Precision Medicine (PM) is a transformative healthcare approach for disease prevention and treatment; it uses a patient’s genetic information, medical history, environmental factors, and lifestyle to determine the most effective treatment option that has the least amount of side effects.
PM has already gained traction in the pharmaceutical industry and is poised to become an integral part of the healthcare space. Nearly 25% of new molecular entities approved by the US Food and Drug Administration were classified as precision medicine in 2019, up from a mere 5% in 2005. Many drug developers have turned to biomarkers (biological markers or gene variations present in a patient, or disease such as a tumor), which is the foundation PM uses to generate accurate targets. For example, biomarkers were used in more than 61% of clinical trials for cancer treatment in 2019 compared to just 18% in 2000.
The precision medicine industry can be categorized into six broad segments based on the type of solution offered, encompassing: genetic testing companies, pharmacogenomic test developers, bioinformatics companies, in-vitro companion diagnostic devices, and test manufacturers, drug discovery and development companies as well as multiomics platforms. Overall, there is a high concentration of startups in the genetic testing and drug development segments.
Traditional diagnostic companies, meanwhile, have branched out into companion diagnostics, while big pharma companies such as Pfizer, AstraZeneca, GSK, and Roche, have a presence in multiple segments.
Two main types of incumbents are actively involved in the precision medicine space: 1) traditional diagnostic companies such as Abbott Molecular and Thermo Fisher Scientific that have entered the genetic testing space and companion diagnostics (CDx) for precision medicine, and 2) traditional drug developers such as AstraZeneca, Roche, GlaxoSmithKline, and Pfizer that have added precision oncology and other targeted therapies to their portfolio.
In most instances, big pharma companies and traditional diagnostic companies have developed/built out in-house capabilities to branch out into precision medicine. Some big pharma companies such as Roche and Janssen also have in-house diagnostic operations and expanded into companion diagnostics required for precision drugs. Other incumbents have expanded their precision medicine capabilities and service via acquisitions. There are several collaborations and strategic partnerships that have also taken place between different players in the precision medicine ecosystem including partnerships between 1) traditional drug developers and diagnostic companies where the latter develops CDx tests for the former’s targeted treatments, 2) traditional drug developers and startup drug developers to co-develop, combine, license and commercialize precision drugs or targeted treatments, as well 3) traditional large pharma companies and startup companion diagnostic developers that co-develop CDx tests.