Personalized Medicine May Lead to More Mergers

The number of alliances between diagnostics companies and pharmaceutical companies is set to rise because of the growth of personalized medicine, according to a report from PricewaterhouseCoopers.

The number of alliances between diagnostics companies and pharmaceutical companies is set to rise because of the growth of personalized medicine, according to a report from PricewaterhouseCoopers (PwC).

"We expect alliances with the pharmaceutical industry to increase in the next 2–5 years, but this will be driven by factors including the pricing of diagnostics, the extent of reimbursement coverage and the burden of any clinical validation work required for market access," said PwC Director Loïc Kubitza in a statement about the report.

The report, Diagnostics 2009: Moving Towards Personalized Medicine, claims that the drive toward personalized medicine influenced three of the 10 largest merger and acquisition deals in 2008. In addition, four of the licensing deals by the 10 largest in vitro diagnostics companies were motivated by personalized medicine. The PwC statement also highlighted the recent deal between GlaxoSmithKline (London) and Enigma (Salisbury, UK), a UK-based diagnostics group, to develop a test that quickly diagnoses specific strains of influenza as evidence of the trend for personalized medicine.

According to PwC, the drive toward personalized medicine is caused by several factors, including regulatory agencies that are introducing requirements to test for certain biomarkers before prescribing certain drugs. More people may also now undergo genetic testing because of legislation introduced in the US and Europe last year that protects individuals from genetic discrimination.

"Pharmaceutical companies understand the contribution of biomarkers and diagnostics in improving the design and probability of success of clinical trials," said Simon Friend, global pharmaceuticals and life sciences industry leader at PwC, also explaining that greater emphasis is now being placed on a companion biomarker test when deciding on a drug's reimbursement. He added: "These factors will combine to accelerate the development of new diagnostics for personalized medicine. Together we anticipate that alliances and collaboration will be inevitable as the market need expands."

Stephanie Sutton is an assistant editor at Pharmaceutical Technology Europe.