if not avoided. One of the more common pitfalls is that the Rx collaborator may be focused on one lead asset while the Dx partner may be focused on a broad set of tests, diseases, and platforms. This can lead to disproportionate development investments and efforts and misaligned timelines between the two companies-all the more reason that a shared vision and subsequent planning integration in development processes is key. Pitfalls will inevitably play out differently for each company and development technology; however, having an objective team or a partner on both sides with experience in Rx-CDx development and a willingness to truly collaborate is crucial to avoiding or mitigating such stumbling blocks.

Rx-CDx co-development process requirements are likely to differ across therapeutic areas as well. For example, oncology is inarguably the most developed, understood, resourced, and applied therapy area for CDx today. First, the idea of personalized medicine is incredibly important and applicable in oncology since the disease itself is unique to every patient. Oncology offers many clear advantages for the co-development of a CDx. Early and proactive CDx incorporation during Rx development will often reduce trial costs through more efficient patient selection and expedited timelines; it may also increase success rates based on a more specific and responsive population (payers tend to respond positively to such data).

A great example in oncology would be Pfizer’s Xalkori, indicated for ALK-positive metastatic non-small cell lung cancer (mNSCLC). mNSCLC is a crowded and tremendously high budget-impact market, but early ALK+ testing has many benefits: it identifies EML4-ALK translocations if present, improves ALK+ patients’ outcomes by treating the underlying genetic alteration, and potentially saves on treatment cost for payers by screening for and selecting a smaller subset of patients who are likely to receive benefit from Xalkori, since only 5% of mNSCLC patients exhibit EML4-ALK translocation. Working up to launch, Pfizer had primed the market with unbranded campaigns targeting various stakeholders (e.g., oncologists, pathologists, patients/caregivers) to not only raise the awareness for ALK testing but to drive demand through both “pull” and “push” strategies. Other examples of best practices Pfizer deployed to support its Rx-CDx launch were as follows:

• Pfizer collaboration with IASLC (International Association for the Study of Lung Cancer) to develop/distribute “Atlas of ALK Testing in Lung Cancer” for pathologists.

• Pfizer collaboration with ACCC (Association of Community Cancer Centers) in the US to develop ALK awareness/educational initiatives prior to drug launch.

• Utilization of a “Joint Steering Committee” between Pfizer and CDx partner (composed of Commercial, Regulatory, and Clinical leads from each party) to proactively address joint opportunities and challenges.

The brand has performed well in its first four years on the market with global revenue approaching half-a-billion dollars in 2014 (US dollars). Beginning with a well-planned and executed Rx-CDx co-development and commercialization approach far in advance of product launch established a foundation for such a strong uptake.

While oncology has certainly “greased the skids” for future Rx-CDx development opportunities, other niche markets in non-oncology therapy areas for Rx-CDx development include the likes of genetically defined populations of schizophrenia and Alzheimer’s in CNS, CV disorders associated with biomarkers such as atherosclerosis and thrombosis, and patients in inflammation and virology that could benefit from prediction and prognostic tests.

Integrated Rx-CDx launch and commercialization planning

Delivering on regulatory requirements, reimbursement hurdles, and a strong commercial strategy for a therapeutic and test requires careful parallel processing. Both an Rx and CDx require diligent planning leading up to launch, plans that typically contain distinct timelines, separate regulatory milestones, and an order of magnitude difference in resource dollars. So how can both assets be developed and prepared for launch in parallel?

The key here is early, proactive, and transparent communication between partners. The content expertise required for Rx and CDx launch planning and execution is best left in the hands of each organization; however, it is never too early in the partnership to align and/or merge launch timelines and plans. A number of important decisions should be made jointly-for example, the value proposition of the Rx-CDx or how the CDx will be incorporated into the Rx target product profile. It’s important that such decisions are made early and incorporated into both Rx and CDx launch plans. Myriad other activities and work plans are specific to Rx or CDx, but both organizations would benefit from sharing them, nonetheless.

The framework of an Rx-CDx co-development process, as well as key collaboration opportunities are noted in the figure below.

(Click to enlarge)

Another collaboration opportunity includes sharing and aligning on field force objectives, strategies, and call planning so as to prevent account overlap or conflicting messages. With respect to access and reimbursement, consistent and integrated value strategy and messaging by Rx and CDx counterparts are key to securing adequate coverage with payers. Both organizations should consider the impact of things like bundled payments, contracting/rebates, and price increases for the therapeutic and diagnostic, informed by feedback from a variety of payer organizations.

Lastly, mutual learnings and data should be shared across organizations. Whether it is market research, investigator feedback, or demand forecasts, there will be plenty of opportunity to inform one another on key aspects of launch strategy and planning as they relate to the Rx-CDx agreement. The expectation is that better alignment on market and planning assumptions will help prevent potential misfires or distractions as the Rx-CDx approaches the market.

Keeping pace

The advent of precision medicine is playing out before us. Biopharma companies that desire to realize true value from CDx and maintain or establish a leading position with their technology will need to ensure they’re getting the most from their commercialization approach. More specifically, involved organizations will greatly benefit from learnings and insights gathered from development and commercialization of Rx-CDx technologies in the past and should proactively consider and plan around the many expected strategic and operational challenges associated with developing personalized medicine technologies.

Understanding the broader landscape of the Rx-CDx environment will also help guide organizations in determining what type of partnership is best for them or their assets and what planning will be required to maximize success at launch. It is our belief that developing and executing an Rx-CDx commercialization approach that addresses the four “can’t miss” requirements noted herein will provide manufacturers a tremendous head start in attaining a competitive edge in the burgeoning field of precision medicine.

Jeff Liepman is Executive Vice President, jliepman@promidianconsulting.com; Kevin Barnett is Partner, kbarnett@promidianconsulting.com; Kun Lee is Vice President, klee@promidianconsulting.com; and Nathan Lyman is Consultant, nlyman@promidianconsulting.com; all with Promidian Consulting.