April 2, 2009:
Personalized Medicine Can Increase Revenues
Cori Gorman, PhD,
MBA
DNA Gateway International, LLC www.dnagateway.com
The approval of Herceptin in 1998 was the opening shot that heralded in
the era of personalized medicine. Prior to that, it was generally
accepted within the industry that while patient stratification and
personalized medicines was a good idea for patients, it was not a good
business model. And although the multi-billion dollar success of Herceptin
completely debunked that theory, the industry has still been slow to
embrace biomarkers and targeted medicine. This is reflected number of
deals done in the biomarker space since 2007, despite the plethora
biomarker starts-ups. In that time frame, only 34 biomarker deals were
publically announced and these were primarily licensing and research
collaborations (source: Recap). However, it appears that economics and
the industry have evolved to the point where personalized medicine will
become increasingly important. This is the result of several key
developments. One is the FDA’s Critical Path Initiative, which started
in 2004 in response to the high failure rate of drugs in the clinic and
unforeseen toxicology. It is anticipated that the global demand for
biomarkers will grow to $12.8 billion by 2012 thanks in part to the FDA's
Critical Path. Additionally, the economics of health care are changing.
As the cost of health care increases, governmental and health insurance
agencies are increasingly denying payment of treatments for which there
isn’t data supporting a reasonable likelihood of success.
An example of added benefit of understanding the use of a biomarker can be
illustrated by the case of Erbitux in colorectal patients. The drug is
sold by Bristol-Myers-Squibb in the US and Merck KGaA outside the US and
Canada. These two companies have diverse philosophies regarding the use of
biomarkers. BMS has resisted the use of biomarker tests to select
patients, while Merck KGaA has embraced the idea of using biomarkers to
identify patients who will respond to the drug. The launch of this EGFR
targeted drug was not immediately a success in the US. Though approved for
use in colorectal cancer in 2004 it has been slow to gain in acceptance by
clinicians in the US. AVASTIN, in combination with intravenous
5-fluorouracil–based chemotherapy, remains the standard of care in the
US. In Europe however the story is different; Merck KGaA sells Erbitux in
the EU and here it is standard of care.
In 2008 a link between efficacy of the drug in colorectal cancer and the
status of a patient’s KRAS gene was discovered. Merck KGaA has
aggressively added this information to the selection of patients with
colorectal cancer who can be prescribed the drug. By using this better
understanding of which patients will respond to aggressively market the
efficacy of the drug in this subset of patients, Merck KGaA Erbitux sales
rose 20% in 2008 to 565 million euros. In contrast Bristol-Myers’
Erbitux sales in the United States fell 2 percent to $182 million in the
fourth quarter of 2008.
Currently only about 12% of the trials that large pharma and biotech
carries out includes biomarker analyses. That number will undoubtedly
increase since all indications are that the future success of these
companies will depend on their ability to incorporate an effective
biomarker strategy into the product development and clinical design. These
kinds of economic pressures will only increase as the population and the
age of the population increase.
