When Stephen Little co-founded a molecular diagnostics company in 2001, he gave numerous presentations to pharmaceutical companies touting the benefits of tests that can tell which patients are likely to respond to a particular therapy or experience side effects. But most drugmakers were focused on blockbusters, and, since these so-called 'companion diagnostics' divide patient populations into smaller groups, they threatened to contract, not expand, their markets. As such, Little recalls, “there was not a great deal of enthusiasm.”

Ten years later, the tide has changed for Little and the field of companion diagnostics. In 2009, Little's company, Manchester, UK–based DxS, was bought by the Dutch technology company Qiagen, where Little now serves as vice president of personalized health care. Qiagen currently has partnerships with more than 15 pharmaceutical companies, including, most recently, an agreement announced last month with Eli Lilly to develop a PCR-based test to detect mutations in the gene encoding Janus kinase 2 and thereby identify individuals with blood cancer who are likely to respond to a drug in early-stage development at the Indiana-based company.

This deal follows less than a month after the US Food and Drug Administration (FDA) approved two cancer drugs—Zelboraf (vemurafenib) for BRAF-mutation–positive metastatic melanoma on 17 August, and, a week later, Xalkori (crizotinib) for people with non–small-cell lung cancer driven by an ALK (anaplastic lymphoma kinase) fusion gene—together with their companion diagnostic tests. Notably, these two drug-diagnostic combined approvals represent divergent development strategies on the part of big pharma. The test accompanying Roche's Zelboraf was developed in house at the Swiss drug giant's diagnostics arm, Roche Molecular Diagnostics in Pleasanton, California. In contrast, New York–based Pfizer's Xalkori comes with a diagnostic developed with Abbott Molecular of Des Plaines, Illinois.

In good company: Drugmakers develop companion diagnostic tests alongside novel therapeutics. Credit: istockphoto

Regardless of the business approach, experts agree that it's best to start developing companion tests alongside therapeutics well before compounds even enter their first clinical trials. “The sooner we can partner, the better,” says Little. Walter Koch, head of global research at Roche Molecular Diagnostics, credits the parallel development of a diagnostic with accelerating research on Zelboraf, which first entered phase 3 testing less than 20 months before FDA approval. The drug specifically inhibits a mutant BRAF protein found in about half of all patients with melanoma and can produce dramatic responses in these individuals. Knowing who is likely to respond to the drug up front, notes Koch, helped the company design better clinical trials along the way, and, ultimately, created a better medicine for patients.

Dialing up diagnostics

But not all diagnostic products will go cleanly through the development process. Biology can get in the way—for instance, biomarkers sometimes emerge only late in clinical trials, notes Scott Patterson, executive director of medical sciences at Amgen, headquartered in Thousand Oaks, California. But more often, poor alignment among the various entities that make diagnostic products and therapeutics hinders the development of companion tests, according to a report released in April by Diaceutics, a business consulting and software firm based in Belfast, UK. Other barriers afflict the business side, such as spotty reimbursement from insurance companies and competition from tests that are not FDA-approved.

With an eye to encouraging diagnostic and drug co-development, the FDA released draft guidelines on 14 July calling for companion diagnostics to be approved together with their accompanying therapies if the tests are essential for the medicines' safe and effective use. Amy Miller, vice president of public policy at the Personalized Medicine Coalition, an industry and patient group in Washington, DC, welcomes the new clarity to the regulatory process but notes that more details are still needed, such as how the FDA will evaluate diagnostic tests for drugs already on the market.

Those clarifications are needed, she says, as more and more drug developers move into the companion diagnostic arena. According to a report released in August by Visiongain, a London-based business information and consultancy group, sales of companion diagnostic kits and services reached $1.3 billion in 2010 and are expected to rise to $3.5 billion by 2015. The accompanying drugs can earn big, too: 16 drugs paired to tests pulled in $17 billion total in sales last year, according to Mollie Roth, chief operating officer at Diaceutics.

Those numbers serve as vindication for Little. “Good science and good medicine have actually ended up making a good business,” says Little. “It's been interesting to really watch the change in opinion in the drug industry from something we do not want to something we must have. There has been quite a switch.