In vitro diagnostics and the value proposition of stratified medicines

Transcription

1 In vitro diagnostics and the value proposition of stratified medicines 17 th June 2010 Edward D Blair, PhD MBA Managing Director Integrated Medicines

2 Presentation aims to cover.. The potential benefits offered by a stratified medicine strategy to pharmaceutical industry Diagnostic value as leverage in companion diagnostic relationships The cash value and market for companion diagnostics and stratified medicines Wider stakeholder influences on stratified medicines in terms of regulation, reimbursement and improved health outcomes. The future of stratified medicines as part of predictive healthcare 2

3 A Healthcare Value Net* Direct Healthcare Providers (clinicians, primary practitioners, hospital workers) Patient (consumer and beneficiary of healthcare) Government/ Regulators/ Payors Industry (Pharma co s & associated valuechain, eg, Dx Co, CRO) *Brandenberger & Nalebuff,

4 Personalised Medicines THERAPEUTIC NEED INNOVATIVE MEDICINES Right Medicine Right Patient Right Disease Right Time 4 PATIENT-TARGETED THERAPIES Right Dose Right Response Right Price

5 * Keys issues with medicines today are.. Safety and efficacy 5 *5th 12th September 2005

6 Why does pharma need new approaches to development & commercialisation? Metrics suggest that fewer than 1 in 10 entities entering clinical trials make it to the markets AND some of those that do make it face withdrawal and litigation ($253M Vioxx verdict!?) 6

7 CDx offers increased revenue through better commercialization: Migration from block-buster treatments to high-value targeted treatments * Low Hi volume, low price Billion dollar sales line Moderate Price of medicine BLOCK-BUSTER One drug fits all; poor response rates (20-80%) & risk of SAEs (>1%) SEGMENT-BUSTER Drug responses monitored for efficacy and SAEs using diagnostic-type test (CDx) NICHE-BUSTER Drug given to specific patients determined by predictive tests (Mol Dx; PGx) High Low volume, hi price All Selected Targeted Number of patients treated 7 *From Blair ED (2009) DDW 3:27, after Trusheim et al (2007) NRDD 6: 287

8 The test continuum Prognostic How is the disease likely to progress in the patient? Biomarker Discovery what biological parameters are changed? Validation are these changes reproducible? Qualification Companion Diagnostic (CDx) Does the patient have a specific disease and will he/she respond to therapy? Commercialization Surrogate Clinical - does the disease status appear to be changing? PK/PD - does the lack of response reflect no efficacy or poor pharmacology? 8

9 Timelines for Diagnostic and Medicine Co-Development Discovery Drug Development Pre-clinical Phase I Latest date to begin companion test programme Phase II Phase III FDA Review Concurrent FDA approval Project Initiation Diagnostic Development Marker Discovery Test Development 8 years 15 years Regulatory Review 9

10 Impact of companion tests (CDx) Reduced time to peak sales Enhanced peak sales Sales Extended life cycle Faster to market Faster to market or Faster to or Faster to Decision Decision 0 5 Time -years Adapted from Gilham, Drug Discovery World 2002

11 Improvements in attrition rates? Booth et al NRDD 2: 609 (2003) Walker & Newell NRDD 8: 16 (2009) 11

12 Improvements in attrition rates? 12 Booth et al NRDD 2: 609 (2003) Walker & Newell NRDD 8: 16 (2009) Factors underlying this difference are likely to include the targeted nature of kinase inhibitors and the improved design of clinical trials; for example, biomarkerdriven patient stratification.

13 CDx offers increased revenue through better commercialization?* *Trusheim et al NRDD 6: 287 (2007) *Agarwal PharmExec.com (Jan, 2009) 13

14 CDx extends drug lifecycle?* In some scenarios, a test can ensure that a late-in-life drug can retain market share vs (generic) competition 14 *Agarwal PharmExec.com (Jan, 2009)

15 Companion Test? Discounted Cash Flow - No Dx, NPV = $892 (15% dcf) No Revenue & Costs Year Revenue Costs Discounted Cash Flow - Companion Dx, NPV = $2,694 (10% dcf) Yes Revenue & Costs Year Revenue Additional Revenue Costs Dx test

16 Impact of CDx co-development* ~$200M ~$1000M ~$800M ~$2000M (~$1800M) 16 Davis et al (2009) Nature Rev Drug Disc 8: 279

17 How could the NPV be apportioned in a Dx-Rx deal? Diagnostics Partner Revenue & Costs Discounted Cash Flow - Companion Dx, NPV = $2,694 (10% dcf) Revenue & Costs Year Dx NPV = $84 M Revenue & Costs Year Revenue Additional Revenue Costs Dx test Revenues & Costs Pharma Partner Revenues & Costs Year Rx NPV = $2,610 M 17

18 PharmaCo-DxCo Relationships* Diagnostics Partner Revenues & Advantage Indirect & Scope Economy Direct & Scale Economy Make-to-order Outcome: Market penetration $1.9bn (98%R, 2%D) Use-to-order Outcome: Market expansion $1.3bn (99%R, 1% D) Integrated Outcome: Co-developed test & medicine $1.8bn (97%R, 3%D) Turnaround Outcome: Product Rescue 1.8bn (90%R, 10% D) Lo Diagnostics Partner Power ( Pharmaceutical Partner Urgency) Hi 18 *Blair, Future Medicine 3/2010; PMC response to FDA, 12/2009

19 PharmaCo-DxCo Relationships* Diagnostics Partner Revenues & Advantage Indirect & Scope Economy Direct & Scale Economy Make-to-order Outcome: Market penetration $1.9bn (98%R, 2%D) Use-to-order Outcome: Market expansion $1.3bn (99%R, 1% D) Integrated Outcome: Co-developed test & medicine $1.8bn (97%R, 3%D) Turnaround Outcome: Product Rescue 1.8bn (90%R, 10% D) Lo Diagnostics Partner Power ( Pharmaceutical Partner Urgency) Hi 19 *Blair, Future Medicine 3/2010; PMC response to FDA, 12/2009

20 Benchmark companion tests Pfizer Celsentri (maraviroc) and Monogram Biosciences Trofile test (6AUG07) Test used in maraviroc clinical development Approval of drug drives demand for test Income up-lift direct to Monogram MerckSerono Oncology and Kras tests (1H09) Support for use of several tests in clinical development of ERBITUX Representations to regulators re: Erbitux labelling Ensuring reimbursement through NICE for tests at full cost Merck (MSD) relationship with Celera on cancer biomarkers and companion tests may involve pharma royalty payments to DxCo 20

21 PharmaCo-DxCo Relationships* Diagnostics Partner Revenues & Advantage Indirect & Scope Economy Direct & Scale Economy Make-to-order Outcome: Market penetration $1.9bn (98%R, 2%D) Use-to-order Outcome: Market expansion $1.3bn (99%R, 1% D) Integrated Outcome: Co-developed test & medicine $1.8bn (97%R, 3%D) Turnaround Outcome: Product Rescue 1.8bn (90%R, 10% D) Lo Diagnostics Partner Power ( Pharmaceutical Partner Urgency) Hi 21 *Blair, Future Medicine 3/2010; PMC response to FDA, 12/2009

22 PharmaCo-DxCo Relationships* Diagnostics Partner Revenues & Advantage Indirect & Scope Economy Merck-Serono cetuximab Direct & Scale Economy Make-to-order Outcome: Market and penetration $1.9bn (98%R, 2%D) DxS KRAS test AZ/ Prometheus budesonide Use-to-order Outcome: Market and expansion $1.3bn (99%R, 1% D) Prometheus Serology 7 test Pfizer maraviroc Integrated Outcome: Co-developed and test & medicine $1.8bn (97%R, 3%D) Monogram trofile test GSK abacavir Turnaround Outcome: Product and Rescue 1.8bn (90%R, 10% D) 23andMe HLA SNP test Lo Diagnostics Partner Power ( Pharmaceutical Partner Urgency) Hi 22 *Blair, Future Medicine 3/2010; PMC response to FDA, 12/2009

23 Realistic CDx Market Value? CDx Market Opportunity USD billions High Low Mid-Range Single product products per therapy area Top 10 therapy area 23

24 An alternate market assessment* *Allen et al (Oct 2009) The new science of 24 personalized medicine see

25 An alternate market assessment* ~$42bn ($54bn $90bn) *Allen et al (Oct 2009) The new science of 25 personalized medicine see

26 Examples of Companion Diagnostics* 26 *M Allison NBT 26(5):509 (2008) Is Personalised Medicine finally arriving?

27 Examples of Companion Diagnostics (cont)* 27 *Case for Personalised Medicine, 2 nd Edition (2009),

28 Unmet needs by therapy area* 28 *Davis et al (2009) Nature Rev Drug Disc 8: 279

29 Unmet needs by therapy area* Asthma Diabetes CNS Drugs 29 *Davis et al (2009) Nature Rev Drug Disc 8: 279

30 Summary so far. The potential benefits offered by a stratified medicine strategy to pharmaceutical industry Diagnostic value as leverage in companion diagnostic relationships The cash value and market for companion diagnostics and stratified medicines Wider stakeholder influences on stratified medicines in terms of regulation, reimbursement and improved health outcomes. The future of stratified medicines as part of predictive healthcare 30

31 A Healthcare Value Net Direct healthcare providers Government/ Regulators/ Payors Patient (consumer/ beneficiary of healthcare) Industry Pharma co s & associated value-chain, eg, Dx Co 31

32 Managing patient expectations 32 British Medical Journal 1999;319 (18 September):762.

33 Patient Awareness & Support Policing the quality of information that is available to patients via the Internet Quality assured Medicine Guides c/o the Medicines Information Project (MIP) at Royal Society initiative on the Impact of ICT on health and healthcare EFPIA: The Informed Patient - The Value Of Health Information (SEP05) Individual pharma companies: medicines specific websites. Legislation such as the Genetic Information Non-discrimination Act (GINA) 33

34 CPD for Medical Practitioners From GMC website ( accessed 19SEP05) Does patient- centredness improve patient care or safety? NHS National Genetics Education and Development Centre* Nuffield Centre for Bioethics Pharmacogenetics: Ethical Issues (SEPT03) Royal Society initiatives on (1) Personalised medicines: hopes and realities (21SEP05); (2) Pharmacogenetics Dialogue ; and (3) Genetics & Health Training in translational medicine *NHS Modernising Scientific Careers programme pilots in October 2009 to enhance physician knowledge of genetic medicines 34

35 A Healthcare Value Net Direct healthcare providers Government/ Regulators/ Payors Patient (consumer/ beneficiary of healthcare) Industry Pharma co s & associated value-chain, eg, Dx Co 35

36 Key Driver: Reimbursement Health Technology Assessment* (cf UK NICE) *Hughes NRDD 8: 261 (2009) Andrew Dillon, Chief Executive of Nice commented. the NHS will only pay for the drug when it has been proven to work 36

37 Key Driver: Reimbursement Health Technology Assessment* (cf UK NICE) *Hughes NRDD 8: 261 (2009) 37 To implement this risk-sharing agreement, clinicians are required to measure the levels of serum M protein (SMP; a specific biomarker to for work tumour load) after a maximum of four cycles of treatment. If the patient has a reduction in SMP of 50% or more, indicating a complete or partial response, treatment will continue and the NHS will pay. If not, the JnJ must rebate the full cost. Hughes NRDD 6: 945 (2007) Andrew Dillon, Chief Executive of Nice commented. the NHS will only pay for the drug when it has been proven

38 Policy changes and EU/ UK initiatives EU IVDD - Consultation to be released late in 4Q2010 Includes proposal to assess CDx, LDTs and PoC tests Inclusion of clinical evidence that covers validity and utility UK DoH Innovation Pass Initiative, consultation until 8FEB2010 It will make selected innovative medicines available on the NHS for a time-limited period, prior to a NICE appraisal. Funding will be drawn from a new ring-fenced 25m budget Aims to give earlier access to innovative drugs for patients with the greatest need UK Technology Strategy Board stratified medicines innovation platform Builds on OLS business case Regulation and reimbursement as driver not barrier Short term (oncology, inflammation), mid-term (diabetes, COPD), long-term applications Other potentially important activities Medical Technology Strategy Group (MMTSG) - NICE and industry ceating new evaluation pathway for medical technologies. EU Innovative Medicines Initiative Call 2 on prediction of efficacy Stratified medicines-focussed alliances involving industry stakeholders EDMA, BIVDA, ABPI, Wellcome, EPEMed, CRUK NHS translational and genetic medicines educational programmes (2010) 38

39 Macroeconomic win-win Pharma and Dx Companies increase revenue Healthcare providers spend less on expensive low through put (beds, surgery) Regulators & insurers see bigger bang for their bucks Patients will stay healthier longer All round societal benefits 39

40 1. Insult/ trigger 2. Inflammation 3. Tissue remodelling 4. Symptomatic disease Key Driver: Changes to medical practice Relative Treatment Efficacy Relative Disease Severity 40

41 Key Predictive Driver: Medicine Changes to medical practice Earlier diagnosis + effective treatment = better long term outcome Predictive medicine Reactive medicine Relative Treatment Efficacy Relative Disease Severity 1. Insult/ trigger 2. Inflammation 3. Tissue remodelling 4. Symptomatic disease 41

42 The Future of Healthcare Cambridge neuroscientist, Guy Brown Acute disease declines Degenerative diseases increase Longer life, but reduced quality Delayed death, but not aging 42

43 Aging and QOL 43

44 Discussion Prevention is better than treatment = the real benefit of predictive healthcare and stratified medicines Variety of stakeholder influences = industry, providers, patients, regulators, payors, governments. Change essential but may be slow = how to shift gear Impetus is population demographics locally and globally and healthcare budget as %GDP Mechanisms need to be created to facilitate development of preventative medicines Key role for IVDS through molecular markers, companion diagnostics and pharmacogenomic tests 44

45 Thank you and..any questions? Eddie Blair Integrated Medicines Ltd 45