By Turna Ray
Small molecular diagnostic firms face a multitude of challenges when it comes to commercializing their products, but one company is hoping to circumvent some of these obstacles by marketing its test just as much to pharmaceutical firms as it does to physicians.
South San Francisco-based Crescendo Bioscience, which sells the Vectra DA test for monitoring rheumatoid arthritis, has made educating pharma sales divisions a key part of its commercialization strategy since launching the laboratory-developed test more than a year ago.
Vectra DA, which Crescendo launched as a laboratory-developed test in 2010, analyzes 12 proteins in a patient sample, and yields a score between 1 and 100 that quantifies RA disease activity. After this initial assessment, doctors can continue to use the test to monitor how patients are progressing and potentially make faster treatment decisions. The company believes that Vectra DA is an improvement over DAS28CRP, the standard tool for measuring disease activity for RA patients, which requires doctors to squeeze patients' already painful joints.
Crescendo is selling its test in a rapidly growing market, crowded with several blockbuster therapies. In 2009, the global market for RA drugs was estimated to exceed $13 billion and the market is projected to grow to more than $17 billion by 2015. Ted Snelgrove, Crescendo Bioscience's chief commercial officer, told PGx Reporter that Vectra DA should not pose a threat to RA drug sales, since the test doesn't tell doctors which specific treatments to prescribe. Nevertheless, by providing insights into individual patients' disease activity, the test does become a tool in a doctor's treatment strategy armamentarium, which some pharmas could perceive as influencing prescribing behavior.
As such, Crescendo has crafted a marketing strategy for Vectra DA keeping in mind that the test plays in a market dominated by multiple branded therapies and that its sales team will call on the same 3,500 US rheumatologists that those pharma reps visit. Crescendo's marketing and sales officials regularly meet with drug companies to make sure they are aware of the test, to clear up any misconceptions, and to essentially protect against being trampled over by pharma's sales legions.
"It's like being a mouse and going into a tent filled with elephants," Snelgrove said. "The elephants might not see you and step on you by accident. The magnitude size difference [between pharmas and test makers] is so great that that's really a danger for the small diagnostics companies."
An 'Imbalanced' Picture
Recent examples of successfully codeveloped personalized medicine products — such as the oncologics Zelboraf and Xalkori and their companion tests — indicate that pharmaceutical companies will invest in spreading the word about diagnostics when drug sales are dependent on their adoption. But a drug developer has little incentive to promote a test that hasn't been codeveloped with its drug and that could potentially limit sales of the treatment. In light of this, Crescendo believes that educating drug companies will be just as critical to the commercial success of its test as marketing to physicians.
Although pharma's promotional spending has declined in recent years, there are currently more than 80,000 drug reps calling on approximately 700,000 physicians in the US. Most diagnostic shops cannot hope to compete with the commercial scale and marketing dollars at large pharmas.
According to figures provided by the personalized medicine-focused consulting firm Diaceutics, a diagnostic developer may spend $20 million to drive adoption of a new test by inking reimbursement contracts, launching trials, setting up laboratory services, and promoting the test. "This investment may still not be enough to drive rapid adoption of the test but will get the test into mainstream clinical use over perhaps a decade," Diaceutics CEO Peter Keeling told PGx Reporter. In contrast, Keeling estimated that pharma will spend 10 times this amount annually to market a drug in the years after its launch in order to capitalize on patent life remaining after commercialization.
"Frankly this imbalanced investment picture is one of the things holding back personalized medicine and a primary reason why diagnostics companies want to get pharma involved," Keeling said.
In light of this inequity in marketing dollars for drugs and diagnostics, it could benefit test makers to foster good will with pharmas in order to ensure that drug sales reps aren't spreading negative messages about their diagnostics.
Crescendo currently employs a 15-rep sales force that calls on one-third of the estimated 3,500 rheumatologists in the US, concentrating on the eastern seaboard, the northwest, and the southwest regions. The company plans to double the number of sales reps in the next 12 months and expand its coverage to the entire US market, though Snelgrove wouldn't reveal how much money the company has set aside for marketing Vectra DA to labs, doctors, pharma, and other players.
"The commercialization challenge is a fairly large one for [diagnostic] products in this field," Snelgrove said. Products such as Vectra DA "require that you teach doctors to think in a different way."
Crescendo has held meetings with most of the major drug developers in the RA space, he said. The aim of these discussions is to educate pharma about Vectra DA and to assuage any reservations the companies might have about how the test is being marketed. Several members of the company's sales team have experience in the pharmaceutical industry, so Crescendo officials can speak pharma's language when meeting with them, Snelgrove said.
He likened Crescendo's interactions with pharma to a newcomer in a territory establishing diplomatic relations with the people who were there first. "Whenever you go into a market like this, when you have strong [pharma] interests, if one or more of those companies were to take the wrong idea and decide that they didn't like us, and they decided to have their sales forces encourage doctors not to work with us, well I could have the greatest science in the world, but with … thousands of sales reps calling on this audience, I can't really afford to fight negative messaging from that audience in that sector," he reflected. "It's like David and Goliath."
It's likely that Crescendo is in the minority among diagnostics shops when it comes to engaging pharma as part of its marketing strategy, however. In its interactions with diagnostic firms, Diaceutics often encounters test makers who find it daunting to reach out to big pharma players. Often, diagnostic shops can't even find the appropriate person within a drug company to speak to. And when diagnostic companies do meet with drug developers, they often complain that pharma asks a lot of questions but provides little feedback, according to Keeling.
"On the diagnostic side, such meetings [with pharma] would benefit from diagnostic companies focusing less on the platform or technology and more on how the test will be used in clinical practice and their plan to effectively diffuse the new test," Keeling said. "On the pharma side, there needs to be a more generous sharing of project objectives with a new therapy and articulation of their needs."
Going Up Against Pharma
Although a test like Vectra DA, not linked to the efficacy or safety of any particular drug, may ultimately benefit from an educated pharmaceutical sales force, this same model doesn't necessarily hold for all diagnostics.
"As personalized medicine becomes more mainstream, we are convinced that positioning a drug launch toward or away from a diagnostic will become part of the competitive landscape," Keeling said. "This is not necessarily good news for small diagnostic companies who find themselves at loggerheads with a major therapy launch."
Some pharmas are already characterizing diagnostic testing as a disadvantage for rival drugs. For example, in selling its anti-platelet drug Brilinta, AstraZeneca has positioned its treatment against competitor Plavix (clopidogrel) by highlighting that doctors can avoid genetic testing when administering Brilinta.
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Brilinta's label notes that in a genetic substudy, the effects of the drug compared to clopidogrel on thrombotic events and bleeding "were not significantly affected by CYP2C19 genotype," as is the case with Plavix.
This doesn't bode well for diagnostic companies and labs selling CYP2C19 tests. Diagnostics developers in this market are further challenged by the fact that they cannot count on the support of Plavix sponsors Sanofi-Aventis and Bristol-Myers Squibb.
Although Plavix's label notes that CYP2C19 genotype testing "can be used as an aid in determining therapeutic strategy" and recommends that physicians "consider alternative treatment or treatment strategies in patients identified as CYP2C19 poor metabolizers," the label doesn't require genetic testing and doesn't make specific dosing recommendations based on genotype.
Furthermore, the US Food and Drug Administration has yet to clear a CYP2C19 PGx test for Plavix. This may be largely due to the fact that the drug is slated to lose patent protection this year, providing little incentive for drug sponsors or competitors to work with a diagnostic company to conduct the studies necessary for an FDA-cleared companion test.
And although the CYP2C19 information on Plavix's label was informed by meta-analysis funded by Sanofi-Aventis and BMS, these companies have subsequently paid for a study that has shed doubt on earlier data showing that patients with CYP2C19 loss-of-function alleles have limited response to the drug (PGx Reporter 9/1/2010).
Given this scenario, AutoGenomics has its work cut out in marketing its Infinity CYP2C19 Assay, which received FDA clearance in 2010. Ramnath Vairavan, senior VP of sales and marketing at AutoGenomics, acknowledged that while Plavix sponsors have funded CYP2C19 PGx research, "there is always some push back, including efforts to discredit established literature using 'meta-analyses' that further convolute and confuse the issue rather than reveal a definitive value to the PGx testing."
Autogenomics has tried to reach out to BMS in hopes of establishing a relationship with the company around CYP2C19 testing, "but those efforts were in vain," Vairavan said. "They are obviously concerned that such testing could hinder their sales."
Further complicating AutoGenomics's marketing strategy for the Infinity assay is that the FDA-cleared indication for the test does not specifically mention Plavix PGx. According to the test's label, the CYP2C19 Infinity Assay may be used to determine the therapeutic strategy for "drugs … metabolized by the CYP450 2C19 gene product." At the time the test was cleared, an FDA spokesperson told PGx Reporter that AutoGenomics had not submitted the necessary data to garner a PGx testing indication for Plavix (PGx Reporter 10/27/2010).
This indication potentially allows the Infinity assay to be used as an FDA-cleared tool to inform treatment strategies involving drugs other than Plavix, and to differentiate the test from other CYP2C19 LDTs not approved by the FDA.
AutoGenomics marshalls a team of 15 reps and cardiology sales specialists who call on clinical reference labs, interventional cardiologists, gynecologists, cytopathologists, genetic counselors, and oncologists at hospitals. "Our strategic focus [for the CYP2C19 test] has been to work with reference labs or heart labs offering cardiovascular risk assessment panels and get the message out directly to the cardiologist or interventional cardiologist on the benefits of genetic testing in dosing the patient," Vairavan said. The company updates doctors regarding recent publications about CYP2C19 testing through webinars and workshops at trade shows.
These efforts are paying off, according to Vairavan, who said the company's clients have reported 50 percent volume increases for the CYP2C19 assay in the last few months. "The number is projected to increase as further awareness is spread into the general testing community," he said.
Capturing Pharma Interests
In addition to smoothing the commercialization pathway for existing tests, an aggressive pharma outreach strategy could also lay the groundwork for diagnostic firms looking to secure personalized medicine collaborations with drug developers.
According to market research firm DeciBio, the market for molecular diagnostics was $5.9 billion in 2011 and will increase to more than $10 billion in three years. Molecular diagnostics growth will "continue to be driven by increased incidence of chronic diseases due to an aging population, increased availability of various tests, and the further adoption of pharmacogenomics/personalized medicine," DeciBio said in a report released this week.
As the molecular diagnostic market matures, it's likely there will be an influx of tests like Crescendo's Vectra DA that address large disease markets such as cancer, cardiovascular disease, and neurological conditions, for which drug developers are already marketing high-priced drugs. On the one hand, there will be some pharmas that view with suspicion any diagnostic tool with the potential to influence doctors' treatment decisions. On the other hand, many drug developers are investing in personalized medicine treatment strategies, and would welcome the opportunity to gain greater insights into disease biology in partnership with test makers — especially if that leads to internal R&D cost savings on biomarker discovery and validation.
"Most drug companies focused on a disease area and thinking about personalized medicine have some sort of scanning for the tests on the market and in the pipeline," Diaceutics' Keeling said. "Our research suggests, however, that pharma companies often find it hard to understand the potential disease management impact of the plethora of biomarkers and tests that populate a disease area. Add to this the fact [that] some of their own discovery or biomarker teams may be working to find unique gene signatures and you can begin to see the competitive context for a company like Crescendo."
Keeling believes that in the coming years, the power dynamic between drug and diagnostic companies will change when pharmas invest in developing personalized medicines beyond oncology. As increasing knowledge about the influence of genomics raises the profile of molecular diagnostics in patient care, pharma sales reps will have to speak to doctors about the efficacy and safety of their treatments in genomically targeted patient populations.
"The more that is understood and witnessed of the power of diagnostics to disproportionately reshape a treatment area toward or away from a particular therapy, the more likely it is that pharma will participate more actively with diagnostic companies," Keeling said.
However, historically, one of the main concerns for pharmas when they consider diagnostic tools like Vectra DA or the Infinity CYP2C19 Assay has been whether such tests will limit the sales of their drugs or direct patients to competing drugs. But as drug makers increasingly apply molecular strategies to identify best responders to treatments early in their development programs, diagnostic companies like Crescendo have an opportunity to benefit from pharma's growing interest and investment in personalized medicine.
"What we've been able to do is go in and say, 'You have been making very sophisticated scientific arguments in favor of your therapeutic compounds. They depend on a complex mechanism of actions that rely on understanding of disease biology. So, what we're doing with Vectra DA is we're bringing a lot of that disease biology to life for these customers,'" Snelgrove said. To that end, "we're a tide that lifts all boats in terms of raising the understanding in the field around disease biology."
Snelgrove was VP of sales and marketing at Genomic Health before joining Crescendo. Reflecting on his experience commercializing Oncotype DX, he noted that drug developers were really not part of the strategy when it came to launching Genomic Health's breast cancer recurrence test. Although Oncotype DX can help oncologists discern whether early stage, node-negative, HER2-negative breast cancer patients should receive chemotherapy in addition to tamoxifen, most of the treatment strategies for this patient subset involve generic treatments.
"So, in the example of Oncotype DX, it wasn't really important for us to partner with pharma early. The drug developers really didn't have a dog in that fight," Snelgrove said. "It's the nature of the rheumatology market that really drives this strategy" for Crescendo, he added.
Since Oncotype DX's availability in 2004, personalized medicine has moved beyond a buzzword for pharma, and large drug developers are inking early-stage collaborations with molecular diagnostic firms to discover markers associated with the compounds in their pipelines, to stratify patients in clinical trials, and to familiarize themselves with advanced technologies, such as next-generation sequencing. Although the "commercial side discussions are very different from discussions you have with R&D at these companies," Snelgrove observed that pharma sales teams are also becoming knowledgeable about the different factors that might influence patient responses to treatments they're selling.
"You're seeing across pharma … a move toward understanding how they can get their products to the people who will benefit the most. They want doctors to prescribe their products and they want to see them working well [in patients,]" he said. "They don't like it when doctors prescribe their products and they don't work well, because even though they make money on it, it weakens their brand, it weakens the perception of efficacy of the product.
"If doctors can match patients to the right therapy, conceptually, pharmas know that favors them over time."
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Moreover, by having early discussions with drug developers on the sales and R&D side, Crescendo is also setting the stage for future collaborative research projects and comarketing relationships if the company eventually decides to enter the companion diagnostic market for RA drugs.
In line with this strategy, Crescendo is a participant in the BATTER-UP trial, which aims to validate a gene expression signature and discover other markers associated with response to various anti-TNF drugs for RA. Other trial sponsors include Biogen Idec, BMS, Centocor Research & Development, Genentech, Medco Health Solutions, Regeneron Pharmaceuticals, and Sanofi-Aventis.
BATTER-UP investigators plan to enroll 1,000 patients being treated by one of several marketed anti-TNF RA drugs: Enbrel (Amgen/Pfizer), Remicade (J&J/Centocor), Humira (Abbott), Simponi (J&J/Centocor), or Cimzia (UCB). While the BATTER-UP trial will initially focus on validating a previously published gene signature predictive of patient response to anti-TNF agents, Crescendo will use a "locked algorithm" to potentially evaluate a set of serum markers (PGx Reporter 11/17/2010). Additionally, Crescendo is developing a predictive diagnostic test to gauge response of RA drugs, called Vectra TS.
Although Crescendo's primary focus for the time being is commercializing Vectra DA, the company said that drug developers have "expressed strong interest" in using the company's molecular diagnostics expertise to run faster and cheaper clinical trials, and improve understanding of how a patient's disease biology is interacting with the mechanism of action of the drug.
"As you can imagine, in a field where clinical trials are challenged by high placebo response rates for efficacy endpoints that are still based on subjective measures, it can be very useful to have an absolute metric like Vectra DA that is immune to placebo response and provides a precise measure that does not differ between investigators or study sites," Snelgrove said.
Similarly, Foundation Medicine is participating in a number of R&D collaborations with drug developers to apply its next-generation sequencing-based cancer diagnostic to research efforts. Separate from these R&D collaborations, the company had a soft launch of its cancer diagnostic late last year, and plans to begin nationally commercializing the test to pathologists and oncologists later this year.
A Foundation Medicine spokesperson told PGx Reporter that while certain pharma players may still view molecular diagnostics for guiding therapeutic strategies as bad for their drug sales, the company hasn't found any drug developers that view its next-gen sequencing test as a threat. "We have not encountered this concern, and therefore have not had to communicate with drug developers on it," the Foundation Medicine spokesperson said.
This may be due to the fact that pharmacogenomics strategies are used to personalize treatments much more readily for cancer patients than they are for patients with other diseases. As a result, drug developers may be more comfortable with diagnostics in the oncology market. Additionally, since Foundation Medicine hasn't yet begun broadly marketing the test, it is currently unknown how pharma's commercial interests will line up with Foundation Medicine's marketing strategy for the test.
Regulatory Considerations
Regulatory changes in the diagnostics field also have implications for how molecular tests are marketed, as well as dictate what test makers, labs, and drug developers can claim about the assay to doctors and patients.
A test designed to discern whether a patient will respond to a specific drug would probably fall under the US Food and Drug Administration's definition of a companion diagnostic, and would likely require premarket approval. Tests such as Abbott's ALK mutation assay for Xalkori and Roche's BRAF mutation test for Zelboraf fall under this category. However, Crescendo, AutoGenomics, and Foundation Medicine are not marketing their tests as companion diagnostics that would require a regulatory link to a marketed drug. Rather, their tests are LDTs intended to be used as tools that doctors can use to inform the broader treatment strategy for patients.
"At the moment we have to think about the fact that our test is not linked to any therapies and we don't ever want to mischaracterize it as a differential diagnostic," Snelgrove said. "It's easy for people to get confused about this."
Just as molecular diagnostic firms are wary of pharma reps speaking negatively of their products, drug makers also want to know that marketing teams for diagnostic companies aren't swaying doctors about which treatments they ought to prescribe. So, when Crescendo sales reps call on doctors, "we need to be careful to not talk about therapies and we don't," Snelgrove said. The company's reps "just talk about how our test describes this natural phenomenon of disease activity in rheumatoid arthritis, being very basic about it at that level. That's how we can commercialize under the current regulatory environment."
Similarly, Foundation Medicine also emphasized that its pharmaceutical relationships and diagnostics business are entirely separate. "Our pharma collaborations will have no part in marketing our test," the spokesperson said.
The FDA has so far expressed its intent to regulate LDTs but it hasn't formally issued any guidelines. Snelgrove said that when FDA announces its regulatory plans for LDTs, Crescendo will be ready to comply. "We're fully prepared to transition into an FDA state," he said. "We developed [Vectra DA] under design control with that in mind."
Depending on where FDA's LDT regulations fall, and if Crescendo decides to pursue a pharmacogenomic indication for one of its future tests, then the company's marketing strategy may become more intertwined with pharma and the language of its sales reps may also change.
"If we're able to move into areas where we are therapy specific, then we will pursue a regulatory strategy that would allow us to make those claims and I'm sure we'd be collaborating with pharma in that case," Snelgrove said. "But that's downstream."
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