Recent Trends in Companion Diagnostic Test Development Partnerships

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1 Recent Trends in Companion Diagnostic Test Development Partnerships Andrew S. Thompson, PhD, Director of Therapy and Analysis, GlobalData Medical, London Tyler Fletcher, Global Head, GlobalData Medical, Toronto GlobalData Medical Commercial Proposition

2 Main Themes 2 Exploring the emergence of companion diagnostic tests Evaluating the types of past partnerships between drug developers and diagnostic test manufacturers Pinpointing the implications of EMA consultation paper on development and lifecycle of personalised medicines and companion diagnostics

3 History of the Companion Diagnostic Test 3 A companion diagnostic test is defined as an in vitro diagnostic device or an imaging tool whose use allows the safe application of a therapy (FDA). Synonyms: Stratified Medicine : particularly used in the UK, by the National Health Service (NHS) Companion therapy Precision medicine Personalized medicine 1991: Van Oirshot refers to Companion Diagnostic Tests to determine efficiency in livestock of Swine Herpes Virus Vaccination 1998: Herceptest launched to enable prescribing of Herceptin 2013: Companion Therapeutics enters the lexicon in FDA Commentary 2014: FDA issues draft guidance on Companion Diagnostic Devices 2017: EMA issues plans for Companion Diagnostic Guidelines

4 Key Development Drivers for Companion Diagnostic Tests 4

5 Cost Effectiveness of Companion Diagnostics: Healthcare Provider and 5 Manufacturer Perspectives Treatment Cost per Month (2013 $) $45,000 $40,000 $35,000 Increasing cost of Treatment (France) $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $ Year of Introduction

6 Cost Effectiveness of Companion Diagnostics: Healthcare Provider and 6 Manufacturer Perspectives Companion Diagnostic an Essential Part of the Clinical Trials Enables/aids drug approval $45,000 $40,000 $35,000 Increasing cost of Treatment (France) Treatment Cost per Month (2013 $) $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $ Year of Introduction

7 Cost Effectiveness of Companion Diagnostics: Healthcare Provider and 7 Manufacturer Perspectives Treatment Cost per Month (2013 $) $45,000 $40,000 $35,000 $30,000 $25,000 $20,000 $15,000 Increasing cost of Treatment (France) Companion Diagnostic an Essential Part of the Clinical Trials Drug a Me-Too Development CDx helps Dx manufacturer, by increasing test volume CDx for generic drugs may hinder branded drug sales $10,000 $5,000 $ Year of Introduction

8 Cost Effectiveness of Companion Diagnostics: Healthcare Provider and 8 Manufacturer Perspectives Treatment Cost per Month (2013 $) $45,000 $40,000 $35,000 $30,000 $25,000 $20,000 $15,000 Increasing cost of Treatment (France) Companion Diagnostic an Essential Part of the Clinical Trials Drug a Me-Too Development Test Used to Optimize a Therapy Dosing Schedule Optimizing dosage may drive up drug sales E.g Warfarin genetic test drove up Warfarin sales by 8% $10,000 $5,000 $ Year of Introduction

9 Cost Effectiveness of Companion Diagnostics: Healthcare Provider and 9 Manufacturer Perspectives Treatment Cost per Month (2013 $) $45,000 $40,000 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 Increasing cost of Treatment (France) $ Year of Introduction Companion Diagnostic an Essential Part of the Clinical Trials Enables/aids drug approval Drug a Me-Too Development CDx helps Dx manufacturer, by increasing test volume CDx for generic drugs may hinder branded drug sales Test Used to Optimize a Therapy Dosing Schedule Optimizing dosage may drive up drug sales E.g Warfarin genetic test drove up Warfarin sales by 8%

10 Approved CDx on the market Companion Diagnostics have arrived Approved CDX, global FDA Approved CDX Adoption of Exponential Emerging, Increase Varied in CDx Availability Platforms Adoption of 2016: First Single NGS CDx Platform Melanoma 6% Gastric Cancer 8% Ovarian Cancer 8% Leukemia 8% Others 6% NSCLC 24% Breast Cancer 30% 20 Adoption 1998: of 10Herceptest established Approval Lab Tech Colorectal Cancer 10% Big 3 Cancers dominate Indications Technological consolidation likely as NGS increasingly adopted

11 Companion Diagnostics Business Models 11 Partnership/Licensing Model Buy-In Model In-House Model Hybrid Model

12 Companion Diagnostics Business Models 12 Partnership/Licensing Model Buy-In Model In-House Model Hybrid Model A pharmaceutical company forms a relationship with a diagnostic test company This includes access to proprietary test platforms and the ability to comply with medical device regulations during development. However, the test developer may have limited experience in conducting largerscale, patient-based clinical trials

13 Companion Diagnostics Business Models 13 Partnership/Licensing Model Buy-In Model In-House Model Hybrid Model A pharmaceutical company acquire a diagnostics capability through acquisition An example is Roche s acquisition of Ventana Medical Systems. rare in the industry pharmaceutical manufacturers are content with either a partnership model or a contracting-for-services model.

14 Companion Diagnostics Business Models 14 Partnership/Licensing Model Buy-In Model In-House Model Hybrid Model Few pharmaceutical companies have the capability to develop companion diagnostic assays in-house Developing a companion diagnostic test entirely in-house can maximize the reward, but can also increase the technical risk. At present, companion diagnostic tests rely on comparatively conservative platforms, be it PCR, IHC, or FISH.

15 Companion Diagnostics Business Models 15 Partnership/Licensing Model Buy-In Model In-House Model Hybrid Model In this model, a companion diagnostic is developed through an external collaboration of some kind, but also internally. This mitigates the risk, but is also very expensive. Companies such as Novartis take this approach.

16 Complex Pharma-IVD Partnerships 16 Recent increase in CDx availability driven by adoption of advanced MDx, towards Next Generation Sequencing and 4th Generation DNA Sequencing Future partnerships will be increasingly single platform, and driven by Bioinformatics capabilities Bristol- Myers- Squibb Figure 69: Multiple Partnerships in Companion Diagnostics during Pharma Diagnostics company

17 Multi-Lateral Partnerships between Biomarker Discoverers, IVD and Pharma 17 Figure 70: Building a Companion Diagnostics Business: Forming Multiple Partnerships Source: GlobalData; Little, Early development of CDx in Targeted Therapy Development Process may synchronise Biomarker identification Increasing direct contact between Biomarker Discoverers and Pharma may reduce multilateral relationships

18 When to Develop 18 Drug Development Phases Target Discovery Preclinical Development Phase I Phase II Phase III FDA filing & approval & launch Biomarker Discovery Biomarker Assay Development Clinical validation of biomarker hypothesis PMA filing & approval & launch Companion Diagnostic Development Phases Early Biomarker Discovery essential in current paradigm Gated development is frequently used

19 Manufacturer Gated Development Pathway (Roche) 19 Target Discovery Preclinical Development Phase I Phase II Phase III Phase IV & Clinic PHC PHC Yes Yes Should we launch with a Companion Diagnostic? Not Yet Yes Should Roche stratify post-launch? Not Yet PHC currently irrelevant Should we commit to a Companion Diagnostic? Yes Not Yet Is post launch stratification currently possible? Yes Do we search for a stratifier for this indication? Yes Is a Companion Diagnostic feasible? Not Yet PHC currently irrelevant Not Yet

20 Tests Ordered Loss of Indication can orphan a CDX; EGFR Expression CDX 20 July 2004: Degree of EGFR expression does not correlate with response to cetuximab March 2005: Cetuximab active against tumors not expressing EGFR by immunochemistry 2003: Test kit not available for clinical testing : Emerging data of alternative predictor for anti-egfr monoclonal antibody therapy (KRAS) February 2004: Drug companion diagnostic approval commercial introduction

21 Deals Analysis: Partnerships and US Deals dominate Companion Diagnostics 21 Partnerships dominate companion diagnostic and personalized medicine deals; little appetite for mergers and acquisitions. Deals involving US companies lead Europe, likely because until recently, CDX lacked a formal definition in the EU, leading to mixed application of tests

22 EMA Companion Diagnostics Concept Paper & IVDR 22

23 IVDR Defines Companion Diagnostics in Europe for First Time Defines Companion Diagnostics for first time in Europe Does this align with how member states each implement personalized medicine? 2. Conformity Testing is described Competent Authorities or EMA are now included alongside Notified Bodies in Conformance tests Different Competent Authorities have different policies or capabilities in Health Technology Assessment

24 Performance Assessment 24 In the case of interventional clinical performance studies, the analytical performance and scientific validity has been demonstrated, taking into consideration the state of the art. Where, for companion diagnostics, the scientific validity is not established, the scientific rationale for the use of the biomarker shall be provided;..in the case of companion diagnostic, the evaluating competent authority or the coordinating competent authority referred to in paragraph 9 of this Article shall, depending on whether the relevant competent authority of the Member State that authorised the medicinal products or the EMA was consulted by the notified body in accordance with the procedures set out in Section 5.2 of Annex IX and Section 3.11 of Annex X, inform that national competent authority or the EMA, as appropriate. Information in the instructions for use..for companion diagnostics, the International Non-proprietary Name (INN) of the associated medicinal product for which it is a companion test. Branded drug upsell is incentive to develop CDx

25 25 Will MDR affect Companion Diagnostic Test Development and Availability?

26 Current In Vitro Diagnostic Development Times in EU (MDD) 26 Based on 10 years of Marketed Products (8000 products, 80,000 date points) New IVD tests can take up to 60 months to develop and enter the market Clinical studies are already a significant constituent of the timeline

27 International Comparisons 27 Genetic Testing Development Histology & Cytology Test Development US Japan EU Months US Early Development Pre-Clinical Clinical Japan EU In Approval Process Months Early Development Pre-Clinical Clinical In Approval Process EU: Directive-based Regulation results in ~7 months following clinical development for CE Certification to be awarded Under the Directive Regime, the ability to market IVD tests is the quickest, compared to US & Japan US & Japan notably longer pre-clinical development, likely due to perceived increased risk Under MDR, Approval Timelines will extend FDA: 510(k) and PMA on average award decisions ~10 months following clinical trials MDR: Companion Diagnostic Test decisions made by EMA or other body after 120 days Will this be an additional 4 months on top of present Notified Body-driven timelines?

28 Impact of MDR on Companion Diagnostic tests 1 28 New Regulation formalizes Companion Diagnostic Tests within the EU Previous MDD certifications took on average 7 months, following 48 month development US 510(k) decisions are taken 10 months after submission, following 71 months development MDR specifies up to 4 months decision making by EMA and others in addition to other regulatory decisions MDR will not only increase product approval timelines compared to MDD, but will move times closer to FDA, and potentially longer FDA operates within a single agency, multiple offices MDR for CDx will operate via 33 Competent Authorities, plus EMA as well as 14 Notified Bodies

29 Impact of MDR on Companion Diagnostic tests 2 29 Launching new CDx in Europe will carry higher perceived financial risk Approval by national Competent Authority will likely be de facto device approval for that member state MDR approval will not automatically mean CDx is reimbursed/accepted in all member states Increased requirement for clinical data will increase likelihood of uptake Selection of Competent Authority likely to be critical Regulatory approval timelines will increase Clinical assessment timelines will increase Pre-clinical timelines may increase, to mitigate risk of regulatory failure Launching products in EU may move from perceived low risk to perceived higher risk Global product launch strategies undoubtedly affected

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