Jim Zhang, Ph.D

	Over recent years global drug companies large or small have recognized that one root cause of the high failure rate in their clinical development lies in the selection of right therapeutic targets. More compounds fail in clinical trials because of the lack of necessary efficacy than any other reasons.

	In order to reduce failure rate, improve productivity, and increase investment return in their R&D performance, drug companies increasingly focus on targeted therapy. Their efforts are leading to the gradual realization of personalized medicine. What drive the development and realization of personalized medicine is, however, the technologies developed in molecular biomarker and companion diagnostics (CDx). Today many R&D-focused drug companies large or small incorporate biomarkers and CDx into their programs.

	However, at present most drug companies, even including those major ones, still have not gained a full scope of sufficiently strong capability and capacity in these areas. They thus need supports from external organizations. The service demands for genomics/proteomics research, biomarker discovery, and CDx development by all sized drug companies have thus been growing rapidly in the recent years. It has been leading to the emerging of a new sector of the global pharmaceutical outsourcing industry. 

	We recently conducted a comprehensive market study on global biomarker discovery and CDx development outsourcing and found that 

n today's drug R&D, biomarkers have been increasingly employed in a growing number of therapeutic studies at almost all stages, from target identification and validation through to drug discovery, preclinical studies, and further to all phases of clinical trials. The development of biomarkers has thus become one of the key focuses of all sized drug companies. To a large extent, biomarker has now become the drug fate determinator.

	Today biomarker, coupled with diagnostics, gradually becomes a powerful tool for effective clinical development. They not only increase the value of a program, but also greatly help guide the program proceeding forward in a right direction as they allow drug companies to make better decisions based on the measure of biomarkers. Discovery of new biomarkers, incorporation of biomarkers into clinical trials, and thorough validation of therapeutic targets with biomarkers have thus become the new focuses of drug development.

	On the other hand, the biomarker-based CDx can improve patient experience with treatment as they can help optimize patient selection and treatment monitoring, thus providing cost-effective benefits. They can also help drug companies make informed decisions about whether a treatment will benefit a specific patient group. CDx have thus been increasingly adopted in drug R&D programs by growing numbers of drug companies and become an integral part of their programs. Co-development of therapeutics with diagnostics has gradually become a trend.

	Consequently, a new R&D strategy is currently being implemented by almost all drug companies: In early stages they focus on validating therapeutic targets using biomarkers and conducting extensive 

 studies on toxicity to ensure that the selected candidates would not display severe side effects later on. In late stages they employ CDx to guide the development of their programs, thereby reducing time and scale of the trials. It is believed to be an ideal pathway for development of personalized medicine. Nowadays the biomarker-based patient stratification has already become a norm in oncology drug development. Following the successful development in cancer treatment, other therapeutic areas are also increasingly employing this approach.

	All these trends have showed a clear sign that the pharmaceutical R&D paradigm has been completely changed, primarily due to the emergence and incorporation of biomarkers and CDx. Today the development of therapeutics is increasingly biomarker-guided.

	However, discovery of biomarkers and development of CDx primarily rely on genomics and proteomics as well as their related technologies including metabolomics, bioinformatics, and molecular imaging, etc. Genomics and proteomics research has directly resulted in the discovery, validation, and fast applications of a large but still growing number of biomarkers. The fast development of the CDx industry is also driven by the omics-related technologies, which is fostered by the abundant information generated by genome sequencing.

	As more and more genomic data from the genome sequencing are being utilized and incorporated into real-world clinical development, including diagnosis, prognosis, and therapeutic decision-making process, the high-throughput, low cost genome sequencing, in particular the next-generation sequencing, is increasingly being incorporated by drug companies into their modern drug discovery and development programs. For example, to improve the success rate of late stage clinical trials for cancer drugs, using genomics/proteomics research to correlate the molecular profiles of cancer patients with the treatment outcomes of a trial drug has become a new trend.

	The rapid advances in genomics and proteomics in the recent years have not only dramatically improved our understanding about diseases, but also transformed the way the entire pharmaceutical industry conducts drug R&D. Drug development is thus entering a new era.

	However, to most drug companies, even including those major pharma, research in genome sequencing as well as genomics and proteomics used to be their weak area. Also, to many of them, whether and when to embrace CDx is still a tough decision. It is significant challenging for any drug company to independently carry out all tasks in these areas on their own.

	To accomplish their tasks, they thus largely rely on the external resources, primarily through collaboration and/or partnership. The service demands for genomics/proteomics research, biomarker discovery/validation, and CDx development by all sized drug companies have thus been growing rapidly in the recent years. In addition to industrial companies, their partners now also include academic researchers. Many drug companies have also established separate departments to specifically focus on the management of R&D on biomarker and CDx as discovery of biomarker and development of CDx requires totally different expertise and technologies than drug R&D.

	Currently, among those major pharma and biopharma companies, only Roche and Abbott have a full scope of in-house capability and capacity in CDx development. Novartis did not have the capability initially but built it up later through acquisitions. All other major companies more or less have to partner with diagnostic product development specialists, in particular those major ones that have appropriate technology platforms for given biomarkers, or better, have a global footprint for commercial medical systems.

	At present the outsourcing of biomarker discovery and CDx development is just beginning; but they are expected to become strong in the future. Moreover, this type of service is currently also occurring in the emerging countries. Although most companies in these countries that focus on genomics/proteomics research currently still have limited capabilities, multinational companies are already seeking collaboration opportunities with those local top biotech companies or research institutions.

	Today as drug companies are placing more effort to completely understand the biology and genetic pathway of a disease, genomics and proteomics research has been increasingly integrated into their discovery and development programs. These technologies thus play increasingly important roles in the modern pharmaceutical and healthcare industries. Together with their downstream products (i.e. molecular biomarkers and diagnostics), genomics and proteomics have thus become the frontier research focuses of the entire pharmaceutical industry in the modern era. Today, effectively utilizing the technologies in these areas to more efficiently discover effective drugs has become the No. one priority to every drug company, both major pharma and biotech startup.

	According to our research, the current global biomarker discovery outsourcing service market is about $2.7 B, and the current global CDx outsourcing market is about $3.5 B. Although these outsourcing markets are currently still at their nascent stage, they are believed to have high future growth potentials. 

	As genome sequencing becomes faster, more accurate, and less expensive, more biomarkers are expected to be discovered and validated in more therapeutic areas in the foreseeable future. This, coupled with the rapid advances in bioinformatics, is also driving the rapid growth of the global CDx market. We thus believe that the most dynamic growth areas in drug R&D in the future would be in the genomics and proteomics research and the subsequent biomarker discovery/validation and CDx development. Moreover, a larger part of these types of work is expected to be performed by third parties. 

	We thus forecast that that the global biomarker outsourcing market may experience a compound annual growth rate (CAGR) of 23% between 2014 and 2018 and likely reach $7.6 B by 2018.

 The global CDx outsourcing market will likely experience a CAGR of 15% during the same time period and may reach around $7 B by 2018 (Figure 1).

	Until now drug discovery and development has been largely empirical with high failure rates. However, in the future it is expected that this practice will be better guided by biomarkers and CDx based on genomic and proteomic data. The failure rate is thus expected to be significantly reduced. It is expected that in the future genomic guidance will be embedded in all drug development programs and treatments, and that applications of other “omics” technologies into drug development, including the profiling of epigenomic changes of patients in the context of drug response, will also likely follow.

Current and forecasted global biomarker and CDx outsourcing markets

	Source: Market research report: “Global Biomarker and Companion Diagnostics Outsourcing Market”, May 2014, JZMed, Inc.

	Jim J. Zhang, Ph.D. currently is president and managing director of JZMed, Inc., a market research firm specializing in pharmaceutical outsourcing. This article is written partially based on the firm's latest market research report, 

“Global Biomarker and Companion Diagnostics Outsourcing Market”

Articles

Over recent years global drug companies large or small have recognized that one root cause of the high failure rate in their clinical development lies in the selection of right therapeutic targets.