TABLE OF CONTENTS
1. Overview 6
1.1 Statement of Report 6
1.2 About This Report 6
1.3 Scope of the Report 7
1.4 Objectives 7
1.5 Methodology 8
1.6 Executive Summary 9
2. Introduction to Molecular Diagnostics 13
2.1 Opening Up of Opportunities in Molecular Diagnostics 13
2.2 Impact of the Human Genome Project on Molecular Diagnostics 15
2.3 Considerations for Molecular and Clinical Diagnostics 16
2.4 Molecular Diagnostics in the Post-Genomic Era 19
2.5 Advances in Molecular Diagnostics Technologies 20
2.6 Oligonucleotide Array Platforms 21
2.7 Emerging Cancer Personalized Medicine Market 22
2.8 Companion Tests for Drug Development 24
3. Cancer Diagnostics Molecular Testing Market 27
3.1 Market Description 30
3.1.1 Market Overview 30
3.1.2 Tumor Markers 31
3.1.3 Molecular Diagnostic Markers 39
3.1.4 Competitive Landscape 40
3.1.5 Sales and Marketing Strategies for Cancer Tests 42
3.1.5.1 North American Market 44
3.1.5.2 International Markets 45
3.1.5.3 Europe 45
3.1.5.4 Asia/Pacific 46
4. Molecular Diagnostic Tests for Cancer 47
4.1 Cancer Diagnostic Tests 47
4.1.1 Use of Genomics to Understand Cancer 48
4.1.2 Molecular Diagnostic Tools Solutions 50
4.1.3 Technology of Gene Expression Analysis 51
4.1.3.1 Amplify and Detect Diminished Amounts of RNA Consistently 51
4.1.3.2 Analyze Hundreds of Genes 52
4.1.3.3 Employ Advanced Information Technology 52
4.2 Breast Cancer 53
4.2.1 Cancer Prognostic Assays 54
4.2.1.1 Oncotype DX 56
4.2.2 Single Gene Reporting (ER, PR, HER2) 57
4.2.2.1 Node Positive (N+) 57
4.2.2.2 Aromatase Inhibitors 57
4.2.3 Product Development 58
4.2.3.1 Product Development Opportunities in Breast Cancer 58
4.2.4 InterGenetics, Incorporated 58
4.2.5 HER-2 59
4.2.6 BioTheronostics (AviaraDx) 62
4.2.7 Agendia B.V. 63
4.2.8 Exagen 65
4.2.9 Applied Genomics 65
4.3 Colorectal Cancer Molecular Diagnostics Market 66
4.3.1 Players in the Colorectal Cancer Space 68
4.3.1.1 Background on KRAS Mutation 74
4.3.1.2 BRAF Mutation Analysis 77
4.4 Prostate Cancer Molecular Diagnostics Market 78
4.5 Other Cancer Molecular Diagnostic Markets 83
4.5.1 Bladder Cancer 83
4.5.2 Ovarian Cancer 84
4.5.3 Lung Cancer 84
4.5.4 Melanoma 88
4.6 Molecular Diagnostic Screening Test for Cancer 89
4.6.1 Extreme Drug Resistance assay (Oncotech EDR Assay) 90
4.6.2 Multidrug Resistance Protein (MRP) 90
4.7 Companion Diagnostic Tests for Cancer Therapeutics 91
5. Business 93
5.1 Technology and Market Trends 93
5.1.1 Technology Trends 93
5.1.2 Market Trends 93
5.2 M&A Activity 95
5.3 Partnerships 97
5.4 Competitive Analysis 98
5.4.1 Primary Competitors 98
5.4.2 Industry Challenges and Strategic Recommendations 100
5.4.3 Commercialization of Molecular Diagnostic Products 100
5.5 SWOT Comparison of Business Models for Cancer Diagnostic Testing 102
5.6 Intellectual Property Rights 118
6. Reimbursement and Billing 119
6.1 Overview 119
6.2 Trends in Reimbursement Practice 119
6.2.1 Medicare Reimbursement 119
6.2.2 Analysis of ROI for Molecular Diagnostic Tests for Cancer Using Medicare
Reimbursement Rules 123
6.2.3 Reimbursement for Insight Dx, MammaPrint and Oncotype Dx 123
6.3 Breast Cancer Tests 124
6.4 Colon Cancer Tests 125
6.5 Trends in Patient Care and Reimbursement 127
6.6 Revenue Threats 128
6.6.1 Medicare Exceptions 130
6.6.2 Three Areas for Denial of Claims by Biomarkers 130
6.7 Billing 131
6.7.1 Medicare Billing Procedures 131
6.7.2 Medicare CPT Coding Rules for Cancer Biomarkers 132
7. Government Regulation 133
7.1 U.S. Food and Drug Administration 133
7.2 CLIA Regulations 134
7.3 Clinical Laboratory Improvement Act (CLIA) 135
7.4 State Licensing for Service Laboratories 137
7.5 IVDMIAs 137
7.6 510(k) Clearance 138
7.7 Pre-Market Approval (PMA) 138
7.8 ASRs 138
7.9 What Regulatory Guidance Is Needed for Companion Biomarkers? 138
7.10 U.S. Patent and Trademark Office (USPTO) 139
7.11 IRB Approval in Clinical Trials 140
7.12 Oncology Biomarkers Qualification Initiative Project 140
7.13 FDA Clearance Picture for Insight Dx, MammaPrint, and Oncotype DX 140
7.14 FDA Packaging Requirements for Erbitux 141
8. Business Decisions Using Molecular Diagnostic Tests in Drug Development 142
8.1 Advantages of a Pharmacogenomic Assessment of Genetic Biomarkers to
Determine Clinical Dose 142
8.2 What are Key Opportunities in Biomarker Discovery, Development and
Commercialization 142
8.3 What Are the Current Obstacles in Biomarker Implementation? 142
8.4 How Do Business Strategies, Such as Those Relating to Acquisition, Drive
Biomarker Strategies? 143
8.5 What is the Right Balance between Using External Partnerships and Developing
Internal Infrastructure? 143
8.6 How Might Novel Biomarker Development Lead to Acquisition Strategies? 143
8.7 Which Types of Genetic Biomarkers Should Be Developed by Diagnostic
Companies? 143
8.8 What Strategies Help Translate Genetic biomarkers From Preclinical to
Clinical Development? 143
8.9 In What Class of Drugs Is the Value of Using Genetic biomarkers in Decision
Making the Highest? 144
8.10 How Can Regulatory Oversight Drive Approval and Adoption of New
Technologies? 145
8.11 How Can Big Pharma Co-develop Genetic biomarkers in a Cost-sharing Model
for Regulatory Acceptance? 145
8.12 How Are Genetic Biomarkers Being Used to Reduce the Attrition Rate in Drug
Development? 145
8.13 How Is ROI Measured Using Genetic Biomarkers in Drug Development? 145
8.14 How Might Organizational Structures Limit the Use of Genetic Biomarkers in
Drug Development and How Should R&D Organizations Address This Problem? 145
8.15 How to Maximize Business Development through Biomarker Strategies 146
8.16 What Is the Best Type of Business Model for Developing Genetic Biomarkers?
146
8.17 What Are Organizational Impediments in Genetic Biomarkers in Drug
Development? 146
8.18 What Are Internal Capabilities for Novel Biomarker Development and
Application? 146
8.19 How Can Key Biomarker Technical Expertise Be Applied Across a Complex and
Highly-Stratified R&D Value Chain? 147
8.20 At What Stage of Drug Development Have Genetic Biomarkers Provided the Most
Benefit 147
8.21 What Companies Are the Most Innovative in Development of Genetic
Biomarkers? 147
8.22 Best Values for Genetic biomarkers in Drug Development and in Diagnostics
147
8.23 Molecular Diagnostic Tests Can Increase Value in an Associated Drug 147
9. Company Profiles 149
9.1 Agendia 149
9.2 ArcticDx Inc. 149
9.3 Arcxis Biotechnologies 149
9.4 Aureon Laboratories 150
9.5 bioTheranostics (AviaraDx) 150
9.6 Clarient, Inc. 151
9.7 CombiMatrix Corporation 151
9.8 DiagnoCure 152
9.9 DxS 152
9.10 Exagen Diagnostics, Inc. 152
9.11 Exiqon 152
9.12 Ferrer in Code 153
9.13 Genomic Health Inc. 153
9.14 Genoptix, Inc. 154
9.15 Gen-Probe 154
9.16 InterGenetics, Incorporated 155
9.17 LabCorp 155
9.18 Myriad Genetics 156
9.19 Nuerva Biosciences 156
9.20 Orion Genomics 157
9.21 QIAGEN 157
9.22 Rosetta Genomics 158
9.23 Sequenom 158
9.24 SABiosciences Corporation 158
9.25 Source MDx 158
9.26 Targeted Molecular Diagnostics 159
9.27 Xenomics, Inc. 159
Appendix 1: Definition of Terms for Molecular Diagnostics 161
Appendix 2: Standard Cancer Therapeutic Panels 163
Appendix 3: Menu of Specialized Technologies Used To Assess and Characterize
Cancer 166
Appendix 4: Technical Assessment of the KRAS Mutation Test by Several
Methodologies and Specialty Oncology Laboratories 168
Appendix 5: Overview of Microarrays 170
INDEX OF FIGURES
Figure 2.1: Finding Genes with Microassays 14
Figure 2.2: Use of Microassays for Studying Gene Expression 15
Figure 2.3: Using DNA Microarrays to Compare Cancer and Normal Cells 16
Figure 2.4: Microarrays for Prediction of Survival in Cancer 18
Figure 2.5: Finding New Drugs with Microarrays 23
Figure 2.6: Using Gene Expression Patterns to Chose Treatment 24
Figure 2.7: Segmentation of the Biomarker Development Market 25
Figure 3.1: Applications of Key Players and Market Share in Molecular
Diagnostics Testing Markets 29
Figure 3.2: Market Growth and Evolution of MD Cancer Biomarkers 43
Figure 4.1: Using DNA Microassays to Measure Gene Expression 49
Figure 4.2: Schematic of Molecular Diagnostics for Studying Gene Expression in
Patients 49
Figure 4.3: HER-2/NEU Protein as a Target in Cancer Therapy 59
Figure 4.4: ASCO-CAP Guidelines for HER2 Testing in Breast Cancer: Equivocal
Results with IHC 60
Figure 4.5: ASCO-CAP Guidelines for HER2 Testing in Breast Cancer: Results by
FISH 61
Figure 4.6: Action of Herceptin in Breast Cancer Patients 61
Figure 4.7: Analysis of Cancer Tissue by Microarray 64
Figure 4.8: Incidence of CRC by Age Group 67
Figure 4.9: HNPCC Mutation Increases Risk of Cancer 72
Figure 4.10: APC Mutation Increases the Risk of Cancer 73
Figure 4.11: KRAS Mutation Assay from Exiqon Diagnostics 73
Figure 4.12: KRAS Assays by Analytical Type 75
Figure 4.13: DxS KRAS Mutation Test Summary 77
Figure 4.14: Prostate Specific Membrane Antigen 79
Figure 4.15: Estimates for PCA3 Test Volume in U.S., 2005-2008 81
Figure 5.1: FDA Co-Developed Products as a Model for Collaboration 98
Figure 5.2: Segmentation of the Biomarker Development Market 116
Figure 6.1: Number of Oncotype DX Tests Performed, 2006-2009 124
Figure 7.1: OBQI and the Relationship of Governmental Regulatory Agencies 140
Figure 8.1: Discovery, Validation and Use of Genetic Biomarkers 144
INDEX OF TABLES
Table 2.1: Genes and Cancer Risk 18
Table 2.2: Use of Cancer Biomarkers to Enhance Patient Care 22
Table 2.3: Targeted Drug Therapies for Cancers 23
Table 2.4: Use of Cancer Biomarkers in Drug Development 26
Table 2.5: Utility of Biomarkers as Companion Diagnostics to Drug Development 26
Table 2.6: Time Line for Development of Companion Diagnostics 26
Table 3.1: Global Market for Molecular Diagnostics Cancer Testing, 2008-2012 27
Table 3.2: Global Market for Molecular Diagnostics Testing, 2008-2012 27
Table 3.3: U.S. Market for Molecular Diagnostics Testing, 2004-2012 28
Table 3.4: Key Players and Market Share in Molecular Diagnostics Testing Market
28
Table 3.5: Business Factors Influencing Advanced Oncology Testing Services 29
Table 3.6: Specific Diagnostic Products Categories Comprising the Cancer
Diagnostic Market 31
Table 3.7: In Vitro Cancer Marker Market Segments Worldwide, 2001 and 2007 31
Table 3.8: Tumor Markers Currently in Common Use 34
Table 3.9: Global IVD Cancer Tumor Marker Testing Market Segments Growth Rates
35
Table 3.10: Worldwide Market Size in Dollar Volume for Tumor Marker Assays
Product Market, 2001-2010 35
Table 3.11: U.S. Market Size in Dollar Volume for Tumor Marker Assays Product
Market, 2001-2010 36
Table 3.12: Worldwide In Vitro Cancer Tumor Marker Diagnostics Market Size,
2001-2010 36
Table 3.13: U.S. In Vitro Cancer Tumor Marker Diagnostics Market Size, 2001-2010
37
Table 3.14: Japanese In Vitro Cancer Tumor Marker Diagnostics Market Size,
2001-2010 37
Table 3.15: European In Vitro Cancer Tumor Marker Diagnostics Market Size,
2001-2010 37
Table 3.16: Global Distribution of IVD Cancer Tumor Marker Diagnostic Testing 38
Table 3.17: Market Share of Major Competitors in U.S. Cancer Tumor Marker
Diagnostics Market 38
Table 3.18: Major Presence in Cancer Tumor Marker Diagnostics Markets 38
Table 3.19: Leading Segments of the Molecular Diagnostic Testing Market 39
Table 3.20: Highlights of the Cancer Diagnostic Testing Segment 39
Table 3.21: Highlights of Certified Clinical Labs Specializing in Cancer
Genetics and Molecular Diagnostic Services 39
Table 3.22: Strategies for Marketing Cancer Diagnostic Products 44
Table 3.23: Key Elements of MD Diagnostic Companies Marketing Plan 44
Table 4.1: Estimates for the Leading Sites of New Cancer Cases and Deaths in the
U.S. by Gender 47
Table 4.2: Key Elements for Business Competition in Gene Expression Profiling
for Cancer 52
Table 4.3: Key Elements for Future Success in the Gene Profiling for Cancer
Segment 52
Table 4.4: Breast Cancer Overview 53
Table 4.5: Overview of ER/PR Testing and Response to Therapy 54
Table 4.6: Players in the Breast Cancer Molecular Diagnostic Space 55
Table 4.7: Clinical Utility and Health Economic Benefits of Oncotype DX 57
Table 4.8: Overview of HER2/neu and Herceptin 60
Table 4.9: MammaPrint: Key Features 64
Table 4.10: Siemens Oncogene Science Biomarker Group Reagents 65
Table 4.11: Colorectal Cancer Overview 66
Table 4.12: TNM Staging System for Colorectal Cancer 68
Table 4.13: Players in the Colorectal Cancer Molecular Diagnostic Space 68
Table 4.14: ArcticDx Genetic Test, Colo Risk 72
Table 4.15: Product Development Opportunities in Cancer Tumor Types 78
Table 4.16: Players in the Prostate Cancer Molecular Diagnostic Space 79
Table 4.17: Players in the Bladder Cancer Molecular Diagnostic Space 83
Table 4.18: Lung Cancer Survival Rates 85
Table 4.19: Lung Cancer Facts 86
Table 4.20: Potential of Cancer Biomarkers in Drug Delivery and Development 92
Table 4.21: Barriers to Adoption of Biomarkers in Clinical Use 92
Table 5.1: Technology Trends in Cancer Testing 93
Table 5.2: Trends in Theranostics 93
Table 5.3: Market Trends in Cancer Testing 94
Table 5.4: Molecular Diagnostics Cancer Market: Market Drivers Ranked in Order
of Impact 94
Table 5.5: Molecular Diagnostics Cancer Market: Market Restraints Ranked in
Order of Impact 95
Table 5.6: Companies That Offer Products to Profile Gene Expression in Breast
Cancer 99
Table 5.7: Principal Competitive Factors in the Cancer Screening Market 99
Table 5.8: Molecular Diagnostics Cancer Market: Strategic Recommendations on
Molecular Diagnostic Sector Business Functions 100
Table 5.9: Total Molecular Diagnostics Cancer Market: Impact of Top Industry
Challenges (U.S.) 100
Table 5.10: Utility of Biomarkers as Companion Diagnostics to Drug Development
117
Table 6.1: CPT Codes for Tumor Markers 122
Table 6.2: Genomic Health Oncotype DX Sales 124
Table 6.3: Drivers in KRAS Testing 127
Table 6.4: Factors Determining Third Party Payment for Advanced Cancer Tests 129
Table 7.1: Rules that Affect the Ability of a Cancer Diagnostic Service Lab to
Conduct Business 133
Table 7.2: Focus Areas for the FDA Critical Path Initiative 139
Table A1: Tumor Markers Currently in Common Use 165
