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Opportunities and challenges associated with
novel companion diagnostic technologies
L.E.K. Consulting LLC, 1100 Glendon Avenue, 21st Floor, Los Angeles, CA 90024, USA
T: 310.209.9800 F: 310.209.9125 www.lek.com
December 12, 2013
© 2013 L.E.K. Consulting LLC. All rights reserved.
CONFIDENTIAL
1
L.E.K. Consulting is a leading global strategy consulting firm
Overview Global Network
Established in 1983
Clients include 25% of the largest 200
companies globally, as well as innovative
start-ups and leading private equity firms
Areas of expertise include:
Strategy
Transaction Services
Finance
Marketing and Sales
Operations
Organization
Worldwide more than 900 professionals,
led by 100 Vice Presidents in 20 offices
In North America more than 350
professionals, led by 40 Vice Presidents,
all heavily involved in delivering client
assignments
Tokyo
San
Francisco
London
Munich Milan
Mumbai
Beijing
Shanghai
Singapore
Melbourne
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Bangkok
Chicago Paris
Boston
New York
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Angeles
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L.E.K. introduction
© 2013 L.E.K. Consulting LLC. All rights reserved.
CONFIDENTIAL
2
Emerging CDx technologies
The big four established players (Roche, Qiagen, Dako and Abbott) have
historically been pharma’s CDx partners of choice
Source: FDA, company websites, L.E.K. analysis
15 10 5 0 45 90
20
85 80 40 35 30 25 20 75 70
40
30
60
80
90
70
50
100
10
0
100 95 65 60 55 50
qPCR
IVD company CDx partnerships (2005 – present) Percent of total (# of total deals = 86)
30
FISH / ISH Other /
Undisclosed
31 7
IHC
18
Dako
Abbott
Other - emerging
Other - established
Roche
Qiagen
BioMerieux
Cepheid
Hologic
Life Tech
Leica
Alere
Beckman Coulter
BioMerieux
GE
Life Technologies
Ortho-Clinical
Siemens
Asuragen
MDxHealth
Nanosphere
Sequenom
BG Medicine
Luminex
Meso Scale Discovery
Saladax
Sysmex (Inostics)
Veridex Incell
© 2013 L.E.K. Consulting LLC. All rights reserved.
CONFIDENTIAL
3
Biomarker trends are driving the need for novel technologies in CDx
CDx technology needs Example biomarker trends
Source: L.E.K. analysis
Sample access and analysis:
- Sample access / availability limitations
- Single cell analysis
- Sub-population analysis
Exploration of nuanced biology:
- Systems biology
- Small fold changes
- Absolute quantitation
- Single molecule detection
- Biomarker modifications
(phosphorylation, methylation)
Broadening applications:
- Patient acquisition (rare patient ID,
diagnosis, Rx selection)
- Monitoring
- Beyond oncology (e.g., ID, neuro, AI)
Peripheral detection
(e.g., for CTCs or ctDNA)
Multiplexing
(e.g., NGS, NanoString, protein arrays,
CyTOF)
Multi-omic
(e.g., RNA FISH, RNA flow, MultiOmyx)
New detection modalities
(e.g., methylation-specific PCR)
POC / near patient
Emerging CDx technologies
© 2013 L.E.K. Consulting LLC. All rights reserved.
CONFIDENTIAL
4
Emerging Platforms / Examples Peripheral
detection Multiplexing Multi-omic
Novel
detection
NGS Illumina
Life
Qiagen
Digital PCR Inostics / Sysmex
RainDance
Life
Bio-Rad
Arrays NanoString
Boreal Genomics
Epigenomics MDxHealth
Epigenomics
Digital
immunoassay
Singulex
Quanterix
Proteomic arrays Aushon
Luminex
MSD
Theranostics
CTC Veridex
BioCept
Emerging
cytometry
DVS
RNA FISH / Flow ACD
Affymetrix
Multi-omic
histology
GE / MultiOmyx
Source: L.E.K. interviews and analysis
Most novel technologies reside within emerging companies or companies
with emerging diagnostics capabilities (acquisitions are expected)
Example Emerging CDx Technologies
Emerging CDx technologies
© 2013 L.E.K. Consulting LLC. All rights reserved.
CONFIDENTIAL
5
Most emerging companies lack a range of important CDx capabilities; even
emerging technologies within established companies may lack infrastructure
and logistics support
Source: L.E.K. analysis
CDx partner selection criteria Emerging technology
Emerging company
Emerging technology
Established company
CDx
development
capabilities
Technical capabilities and expertise Core competency
Novel test development experience
Therapeutic area expertise
Regulatory experience CE / 510(k); rarely PMA
Operational
and
commercial
infrastructure
Testing infrastructure / installed base Initially limited
Manufacturing infrastructure
Pricing and reimbursement
Sales and marketing
Logistics support Outside of competency
Company
background
Global footprint
Financial health
BioPharma partnering experience
Novel CDx technology partner strength
High Moderate Low Relative strength
Emerging CDx technologies
© 2013 L.E.K. Consulting LLC. All rights reserved.
CONFIDENTIAL
CDx access is a significant issue even with established technologies;
access solutions will be critical when working with emerging technologies
Advanced NSCLC patients
Drug and test awareness
Sample accession
Lab access
Test ordering
Testing and reporting
Drug utilization
Reimbursement
Negligible
Percent not tested
15-20%
5-10%
0-5%
5-10%
Negligible
0-5%
Total 25-50%
Directional
Source: L.E.K. analysis
Key risks for emerging CDx technologies:
Sample access:
- Test requires significant sample
- Test requires non-standard sample
(e.g., fresh tissue in the U.S.)
Lab access:
- Limited installed base
- Central lab model
- Lack of sample logistics support
Lack of established reimbursement
Emerging CDx technologies
6 © 2013 L.E.K. Consulting LLC. All rights reserved.
CONFIDENTIAL
7
A range of mitigating strategies may be considered (typically customized for
each situation):
Emerging CDx technologies
Platform risk Work with novel reagent companies compatible with cleared platforms
- RNA FISH / Flow (e.g., ACD, Affymetrix)
- qPCR (e.g., MDxHealth, Epigenomics, Asuragen)
- dPCR (Sysmex / Inostics; leverages qPCR and flow)
Pre-analytical / channel partners for sample access and logistics (e.g., BD, GE Healthcare)
Coalition / consortium efforts with other pharma and stakeholders (e.g., Foundation Medicine
Master Protocol)
Clinical labs Work with labs across the R&D and commercial value chain (build, partner, finance, acquire):
- Technology access (e.g., Myriad, Foundation Medicine)
- Site-specific PMAs for accelerated timelines, reduced regulatory risk and lower costs
- Commercial support including logistics, S&M, reimbursement (multiple across regions)
Partner network
Appreciation of partner value drivers, needs and capabilities
Coordination across multiple partners
Partnering
excellence
© 2013 L.E.K. Consulting LLC. All rights reserved.