Feb. 7 (Bloomberg) -- Siemens AG, Europe’s largest engineering company, is wading into the multibillion-dollar field of personalized medicine by announcing deals to develop companion tests with two drugmakers.
The Munich-based company will work with HIV drugmaker ViiV Healthcare Ltd. and Tocagen Inc., a developer of an experimental brain tumor treatment, to create tests that will determine which patients will benefit from the therapies, said Trevor Hawkins, head of Siemens’ next generation diagnostics division.
“This is a major step forward for us, moving into this multibillion market, which we haven’t been in up until today,” Hawkins said in an interview. “We have every expectation to now growth this much further beyond where we are.”
Personalized medicine involves determining whether a patient is genetically susceptible to a particular disease or would be especially responsive to certain treatments. These new therapies often require special genetic tests, which are being created by separate companies, in some cases.
Siemens, which makes products ranging from light bulbs to high-speed trains, is under increased pressure to keep up with competitors such as Basel, Switzerland-based Roche AG, which is attempting a hostile takeover of gene-mapping company Illumina Inc., Ben Uglow, an analyst at Morgan Stanley, wrote in a note to clients last month.
The market for molecular diagnostics, which includes personalized medicine tests, will more than double in the U.S. to $5.5 billion in 2016 from its $2.5 billion size in 2010, according to TriMarkPublications.com.
ViiV, a venture between London-based GlaxoSmithKline Plc and New York-based Pfizer Inc., the world’s biggest drugmaker, has an HIV drug called Selzentry that works with patients that have a specific form of the virus. Siemens will develop a test to help doctors determine which patients would benefit from the therapy.
Tocagen, based in San Diego, is working on a treatment for glioma, or brain cancer, called Toca 511 that’s in early human trials. Working with Siemens will give the company more credibility in discussions with the Food and Drug Administration and a quicker approach in marketing if approved, said Harry Gruber, chief executive officer of closely held Tocagen.
“We realized you really have to have a company that could commercialize as part of your team during the registration studies,” Gruber said in an interview. “We went through a very formal process to interview all the major players in the companion diagnostics space, and from the very beginning, this is the team we jelled with.”
No financial details of the agreements were disclosed.
Siemens, Roche and Abbott Laboratories are seeking to form partnerships with drugmakers to develop these companion tests, said David Parker, vice president of the consulting firm Boston Healthcare.
“The test makers are all out there talking with potential pharma partners,” Parker, based in Washington, said in an interview. “I think we’re going to see nothing but an increase in the frequency in which drugs and diagnostics come to market.”
The pace of such approvals has accelerated, said Gwen Gordon, a spokeswoman for the Personalized Medicine Coalition, an industry advocacy group based in Washington. More than 72 such therapies are available today, a fivefold increase from the 13 available in 2006.
“In the past, it had been a much more difficult process to get the drug and the diagnostic approved, because there’s different people at the FDA that work on each set of products,” Gordon said. Now, the groups are coordinating more as drugmakers recognize the market’s potential. “They recognized that there is a market for tailored therapies for patients that know that the drug is going to work.”
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