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Personalized Medicine 2014: LDT Guidance, More PGx Drugs, Changing Business Models, Lawsuits Galore

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NEW YORK (GenomeWeb) – Whatever happened in the field of personalized medicine over the last 12 months, the US Food and Drug Administration-issued plan for regulating laboratory developed tests has stolen the spotlight.

The FDA's long-stated intent to regulate LDTs has been and continues to be a divisive, hot-button topic. The agency's past attempts to regulate certain sectors of the lab industry was thwarted by industry pushback and the latest draft LDT guidance was held up by the Obama Administration for months likely due to the unfriendly climate on Capitol Hill. It got to a point where some industry pundits started to wonder if the storied guidance would ever be released. At the end of July, when it became evident that an LDT guidance was imminent, the agency made a calculated move and notified Congress of its intent to release the draft plan just before legislators went on a summer recess.

According to those knowledgeable of the FDA, the agency showed its hand precisely when it did to minimize partisan pushback in Congress. By the time lawmakers would return to the capital from their summer break, Washington would be engrossed in the midterm elections, and the LDT guidance wouldn't get much attention. Meanwhile, the 60 days that the FDA was bound to wait between notifying Congress and releasing the guidance for public comment would run out, and the agency could move ahead with its plans.

At least publicly, at first the FDA's opportunistic timing appeared to be working in its favor. In September, the House Energy and Commerce Committee's subcommittee on health held a hearing on LDT regulation, where legislators weren't too hard on the FDA and during which lab industry members, who maintain that FDA regulation on their tests will be an overburden or misplaced, had equal opportunity to air their objections. The following month, FDA released the draft document for public input.

It wasn't until after the elections, however, with Republicans holding both houses of Congress, that detractors of FDA regulation really began to mount a fight. The Association for Molecular Pathology spearheaded a lobbying push in mid-November to educate legislators about how incongruent FDA's LDT plans would be with pathologists' efforts to provide and interpret lab tests. The American Clinical Laboratory Association applied further pressure on the agency to abandon its oversight plans by retaining top lawyers.

Meanwhile, the American Medical Association sent a letter, signed by a string of diagnostic firms and academic labs, asking the agency to advance regulations using more transparent and legally binding rulemaking procedures, instead of guidance. Industry insiders say that those pushing FDA to pursue rulemaking to change LDT policies have some legal precedent on their side. Even NIH-funded researchers, performing studies involving new next-generation sequencing tests and facing the specter of FDA regulation for the first time, have voiced their concerns over that agency's reach into the LDT space.

All this tension is mounting in anticipation of Jan. 8 and 9, two days during which stakeholders will have the chance to communicate their grievances directly to the FDA. The schedule published by the agency – featuring speakers representing diagnostic firms, private and academic labs, top cancer centers, industry groups, and the investor community – promises some fireworks. Ahead of the meeting, Alberto Gutierrez, director of the Office of In Vitro Diagnostics at FDA's Center for Devices and Radiological Health, answered questions GenomeWeb has heard from industry players on the agency's LDT oversight efforts. 

Since FDA is kicking off 2015 with a meeting on LDT regulation, the life sciences community will likely continue to focus on it throughout the coming year. "For many reasons, I think that the regulation of laboratory-developed tests will dominate the conversations in personalized medicine in 2015," Amy Miller, executive VP at the Personalized Medicine Coalition, told GenomeWeb.

In addition to FDA's own meeting on the topic, Miller noted that the House of Representatives' 21st Century Cures Initiative has asked the life sciences community for information on the regulation of the space. As part of this initiative, spearheaded by Rep. Fred Upton (R-Mich.), chair of the House Energy & Commerce Committee, legislators are gathering input on the scientific and policy gaps hindering medical advances.

"We expect that their extensive legislative package will have something to say on the matter," Miller said. Additionally, after January, once the public comment period on the LDT draft guidance closes, "we can expect to see considerable advocacy from the community on the suggestions sent to FDA," she added.

New drugs and tests

While some industry players have been preoccupied with FDA's moves on LDTs, the agency has been steadily approving new molecularly targeted drugs and companion tests. The FDA kicked off 2014 approving the combination of two GlaxoSmithKline drugs, Mekinist and Tafinlar, as an option for advanced BRAF-mutated melanoma patients. The FDA had approved Mekinist and Tafinlar as individual treatment options for melanoma patients in 2013. Additionally, in 2014 the agency expanded the indication for Vertex Pharmaceutical's Kalydeco (ivacaftor) for cystic fibrosis patients with G551D and R117H CFTR gene mutations.

In terms of new molecular entities and biologics approved last year, out of 41 therapies that came on the market in 2014, two notable personalized therapies are Novartis' Zykadia (ceritinib) for metastatic non-small cell lung cancer patients with ALK-mutated tumors and AstraZeneca's Lynparza (olaparib), the first PARP inhibitor for BRCA-mutated advanced ovarian cancer patients.

The FDA also granted "breakthrough designation" to a number of molecularly targeted investigational therapies – such as Clovis Oncology's EGFR inhibitor CO-1686 and Pfizer's palbociclib for HER2-negative, estrogen receptor-positive breast cancer. Based on preliminary evidence, breakthrough drugs must substantially improve patients' outcomes over existing treatment options, and as such, the FDA will expedite their review.

"While advocates for personalized medicine have often been charged with overselling the concept, in 2014, I think we saw a tipping point for personalized medicine. Now targeted therapeutics are commonly cleared by FDA," Miller said. "Many medical centers are branding themselves as providing personalized medicine and by that they mean targeted treatments. I think we can expect to see this growth continue."

The increasing availability of personalized drugs suggests that drug developers are also having to think more about how to efficiently employ diagnostics that identify which patients will respond to their therapies. For example, Zykadia, which was approved for advanced NSCLC patients who are no longer benefitting from Pfizer's Xalkori (crizotinib), Novartis didn't develop a companion diagnostic to identify which patients have ALK mutations because these patients will have had their tumors genetically analyzed during earlier disease stages when considering treatment with Xalkori.

Lynparza, however, was approved alongside Myriad Genetics BRACAnalysis test as a companion diagnostic that would gauge germline BRCA mutations in heavily treated ovarian cancer patients. Notably, the companion test gauges germline mutations, which by Myriad's own analysis won't capture all patients (i.e. those who have somatic BRCA mutations) who could benefit from treatment with a PARP inhibitor.

To date, AstraZeneca hasn't publicly expressed plans to launch a companion test in the US for Lynparza that can analyze somatic mutations, even though Myriad will be offering a tissue-based version of BRACAnalysis in the European market. Doctors could access tissue-based tests from other labs, but those aren't FDA approved as a companion test for Lynparza.

It's not clear why AstraZeneca wouldn't pursue a tissue-based CDx in the US, if such a test would indeed identify more patients who could receive Lynparza. Ultimately, the company's decision may reflect the fact that drugmakers still find FDA's regulatory process for companion diagnostics challenging while they are trying to coordinate a simultaneous drug and test launch. 

Around the time the FDA informed Congress of its plans to regulate LDTs, the agency also finalized the draft guidance on companion diagnostics. In this conclusive version, the agency reiterated that it prefers parallel development and review of a drug and its companion test. However, the agency also acknowledged that there might be situations where such an ideal, coordinated approach is not possible.

Changing business models

What is not addressed by FDA in the CDx guidance are the problems that drugmakers will increasingly face as different targeted drugs become available for the same molecularly defined subpopulation of patients. For example, today there are two drugs for EGFR-mutated NSCLC and many more under development; three therapies for BRAF mutated melanoma; two options for ALK-positive NSCLC; and several choices for breast cancer patients with HER2 overexpression.

As more personalized treatment options compete for small patient subpopulations, the one-drug-one-test paradigm will become untenable. Given the difficulties with garnering tissue samples in many cancer indications, drugmakers will need to work together to advance universal testing platforms and healthcare providers will need to test patients' tumors earlier in their disease continuum.

The FDA has started to think about the new regulatory approaches that are necessary to advance universal platforms, which will require the use of NGS technology, and plans to issue guidance on the topic. The agency issued a white paper to get industry thinking about the challenges of establishing the validity of such tests and will hold a meeting to discuss novel oversight approaches in 2015.

Drugmakers are also figuring out how to employ NGS tools to identify responders to their therapies and several companies this year announced plans to study the use of these platforms. Specifically, pharma companies are testing out the use of Myriad's homologous recombination deficiency test, while others are using Illumina's MiSeqDx, Thermo Fisher Scientific's PGM Dx, and Foundation Medicine's FoundationOne. Drug companies are also collaborating on studies such as Lung-MAP, a National Cancer Institute-sponsored trial in which multiple pharmas are using Foundation Medicine's NGS panel to stratify squamous cell lung cancer patients into various therapeutic arms in a Phase II/III study.

Novartis, meanwhile, continued to experiment with biomarker-based clinical trial models through its Signature Program, in which patients are enrolled into mutation-specific study protocols that are tissue agnostic. The project, researchers have said, turns the traditional, tumor-specific clinical trial paradigm on its head. This year, participation in this program grew, suggesting that researchers are working toward establishing new ways of studying molecularly targeted drugs that are ill-suited for gold-standard randomized-controlled trials.

In 2014 Diaceutics CEO Peter Keeling saw greater commitment among pharma companies toward changing the healthcare ecosystem into which their products are being studied, developed, and prescribed. "2014 has seen an inflection point with better coordination and strategic planning emanating from our pharma clients," Keeling told GenomeWeb. For example, GSK this year invested in setting up a global lab network with Clarient Diagnostics Services in an effort to improve patients' access to personalized treatments.

Although Keeling sees some pharma leaders starting to change business and clinical models to advance personalized medicine, this type of thinking hasn't yet gone mainstream, in his view. For that, according to Keeling, the field needs an "integrator" — an entity that can bring together the divergent stakeholders and foster collaborations in a way that eases some of these systemic challenges and competing interests. 

Groups like the Multiple Myeloma Research Foundation are already acting in an integrator capacity, but Diaceutics is focused on identifying other groups that can play such a role. At a meeting hosted by Diaceutics earlier this year, attendees agreed to gain the commitment of such an integrator in kickstarting personalized medicine efforts for an oncology and a non-oncology indication.

Market-based system

Many in the life sciences field, particularly molecular diagnostics shops, continued to identify reimbursement as their greatest challenge in 2014. Ever since the AMA issued new CPT codes for molecular diagnostics and the Centers for Medicare & Medicaid Services issued prices for them, industry players have criticized the agency for undercutting the value of such tests.

Particularly worrisome for diagnostic developers was when, in its Physician Fee Schedule Final Rule, CMS stated last year that it would annually review how tests described by CPT codes have changed from a technological standpoint and adjust payment accordingly. Unaccustomed to dramatic payment cuts, the diagnostic community banded together in supporting the "Protecting Access to Medicare Act of 2014" (PAMA).

Under PAMA, which was signed into law in April, payments for molecular tests will move to a market-based payment system for diagnostics starting in 2017. CMS will pay labs according to the weighted median of rates from private payors for tests, and labs will have to begin reporting rates from payors to CMS in 2016.

The lab industry expects that this system will make payment reductions more predictable. The law states that the Medicare payment for a test cannot be reduced more than 10 percent compared to the price in the previous year between 2017 and 2019 or more than 15 percent between 2020 and 2022.

Specter of litigation

The patent landscape for genomic tests has continued to evolve since the US Supreme Court ruled last year in Association for Molecular Pathology v Myriad Genetics that DNA segments isolated from the body are patent-ineligible. In the same decision, the court also ruled that cDNA or synthetically created DNA is patent-eligible when the sequence in different from that found in nature.

Subsequently, Myriad sued several competing diagnostic firms asserting that these companies were infringing valid IP on methods and primers underlying its genetic tests. In Myriad's view its primer claims are akin to the cDNA that the court upheld as patent eligible because they are synthetically created. Many of Myriad's method claims weren't challenged before the Supreme Court. Meanwhile, Myriad's competitors have argued that primers are patent-ineligible, because like isolated gene sequences, they have the same function and structure as patent-ineligible, naturally occurring DNA.

In March 2014, Judge Robert Shelby of the US District Court for the District of Utah denied Myriad's request for a preliminary injunction against Ambry Genetics, a firm that had launched a number of diagnostics that would compete with Myriad's test. Myriad challenged that decision with the US Court of Appeals for the Federal Circuit, which in December upheld the lower court's decision. Myriad has said it is considering its next steps.

The appeals court reasoned that the Utah court was correct in not granting an injunction against Ambry since claims in the three patents underlying Myriad's BRACAnalysis test that Myriad was asserting were patent-ineligible. The court found the four composition-of-matter claims directed at primers to be patent ineligible since they "are not distinguishable from the isolated DNA found patent-ineligible in Myriad and are not similar to the cDNA found to be patent-eligible," Judge Timothy Dyk wrote in his opinion. "Primers necessarily contain the identical sequence of the BRCA sequence directly opposite to the strand to which they are designed to bind. They are structurally identical to the ends of DNA strands found in nature."

With regard to the method claims at issue in the case, the court ruled that they are directed at the abstract mental process of comparing a patient's genes against a normal reference sequence and analyzing the differences. As such the claims describe an abstract idea that is patent-ineligible under the law. Moreover, Dyk wrote that the non-patent-ineligible elements of the method claims "do not add 'enough' to make the claims as a whole patent-eligible."

The appeals court's decision impacts lawsuits in which Myriad is involved with several other diagnostic companies, including Quest, Counsyl, and GeneDx, since Myriad had asked that the cases be consolidated under the banner In Re: BRCA1- and BRCA2-Based Hereditary Cancer Test Patent Litigation.

The life sciences industry has been following these cases closely and many are concerned that the courts' invalidation of Myriad's patent claims may make it more difficult for drug and testing firms to garner IP protection for their personalized medicine discoveries and force them to rely more on trade secrets. The USPTO meanwhile has added to these worries by issuing guidelines on how its patent examiners should determine whether a claim is patent-eligible in light of Myriad and other recent cases.

Industry players had found the first iteration of USPTO guidelines issued in March too restrictive. Since then, legal experts such as Foley & Lardner's Courtenay Brinckerhoff has written that the USPTO's updated version includes welcome revisions that would allow examiners to consider all characteristics on a nature-based product, "including functional differences and properties that are not present in the naturally occurring product."

Separate from these patent cases, the lawsuit that raised the most eyebrows in 2014 was when Hawaii Attorney General David Louie sued Plavix manufacturers Bristol-Myers Squibb and Sanofi-Aventis in March. In the lawsuit, Louie accused the drugmakers of deceptively marketing and unfairly labeling Plavix since its launch more than 15 years ago. In particular, he said the companies failed to alert consumers that Plavix has "a diminished or no effect on approximately 30 percent of the [Hawaiian] population because they metabolize the drug poorly due to their genetic traits or because they take other drugs that affect the body's ability to metabolize Plavix."

Many personalized medicine supporters have opined that only the specter of litigation can spur drugmakers to invest more heavily in the field and convince healthcare providers to broadly implement molecular diagnostic strategies in their practices so precision care becomes mainstream care. "Some pharma teams are realizing that a well-designed [development and commercialization] strategy can actually deliver superior financial returns and therefore are seeing for themselves the carrot in personalized medicine," Diaceutics' Keeling observed. "In our view, such litigation illustrates the arrival of the stick. Both will be required to encourage [pharma] to integrate personalized medicine as a core part of the new business model versus the often selective adoption witnessed to date."

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