With the boundaries between research and diagnostics continuing to blur, companies are working on building strategies in which collaboration and innovation are more important than ever. One new set of collaborative partners is pharmaceutical companies. The companion diagnostic (CDx) market is an area where companies’ instruments and clinical businesses are conflating, likely because the sector involves an integrated approach for clinical testing. With the participation of primarily instrument companies like Thermo Fisher Scientific, diagnostic and instrument companies such as QIAGEN, and clinical companies like HTG Molecular Diagnostics, the CDx sector is proving itself to be an attractive market.

CDx are tests, usually in vitro devices (IVDs), designed to assess whether a patient would be likely to respond positively to a corresponding, or companion, targeted therapeutic drug treatment. As of February 2018, the FDA has cleared or approved 41 CDx devices (IVD and imaging tools). Due to the prevalence and accessibility of technologies such as DNA sequencing continuing to rise, the development and regulatory clearing of CDx is expected to grow even more rapidly in the coming years.

The Steady Rise of CDx

This rising approvals of CDx is not lost on companies that traditionally were not in the market. For example, in November 2015, Thermo Fisher entered a long-term agreement with Novartis and Pfizer for the development and commercialization of a multi-marker, NGS-based CDx test for non-small cell lung cancer, while in October 2017, the company announced an oncology CDx agreement with Blueprint Medicines to expand its NGS-based Oncomine Dx Target Test, which had been approved by the FDA earlier that year.

In fall 2016, HTG partnered with Merck KGaA in a broad CDx master agreement, utilizing the company’s EdgeSeq gene expression technology, and the companies entered a complementary master collaboration agreement in December 2017 under which HTG will develop and manufacture a custom profiling assay for biomarker research. Likewise, other major players in the life sciences such as Agilent Technologies and NanoString Technologies have also partnered with pharmaceutical companies in CDx agreements, such as BMS and Eli Lilly, and Medivation and Astellas, respectively.

Thermo Fisher, QIAGEN and HTG all describe CDx as a priority. According to T.J. Johnson, CEO at HTG, the CDx market is a chief focus for developing a “medical menu” for the company’s EdgeSeq platform. “We believe the new companion tests being developed for drug therapies will be a large catalyst for future instrument placements and increasing annuities (reagent sales),” he explained. “HTG is not a content-discovery company, so our partnerships with biopharma and collaborations with translational researchers provide our primary pipeline of new tests.”

Although HTG has yet to receive FDA approval for a CDx, according to an SEC filing, as of December 31, 2016, the company had 36 active CDx development programs with 16 biopharmaceutical companies. Moreover, HTG received CE marking of its ALKPlus Assay in Europe last March, and expects to obtain FDA approval for the assay by late 2017/early 2018. If approved, the ALKPlus Assay will be used as a CDx for crizotinib therapy for ALK positive NSCLC cases.

QIAGEN and Thermo Fisher have received FDA approval for certain CDx (see table below). In a third quarter 2017 conference call, QIAGEN reported it had over 25 master collaboration agreements with biopharmaceutical companies for developing CDx for targeted cancer therapies.

Thermo Fisher has branched into the CDx market to help increase the availability and access of its NGS offerings. “CDx is a critical part of our strategy to continue enabling broader access to our Ion Torrent NGS platform,” said Asia Chang, senior director of Product Management, Clinical Next-Generation Sequencing & Oncology, Thermo Fisher Scientific. “CDx represents an important segment of IVD solutions that deliver clinical utility and positive clinical outcomes. Our Clinical Next-Generation Sequencing and Oncology business is aimed at democratizing NGS technology, and diagnostics are a main thrust of this effort.”

QIAGEN has a proven track record with CDx dating back almost a decade, compared to other companies that have entered the market relatively recently. “QIAGEN has been in the CDx business since our acquisition of DxS in 2009 [see IBO 9/30/09] and we are the global leader in molecular-based companion diagnostic testing,” said Jonathan Arnold, vice president and head of Partner for Precision Diagnostics at QIAGEN. The company’s Precision Diagnostics segment aligns with QIAGEN’s overall business strategy because, as Mr. Arnold explained, it allows for the development of diagnostic innovation and affords QIAGEN the opportunity to launch the new diagnostic content into its global installed platform base. “There are [four] key differentiators to our CDx market approach,” said Mr. Arnold. “[We are a] trusted partner with pharma across the continuum from drug discovery to commercialization; [we have the] best-in-class menu breadth and depth of technologies and sample types, which allows QIAGEN to act as a true consultant to pharmaceutical companies to ensure the diagnostic meets their needs independent of technology; [we have] strong regulatory/quality experience; and [we have] global commercial channels.”

source: FDA

Adapting with the Market Landscape

The instruments used in CDx are largely made for clinical testing. HTG, Thermo Fisher and QIAGEN’s instruments are made specifically with clinical applications in mind. According to Mr. Arnold, QIAGEN instruments such as the RotorGene-Q, the QIAsymphony and the GeneReader NGS-System were specifically developed to meet commercial testing requirements of clinical research labs, including turnaround time, scalable throughput of samples, cost per sample and ease of use. “As an example, a key requirement for developing CDx tests is having an IVD-compliant instrument,” he explained. “This means the platform must be built under design control ensuring the platform will meet the rigorous review process of regulatory agencies, and that is true for all our systems.” The GeneReader-NGS System is also unique from competitive NGS offerings, he noted, as it was always designed as a solution for clinical research applications.

Similarly, HTG, which describes itself as a clinical company, told IBO that the EdgeSeq did not need to undergo any changes since it was designed specifically for clinical labs; however, any potential future modifications that are made will likely be related to software offerings. “We do provide RUO panels into key markets in order to build our business and develop possible diagnostic menu in a cost effective manner,” said Mr. Johnson. “Each of our companion tests in development as well as other diagnostic menu will not likely require adaptation of the instrument, but possibly will have different protocols and probe designs that are software driven.”

“In the emerging precision medicine market, the line between research and diagnostics is blurring.”

Thermo Fisher’s solutions for CDx have a presence in the oncology research market and were developed to undergo the regulatory process. “The foundational technologies integrated in the Oncomine Dx Target Test leverage the Ion AmpliSeq chemistry, the Ion Torrent PGM Dx system and the Ion Reporter software,” he explained. “The primary effort was not technology-oriented to attain multiple CDx biomarkers—the effort was in partnership with pharma and the FDA to conduct the rigorous testing and studies to take our integrated solution through the FDA process.”

Partnering with pharmaceutical companies also comes with a set of requirements that the companies need to meet. “[Pharmaceutical companies] must trust that the instrument/platforms are going to meet a high standard even before they invest in the development of the CDx assays on the instruments,” Mr. Arnold said. “Based on joint go-to-market activities with our pharmaceutical partners for CDx and drug development, each CDx launch also accelerates the adaption of QIAGEN´s platforms.”

Although Thermo Fisher has traditionally not been known as a diagnostics company, it has been slowly building upon its diagnostic segments in order to provide comprehensive workflows. “Thermo Fisher has traditionally been considered an instrument company; however, within the Thermo Fisher family of businesses, our diagnostic portfolio is not insignificant across our Phadia allergy portfolio and now with our Oncomine brand of solutions in oncology,” said Mr. Chang. “Our businesses have the advantage of supporting the entire pharma drug development process, from basic research through to commercial diagnostics.”

Companies like Thermo Fisher entering the CDx market is understandable, since the distinctions between discovery and clinical are starting to overlap. “In the emerging precision medicine market, the line between research and diagnostics is blurring,” said Mr. Johnson. “Biopharma needs a solution from biomarker discovery to commercialization of a companion diagnostic, and companies that can span that entire solution are advantaged.”

That advantage makes for the development of comprehensive workflows. HTG partnered with QIAGEN in 2016 for a five-year agreement for a complete NGS-based solution for the development, manufacturing and commercialization of oncology-based CDx tests (see IBO 11/30/16). In January, the companies began a third project for a new NGS-based clinical trial assay with an undisclosed pharmaceutical company. The companies’ respective strengths combine to give an advantage that strictly diagnostic companies would not have. “With our QIAGEN partnership, we believe we have a full solution and customers are validating that with our publicly released new agreements,” said Mr. Johnson.

Integration as a Strategy

Collaborations are a key aspect of the CDx market, and companies that develop their own instruments bring an added value to their partners as well. For example, QIAGEN focuses on developing integrated workflows that meet regulatory requirements, and this strategy gives the company an extra benefit that their pharmaceutical partners also gain from. “This is a key advantage over other diagnostic providers who sell standalone instruments or develop tests on competitor´s instruments, which requires a lot of inter-company alignment,” said Mr. Arnold. “QIAGEN has the additional advantage of being a diversified life science and MDx company, which gives us a competitive advantage, because we can leverage innovative life science products for diagnostics markets and integrate them into diagnostic products to truly deliver complete solutions to labs, not individual tests or just instruments.”

“Having a portfolio of solutions to address the care journey and enable labs to deliver meaningful answers is a critical part of our strategy.”

This notion of a cohesive workflow is driving the growth behind companies entering the CDx market, and the three companies are focused on creating inclusive, complete and diverse workflows in order to extend their reach in the diagnostic sector.

Creating an integrated and complete clinical portfolio is a major aspect of the companies’ approach to the diagnostic market. As Mr. Chang explained, CDx is a specific designation by the FDA indicating that the IVD confirms that the corresponding therapeutic product is safe and effective. “Many other types of diagnostic applications such as screening, prognostic, etc. are part of the fabric of the diagnostic landscape,” said Mr. Chang. “Having a portfolio of solutions to address the care journey and enable labs to deliver meaningful answers is a critical part of our strategy.”

Diversifying CDx portfolios is key for QIAGEN. “In several cases, a CDx test is needed for the identification of patients being eligible for a specific treatment,” said Mr. Arnold. “Later the CDx can also be applied for diagnosis of patients, as in the case of CML [chronic myeloid leukemia], and possibly monitoring of treatment success, e.g., BCR-ABL testing for Gleveec in CML. There is another aspect, which could be considered subsegments of the same market, such as immunology testing where QIAGEN needs to be able to develop both RNA- and DNA-based solution for our pharma customers.”

HTG shares this sentiment of developing a robust pipeline that keeps up with new prospects in the CDx market. “A diversified portfolio is very important, but the majority of CDx assays will be signatures that predict response to the therapy,” said Mr. Johnson. “Certainly early detection and disease monitoring assays will all play critical roles in patient care, and we continually assess our pipeline versus emerging opportunities.”