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DeciBio was at NextGenDx summit earlier this month where partner David Cavanaugh hosted a panel to help emerging technologies understand the path into the clinic. Our panelists came from Luminex, NanoString, and Thermo Fisher, all companies with experience moving into clinical diagnostics from a research tools position. If you weren’t at the conference or missed our session, we’ve compiled the highlights below.
Making the jump from research to the clinic is an inherently risky move. Most, if not all, of the advice from the panel and outlined below focused on minimizing and mitigating those risks, and aligns with our recent blog post on qualitative evaluation of novel technologies.
One advantage that research use only products have over in vitro diagnostics is the ability to iterate quickly. Listen to customer feedback from your initial launches and take advantage of the fact that you can make product improvements without having to resubmit for regulatory clearance with each adjustment.
Clinical customers have very different criteria for adoption than researchers. Skill requirements and workflow considerations play a bigger role, and there are often multiple parties involved in the evaluation and purchasing process. On top of that, high switching costs associated with redesigning lab workflows may lead customers to require a full order of magnitude of improvement in some area over existing tests and instruments before considering adopting a new product.
While it’s certainly easier from a regulatory perspective to provide your test as a service, in most cases the best way to serve the market (and more importantly, serve patients) is to have a distributed instrument that sits in the hospital.
Dabbling with bets all over the table could easily get you wiped out. Clinical customers don’t have the time to experiment with a new platform to really figure out its full capabilities, so the use-case needs to be explicit and compelling. Pick one application where your product has the strongest value proposition and focus on that initially; you can expand to additional applications after establishing the clinical utility of your product.
Your solution might win today, but are you still going to have a differentiated value proposition in 5 years when you launch into the clinical space? Competitors can see the same market trends that you can and will be responding similarly. Build your product for where the market will be, not for where it is currently.
Linking your diagnostic to a specific therapy is an easy way to demonstrate clinical value, but realize also that the market size may also be limited. After taking into account the specific indication, disease stage, existing diagnostic work-up recommendations, sample availability, and physician preferences, the target population for a companion diagnostic may be only a small fraction of the patient population. If you think the CDx approach still makes sense for your offering, taking a panel approach or designing diagnostics that work across multiple disease areas are ways to overcome, provided it doesn’t spread your initial focus too thin.
If you decide to go the pharmaceutical partnership route (as opposed to acquiring a technology or launching independently), here are a few additional things to keep in mind.
Everybody focuses on making sure the performance of the test is solid, which is of course crucial. However, potential partners are going to want to see that everything else is firing on all cylinders, too. If it seems unlikely that your manufacturing and distribution will be able to scale, for instance, it’s unlikely you’ll get significant interest from potential partners.
IVD and therapeutics companies have different business models. Pharma partners can overlook or de-emphasize components that are quite important to clinical diagnostics customers, which can harm the commercial viability of the end product. Start with a clear definition of each party’s desired outcomes and encourage open communication from the inception to avoid making false assumptions about the other’s intents, goals, and methods.
Pharma is hesitant to partner with those who don’t have any experience in IVD and don’t have a clear path to regulatory approval. Getting 510(k) clearance early and starting from day one to collect the necessary clinical data for regulatory filings will help assuage any hesitancy related to your IVD capabilities.
Vice President of Marketing, NanoString
Sr. Director of Oncology Product Management, Clinical NGS Division, Thermo Fisher Scientific
Sr. Director, Global Strategic Marketing, Luminex Corporation
David Cavanaugh is a Partner at DeciBio Consulting and the practice lead for clinical diagnostics. He has 12+ years experience assisting clients with opportunity identification, franchise expansion, growth strategy development, and new product developments. Connect with David on LinkedIn or contact him via email.