BLANK.POT 1

Stratified Medicines and Companion Diagnostics

An Industry Viewpoint

2nd May 2013 Eddie BlairManaging DirectorIntegrated Medicineswww.integratedmedicines.co.ukeddie.blair@integratedmedicines.co.uk

About IML

1. Align test and drugProduct profiles

2. Establish value of Combined Product profiles

3. Identify test technology and broker relationship

4. Manage integrated programmes to deliver CDx and SRx

• Formed in February 2003, ex-GSK Predictive Medicine Group• Work within industry, government, other stakeholders

Value Proposition Calculator• Added value of companion programme• Business relationship• Portfolio Management

IP Generation & Exploitation• GSK & Smarthaler• SE & tuneable magnetic proteins• TSB SBRI on sepsis care

BLANK.POT 2

3

PATIENT-TARGETEDTHERAPIES

INNOVATIVEMEDICINES

THERAPEUTIC NEED

Right Medicine

Right Patient

Right Disease

Right Time

Right Dose

Right Response

Stratified Medicines

Right Price

Government/ Regulators/ Payors

Healthcare Providers(clinicians, primary

practitioners, hospital workers)

Industry (Pharma co’s & associated value-chain, eg, Dx Co,

CRO)

Patients (consumer and

beneficiary of healthcare)

Stakeholders

BLANK.POT 3

5

Safety and efficacy

Keys issues withmedicines today

are …..

6

Number of patients treated

All Selected Targeted

Co

st o

f m

edic

ines

Low

Moderate

High

BL

OC

K-B

US

TE

RO

ne d

rug

fits

all;

poor

res

pons

e ra

tes

(20-

80%

) &

ris

k of

S

AE

s (>

1%)

SE

GM

EN

T-B

US

TE

RD

rug

resp

onse

s m

onito

red

for

effic

acy

and

SA

Es

usin

g di

agno

stic

-typ

e te

st

(CD

x)

NIC

HE

-BU

ST

ER

Dru

g gi

ven

to

spec

ific

patie

nts

dete

rmin

ed b

y pr

edic

tive

test

s (M

ol D

x; P

Gx)

Hi volume, low price

Low volume, hi price

Billion dollar sales line

New market models for pharma*

*Blair (2009)

BLANK.POT 4

7

CDx offers increased revenue through better commercialization*

*Trusheim et al NRDD 6: 287 (2007) *Agarwal PharmExec.com (Jan, 2009)

8 8

Opportunity Map for CDx*

*Davis et al (2009) Nature Rev Drug Disc 8: 279

DiabetesAsthma

CNS Drugs

BLANK.POT 5

MIT Stratified Medicine Model*Linking Development & Biomarker Performance to Patients & Markets

Biomarker

Performance

Efficacy &

Population

Enrichment

Adoption

Rate &

Market Share

Pricing:

Drug &

Diagnostic

Patient

Benefits

& AEs

Cash Flow

& NPV

Market

Size

Sales

*Trusheim et al Nature 2011

10

Diagnostics Partner Influence ( Pharmaceutical Partner Urgency)

Lo Hi

Rel

atio

nsh

ip s

tru

ctu

re

Sim

ple

Fee

-fo

r-se

rvic

eR

isk-

shar

ing

or

hybr

id

TurnaroundOutcome: Product

Rescue1.8bn (90%R, 10% D)

Use-to-orderOutcome: Market

expansion$1.3bn (99%R, 1% D)

Make-to-orderOutcome: Market

penetration$1.9bn (98%R, 2%D)

IntegratedOutcome: Co-developed

test & medicine$1.8bn (97%R, 3%D)

PharmaCo-DxCo Relationships*

*Blair (2008), Blair (2010); Blair & Blakemore (2011)

4. AZ/ Prom budesonide

and

Prometheus Serology 7 test

1. Pfizer maraviroc

and

Monogram trofile test

2. Amgen panitumumab

and

KRAS test

3. GSK abacavir

and

HLA SNP test

BLANK.POT 6

11

NPV* Matrix v2NPV ACosts to Dx Co = $FULL

Rx revenues to Dx Co = $5%

Dx Co Rx risk = Exposed

NPV BCosts to Dx Co = $FULL

Rx revenues to Dx Co = $5%

Dx Co Rx risk = Exposed

NPV C**Costs to Dx Co = $FULL

Rx revenues to Dx Co = $5%

Dx Co Rx risk = Exposed

NPV DCosts to Dx Co = $PART

Rx revenues to Dx Co = $X+2%

Dx Co Rx risk = Exposed

NPV E**Costs to Dx Co = $PART

Rx revenues to Dx Co = $X+2%

Dx Co Rx risk = Part Exposed

NPV FCosts to Dx Co = $PART

Rx revenues to Dx Co = $X+2%

Dx Co Rx risk = Part Exposed

NPV G**Costs to Dx Co = $0

Rx revenues to Dx Co = $0

Dx Co Rx risk = Part Exposed

NPV HCosts to Dx Co = $0

Rx revenues to Dx Co = $0

Dx Co Rx risk = Not Exposed

NPV ICosts to Dx Co = $0

Rx revenues to Dx Co = $0

Dx Co Rx risk = Not Exposed

Rev

enue

Sce

nario

s

Fee-for-Service(No royalty)

Hybrid Risk & Fee(2% drug royalty)

Full Risk-Sharing(5% drug royalty)

RelationshipScenarios

New Test Co-Developed with New Drug

Existing Test Made/ Used to Order for New-to-Market Drug

Existing Test Rescues Drug Sales (Repositioning?)

*NPV discount factor varied (10%, 12.5%, 15%) as surrogate for relative risk**Red text is most-likely revenue-relationship scenario intersection

The Price vs Value Imbalance*

12

* Blair, E.D., Stratton, E.K. and Kaufmann, M. 2012b.** Projected Annual Sales 2012 based on HY12 – roche.com

Targeted Therapy Annual

Price

Companion Diagnostic Test

Price

Model Value

Xalkori (critozinib, 

Pfizer)

$115,200 Vysis ALK Break Apart In 

Situ Hybridisation FISH 

Probe Kit (Abbott 

Molecular)

$1,500 Turnaround (ALK 

positivity ~7%)

TBD

Zelboraf 

(vemurafenib, 

Plexxikon/ Diiachi‐

Sankyo/ Roche)

$56,400 Cobas 4800 BRAF V600 

Mutation Test (Roche 

Molecular)

$120 ‐

$150

Integrated

(BRAF V600E

mutation ~40%)

$144M

($213M**)

Herceptin

(trastuzumab, 

Genentech/ 

Roche)

$70,000 HercepTest (Dako) $500 Turnaround

(HER‐2 

expression score 

3+ ~ 10%)

$620M**

BLANK.POT 7

Mitigating Delays – Platform Bridging*Patient selection

“hurdle “

CDx bridging study

Platform B based on phase III samples upon agreement with Regulators

IND submission/ approval

Delayed, but with Plat B CDx for patient selection

Phase III trial

Platform A

low

A

B

CDx development*

Based on phase II samples upon agreement with Regulators

IND submission/ co-approval

Delayed, but with cDx for patient selection

lowPhase III trial

CDx clin. trial assay

CDx development

Platform B based on phase II samples

C Phase III trial

Platform A

IND submission/ approval

As planned with Platform A for patient selection

CDx bridging study

Platform B based on phase III samples upon agreement with Regulators

IND submission/ approval

Label change: Plat B CDx for patient selection

high

low

CDx development

Based on phase II samples upon agreement with Regulators

*Martina Kaufmann, IML

Modified from Brandenberger & Nalebuff, 1996

Government/ Regulators/ Payors

Healthcare Providers(clinicians, primary

practitioners, hospital workers)

Industry (Pharma co’s & associated value-chain, eg, Dx Co,

CRO)

Patients (consumer and

beneficiary of healthcare)

Stakeholders

BLANK.POT 8

15British Medical Journal 1999;319 (18 September):762.

Relationships

16

Relative DiseaseSeverity

Relative TreatmentEfficacy

Reactive medicinePredictive medicine

Key Driver: Changes to medical practicePredictive MedicineEarlier diagnosis + effective treatment = better long term outcome

BLANK.POT 9

17

Observations If patient is not obviously ill, how will benefit be measured and compensated?

How will clinical studies demonstrate preventative benefit in timescale of drug development?

Will prevention of one disease merely postpone eventual burden on healthcare system?

How will insurers and other parties view risk based on prediction and prevention?

Bibliography

18

Little S, Blair ED: Pharmacodiagnostics: technologies, competition, and market models. Insight Pharma Reports 51. 2005. www.insightpharmareports.com

Blair, E.D. Assessing the value-adding impact of diagnostic-type tests on drug development and marketing. Mol. Diagn. Ther. 2008, 12, 331–337.

Blair, E.D. Predictive tests and personalised medicine. Drug Discov. World (Autumn) 2009, 22, 27–31.

Blair, E.D. Molecular diagnostics and personalized medicine: Value-assessed opportunities for multiple stakeholders. Pers. Med. 2010, 7, 143–161.

Blair, E.D. Blakemore, J.A. Drug-diagnostic co-development: How to harness the value. Drug Discov. Today 2011, 16, 902–905.

Blair, E.D., Stratton, E.K. and Kaufmann, M. The Economic Value of Companion Diagnostics and Stratified Medicines. Expert Rev Mol Diagn2012, 12 (8): 782-785.

Blair, E.D., Stratton, E.K. and Kaufmann, M. Aligning the Economic Value of Companion Diagnostics and Stratified Medicines. J. Pers. Med. 2012, 2, 257-266.

Blair ED, Clarke BR & O’Neill T (2011)

Sustaining development of stratified medicines in the UK healthcare system: a commentary

Personalized Medicine 8: 517–521

Thomas J, Stratton E & Keppens M (2012)

Companion diagnostics: emerging strategies and issues in pharmaceutical development

Expert Rev. Mol. Diagn. 12: 561–563