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Feature Articles : Mar 1, 2008 ( )
Diagnostics Advancing Healthcare Reform
Molecular-Based Technologies for Diagnosis and Prognosis Could Reduce Costs!--h2>
With the presidential elections around the corner, healthcare reform was a hot topic at the “JP Morgan 26th Annual Healthcare Conference,” held in January. For biotech executives, it was music to their ears to hear presidential candidates speak about their intentions to have the federal government invest in novel technologies that could change the sharp, upward trajectory in healthcare costs.
Innovation has always been the biotechnology industry’s bailiwick. This is seen in its ability to develop novel approaches and cutting-edge technologies for preventing, diagnosing, and treating diseases. For life science investors, it’s a matter of deciding which companies they should be considering as their next investment opportunities.
The positive buzz among venture capitalists and portfolio managers at the JP Morgan meeting was related to the advances being made in diagnostics and personalized medicine. It is perceived that the goods and services provided by such companies may prove to be the best approaches to reduce the high costs embedded in our healthcare system.
As a result of the sequencing of the human genome in 2000, the diagnostic product landscape has changed dramatically. In the 1980s, biotech-related diagnostic devices mainly consisted of reagents such as mAbs that were used in serological tests. Hybridtech became the the first biotech company to commercialize mAbs in such a setting. The company’s subsequent success led to its acquisition by Eli Lilly.
In the 1990s, the advent of molecular probes allowed biotech companies to provide more sensitive and accurate tests. Gen-Probe is one company that quickly embraced the use of nucleic acid probes to develop highly sensitive assays to detect infectious microorganisms such as HIV-1, HCV, and West Nile virus. As a result of being an early adopter of this new technology, Gen-Probe has developed a successful business as a provider of molecular-based probes and kits for diagnosing diseases, screening tissues, and industrial testing for infectious agents.
Today, we are in the midst of another technology revolution in the diagnostic sector. With the discovery of disease-associated genes and biomarkers, physicians can now determine either an individual’s predisposition to or their current status in a particular disease. For example, Myriad Genetics markets a controversial genetic test kit that screens for the presence of oncogenes such as BRCA1 to determine a woman’s predisposition to breast cancer.
roteins and oligonucleotides represent a new wave of biomarkers currently being developed as diagnostic agents. They serve as indicators of gene expression either during a disease process or when drugs are administered to a patient.
Transcription factors and epigenetic modifiers have recently been associated with numerous pathological conditions as markers for drug toxicity and resistance. These types of tests will bring into sharper focus the health status of a patient while guiding physicians in their use of targeted, genetic-based therapies.
Personalized Medicine and Theranostics
The concept of personalized medicine emerged in the 1990s when companies such as Incyte Pharmaceuticals and Human Genome Sciences were developing databases that contained sequences of the human genome. Life science investors became enamored with the idea of treating patients based on their genetic background.
Currently, a drug’s effectiveness is measured through the use of statistics and a normal distribution of patients for a particular clinical indication. When one considers the therapeutic index for such a bell-shaped curve, however, only 50% of patients actually receive the most benefit with the least side effects for a particular therapy at a specific dose.
It would be more costly and less profitable for pharma to change its business model to a personalized medicine strategy in which drugs are developed for a subpopulation of patients based on their genotype. Biotech companies, on the other hand, are beginning to seize the opportunity and are developing genomic-based products to determine a patient’s risk and predict disease outcomes.
A melding of tests to diagnose a disease with molecular markers that measure gene expression resulting from an individual’s response to a particular therapeutic regimen has given rise to the nascent field of theranostics. A couple of biotech companies are already beginning to market theranostic products.
At the JP Morgan conference, Genomic Health’s chief executive, Randy Scott, Ph.D., gave a positive revenue outlook for his company’s first product, Oncotype DX, for breast cancer patients. This test is designed to measure drug responsiveness in patients who are lymph-node negative and estrogen-receptor positive. Through a risk-assessment analysis, Oncotype DX predicts which patients would most benefit from a specific chemotherapy regimen as well as the likelihood of a relapse and 10-year survival rates.
Privately held AutoGenomics is another emerging firm focused on developing molecular-based theranostics. The company markets its automated computer hardware and disposable kits to clinical labs. It has developed a fully integrated, automated platform that can detect unique oligonucleotides related to genetic mutations and gene expression levels of a patient. By multiplexing its BioFilmChip microarrays analysis with its automated Infinity analyzer, the company has developed 20 molecular-based tests.
Similar to the discovery of mAbs where it took almost two decades for them to evolve from diagnostic reagents to therapeutic agents, we are now realizing the potential of genomics. If politicians have the will to reform insurance companies’ reimbursement policies, the future looks bright for companies developing products for theranostics and personalized medicine. After all, their goods and services are aligned with the current political environment to reduce the rising cost of healthcare and reform our healthcare system.
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