The growth of personalised medicine is likely to increase the number of alliances between diagnostic and pharmaceutical firms.

That is the comclusion of a new report from PricewaterhouseCoopers, which says that the trend has been most recently highlighted the deal GlaxoSmithKline signed last week with fellow UK firm Enigma Diagnostics to develop a test which can diagnose specific strains of influenza, including swine flu, in just an hour.__

__Loic Kubitza, director at PwC, said the group thinks alliances with the pharmaceutical industry will increase “in the next two to five years but this will be driven by factors including the pricing of diagnostics, the extent of reimbursement coverage and the burden of any clinical validation work required for market access”. The report notes that significant further progress is needed with the personalised medicine concept as current patient response rates to medicines can be very low – varying from 20% to 75% depending on the drug.

Mr Kubitza adds that “although the clinical motivation for developing more tests designed to guide the prescribing of a specific drug is clear, the economics are challenging”. He states that pricing does not always reflect the level of development costs associated with the test “or its contribution to overall health benefits and this can adversely affect the business case for developing a new diagnostic”. Addressing “the pricing conundrum is a crucial factor”, he concludes.

The report notes that in 2008, personalised medicine motivated three of the ten largest M&A deals and four of the licensing agreements by the ten largest in vitro diagnostics companies. Factors that will drive growth in the sector include the position taken by regulatory agencies which are supporting personalised medicine by introducing formal requirements to test for certain biomarkers prior to prescribing certain drugs.

The PwC analysis also states that legislation introduced in May 2008 in the US and Europe to protect individuals against discrimination resulting from the use of genetic information “may now encourage more people to undergo genetic testing or participate in innovative research”. It also makes note of Genentech’s Citizen Petition of December 2008, which “created new momentum around the discussion of the diversity of regulatory paths to market for in vitro diagnostics”.

Also of importance has been the adoption of new diagnostic technologies in “the guidelines of important clinical communities, which should accelerate their market adoption”. Agendia’s MammaPrint (a DNA-based test for evaluating an individual’s risk of breast cancer spreading to other sites) was recently validated by the Dutch Institute for Healthcare Improvement.

Simon Friend, global pharmaceuticals and life sciences industry leader at PwC, concludes that increasingly, pharmaceutical companies “will not move a drug candidate to the clinical development stage without a clear biomarker development programme”. In addition, pressure from healthcare payers is putting more emphasis on the availability of a companion biomarker test when deciding on a drug’s reimbursement and these factors will “combine to accelerate the development of new diagnostics for personalised medicine”.