4b. CDx Precision Health Economics Presentation
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Transcript of 4b. CDx Precision Health Economics Presentation
![Page 1: 4b. CDx Precision Health Economics Presentation](https://reader030.fdocuments.net/reader030/viewer/2022032505/55c58140bb61ebd95d8b486c/html5/thumbnails/1.jpg)
The Financial Impact of Biomarker-enabled
Companion Diagnostics in the Stratified-Medicine Ecosystem Highlights provided here were presented on Dec. 4, 2012 as an invited talk at the
World Congress of Molecular Medicine
& Diagnostics - Guangzhou, China
For more information, please see www.CDxPrecisionHealth.com
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Driven by disruptive advances in -omics, the convergence of molecular testing and targeted treatment holds much potential for addressing significant unmet healthcare needs. Despite 10+ years of promise, biomarker-based CDx-stratified medicine is rapidly approaching an inflection point. Large pharmaceutical companies that have mostly resisted the emergence of personalized medicine are now actively positioning not to be left behind as economic and regulatory pressures that will accelerate stratified therapies are imminent.
Commercialization of Companion Diagnostics (CDx)-Stratified Medicines
Prepared by Alan K. Hauser
I N T R O D U C T I O N
For more information, please see www.CDxPrecisionHealth.com
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A Significant Unmet Medical Need
$1 Trillion wasted annually stemming from these critical challenges:1) Lack of therapeutic efficacy - 90% of current drugs only work in 30 to 50% of individuals
2) Adverse toxic reactions from prescribed ethical drugs kill one American every 5 minutes.
23
Need for Personalized Medicine; $1 Trillion Wasted Annually
“If it were not for the great variability among individuals, medicine might well have been a science and not an art.”
Sir William Osler (1949-1919)
Tomorrow, diagnostic testing will be used to tailor therapies & better manage patient’s disease.
(1849 -1919)
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Companion Diagnostics (CDx)-Stratified Medicines
• Matching therapies to patient sub-populations
• employing clinically-validated biomarkers:
E4
A Solution:
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Page 10
November 6, 2009
Large Revenues Are Possible
(thousands of patients, average yearly price in $thousands)
Migration from blockbuster drugs to higher-value targeted treatments*
Benefits of Companion Diagnostics (CDx)
• “The right drug at the right dose at the right time”
• Potential revival of drugs that failed in earlier clinical trials
• Reduction in cost of healthcare
• Selection of optimal therapy, thereby reducing or eliminating trial-and-error prescribing
• Reduction of adverse drug reactions
• Increase patient compliance with therapy
CDx-stratified medicines can be “niche busters”
Trusheim, et. al Nature Reviews Drug Discovery, April 2007
E5
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Stratified Cancer Therapeutics Timeline FDA Approval Patent Expiration
Letrozole, Novartis, aromatase inhib, HR+ breast
Imatinib, Novartis, TK inhib, myelogenous leukemia, GIST
Anastrozole, Novartis, aromatase inib, HR+ breast
Bortezamib, Mlnm, proteasome inhib, myeloma, MC lymphoma
Bevacizumab, Genentech, metastatic colon, NSCL, breast
Trastuzumab, Genentech, Her2/Neu breast cancer
Rituximab, Genentech, B-cell non-hodgkins lymphomas
1995 2000 2005 2010 2015 2020
Rituxan
Herceptin
Femara
Gleevec
Arimidex
Tarceva
Erbitux
Rx-CDx P
roducts
on the M
arket
Rx-CDx Niche busters
43% Genentech43% Novartis
$5 B
$4 B
Copyright © 2013 Alan K. Hauser & CDx Precision Health
Avastin
Velcade
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Molecular & Companion Diagnostics Markets
$ in
Bill
ions
0
4
8
12
16
2008 2011 2013 2016 2018
41
Molecular Diagnostics are Changing Medicine
($Billion) 2008 2011 2013 CAGRWW MDx Market1 $3.8 $6.0 $7.5 15%WW CDx Market2 $0.9 $1.6 $2.3 21%
1 Scientia Advisors, 2010.2 West LB Research; Caliper.
Diagnostics are currently involved in over 60% of clinical decision-making but account for only 2% of overall healthcare spend.*
The CDx Market Opportunity
Today stratified healthcare is rapidly growing at double-digit pace, yet is only $20 B (or 3%) of ~$650 B BioPharmaceutical Market.^
Copyright © 2013 Alan K. Hauser & CDx Precision Health - All Rights Reserved.
mDx
CDx
Companion
CDx21% CAGR
Total mDx 15% CAGR
Companion diagnostic testing promises to capture a greater share of the value created by CDx-enabled stratified medicines.
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25%
$575
50% Chance
0 $71567%
$875
9%
($124)
25% Chance
0 $44425% 0.0625
($59) ($59)67%
$669
25% Chance
0 $40534%
($119)
TRUE Chance
0 $27623% 0.225
($29) ($29)67%
$1,125
50% Chance
0 $70934%
($116)
53% Chance
0 $32750% 0.2625
($55) ($55)Decision
$276 22.50%22.50% 0($24.0) ($24.0)
FALSE Chance
0
66.5%
$1,199
50.0% Chance
0 $76033.5%
($111.1)
77.5% Chance
0 $355 38.75%50% 0
($50.5) ($50.5)
Design Stratification?
No
Phase 1 fail
Phase 1 pass
Phase 2 fail
Phase 2 pass
Phase 3 pass
Phase 3 fail
Yes
Phase 1 fail
Phase 1 pass w/o Biomarker
Phase 2 fail
Phase 2 pass
Phase 3 pass
Phase 3 fail
Phase 1 pass w/ Valid Biomarker
Phase 2 fail
Stratum pass
Stratum pass
Phase 3 fail
Phase 2 pass
Stratum pass
Phase 3 pass
Phase 3 fail
CDx is modeled as a Real Option yielding $276 M
probability-adjusted eNPV uptake for efficacy stratification* & is
comparable to DCF, discrete & Monte Carlo results in the literature^
Palisade’s PrecisionTree
software^ was used to
generate decision trees*
Empiricalall-comers scenario*
Efficacy stratification scenario*
Decision Tree Analysis of CDx-stratified Oncological Medicine*
Copyright © 2013 Alan K. Hauser - All Rights Reserved.
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© 2013 CDx Precision Health
Impact of CDx: Bridge to Targeted Therapeutics
Conclusions
✤ Biomolecular marker-based companion diagnostics-stratified healthcare is scientifically fascinating, clinically life saving and commercially disruptive (Figs. 2 - 7).
✤ Due to existing pharma-CDx co-development partnerships that are fueling the 21% CAGR increase, the total CDx market opportunity is now $1.9 billion (Fig. 6).
✤ The expected Net Present Value of a single biomarker-enabled drug/diagnostic combination can exceed $250 million according to the literature and my calculations employing Real Options and decision-tree analyses (Figure 7).
✤ Despite uncertainties associated with the ethical ramifications of CDx-stratified medicines as well as regulatory and reimbursement issues, this momentum-building CDx-driven targeted-therapeutic growth opportunity will be paradigm changing for pharma because “one drug really does not fit all” (Figs. 2 - 4)
Drawing from this preliminary CDx-stratified medicine study, we surmise the following:
For more information, please see www.CDxPrecisionHealth.com