Market Factors and Estimates
The number of companies actively engaged in development, manufacture, and marketing of companion diagnostics is large—somewhere on the order of 150 companies or more. As a result, the number of companies involved in this area may continue to increase over the next few years. Their number may then dwindle as some cannot find alliances that allow them early access to proprietary genetic data from pharmaceutical firms; some will merge; and some will be acquired (or at least their technology will be bought out), by therapeutics firms wishing to maintain proprietary testing technologies.
Kalorama Information’s forecast for companion diagnostics presents what we believe to be the potential market for companion diagnostics in the U.S., and the actualized markets, including today’s ad hoc associated testing transitioning to the true companion diagnostic paradigm by 2015 or 2016.
The market for companion diagnostics is estimated to be at $27 million but will likely grow to $130 million by 2018 (Figure). This is a conservative forecast. It is based on the estimates of pharmaceutical industry executives who project seven-year horizons for each companion diagnostic product.
Therefore, since the industry is just now planning the complete companion diagnostic paradigm and entering the cooperative development process, it is likely that it will not be before 2015 or 2016 that any major surge in these markets will be seen. Some readers may have seen larger projections, but we believe these are unwarranted at this time. These figures are probably not what the diagnostics industry is hoping for.
To increase companion diagnostics revenues to the diagnostics companies, it is suggested that the diagnostics companies use a strategy of royalties associated with the sales of the therapeutics that their tests target. Because of the subordinate role that diagnostics has in the companion diagnostic relationship, such a strategy will show greater promise than some of the companion diagnostic marketing strategies commonly advanced. While the promises of theranostics for modern medicine are great, developing models that work in the reality of today’s healthcare marketplace will serve companies better than a completely futuristic view.