Promising technologies and a lot of buzz, but it’s still early

The liquid biopsy field is crowded, with more than 60 companies competing for what we expect to be only a dozen winning spots. We have synthesized primary stakeholder interviews with findings from our competitive intelligence tool and discovery portal to highlight some key takeaways regarding developments and trends within the space.

It’s still early

Current use is primarily limited to advanced, metastatic patients who cannot undergo a tissue biopsy, metastatic patients for whom liquid biopsies may provide a more comprehensive picture than sampling any specific tumor, and resistance testing following detected progression. Our primary and secondary research indicates that liquid biopsies are currently used in ~5% of patients, with the bulk of this activity driven by clinical trials (contact us if you want a digital copy of our AGBT 2018 poster covering the liquid biopsy landscape). Limited reimbursement and inclusion in guidelines are key moderators of clinical adoption, and discrepant results between assays may also raise concerns, but these will no doubt be addressed over time as the field continues to generate clinical utility data. Nonetheless, we expect that tissue biopsies and CT scans will remain preferred techniques in the mid-term, with liquid biopsies expanding, rather than converting, the NGS tissue testing market by addressing unmet needs in niche applications.

Testing volumes are expected to increase significantly within the U.S., and more modestly elsewhere

Our primary research indicates that volumes could increase as much as 5-fold over the next 3 years at leading centers within the U.S. Additionally, non-academic hospitals, which have seen low penetration to-date, are gradually gaining interest in utilizing liquid biopsy tests given the relatively simple sample collection requirements. However, we expect utilization in other geographies to be more limited in the mid-term, and adoption to lag behind that of the U.S. (1-2 years for Europe, and 2+ years for Asia). Adoption in these geographies will be in large part moderated by nationalized healthcare systems waiting to see clear demonstrated utility but can also be hindered by conservative views around genetic testing (e.g., in Japan).

Lung cancer dominates while adoption for other cancer types lag

With regard to volumes by cancer types, lung currently dominates, with several factors contributing: 1) Molecular testing is more broadly accepted and recommended within lung cancer, with greater availability of targeted therapies (e.g., Tarceva, Tagrisso); 2) Guidelines recommend using liquid as a replacement for solid tissue biopsy to detect EGFR T790M mutations following progression; 3) Higher risks are associated with biopsying lung carcinomas. In contrast, testing of other cancer types lags due to fewer druggable mutations and typically greater accessibility of tissue.

Therapy selection and monitoring are the key current applications; early detection / screening is a long way off

So far, liquid biopsy has addressed major unmet needs in therapy selection and monitoring, such as when insufficient tissue can be obtained, and there is a lot of hype around expanding applications. However, we expect that early detection will not see broad clinical adoption for at least another decade, given the challenges associated with current technologies and biological variances and need for demonstrated clinical utility or cost-benefit for payors. Nonetheless, many entities are pursuing this space; notable mentions to-date include:

• GRAIL – GRAIL intends to launch their nasopharyngeal carcinoma (NPC) screen in Hong Kong this year. Arguably, GRAIL aimed for a low-hanging fruit with its NPC screening assay, which is based on Cirina’s technology, in that it detects not genomic but Epstein-Barr virus (EBV) DNA— EBV is a relatively well-studied oncovirus, and this development does not indicate progress using GRAIL’s core technology, which uses ultra-broad and ultra-deep sequencing of genomic DNA, nor does the technology prove applicable to other cancer types or to a broader population. Nonetheless, we expect it to have a clearly-defined use case and economic argument given the high incidence rate of NPC in southern China and relatively low cost of the test (we expect ~$30, much lower than for alternative detection methods).
• CancerSEEK – This assay developed by researchers at Johns Hopkins combines information from both cfDNA and protein biomarkers in detecting and locating certain cancers and is expected to be a low-cost assay (<$500), which is more likely to see acceptance by payors compared to other commercial sequencing assays. Results published early last month suggest more research is needed, particularly to achieve greater accuracy in multiple cancer types and outside of controlled research environments, but we believe the work to-date marks a significant milestone in this space

Uncertain or limited reimbursement gates adoption

U.S. companies have been working hard with payors and insurance companies to get paid for tests they run. Guardant Health, one of the earliest companies in the field, launched its first liquid biopsy test, Guardant360, in 2014. It wasn’t until 2 years later that the test was covered by a health plan. Since then other payors, such as Palmetto and Noridian, have followed suit, but coverage is generally conditional or assessed on a case-by-case basis. Coverage conditions may include status of stage 3-4 NSCLC at diagnosis, infeasibility of obtaining tissue for genomic profiling, progression when patients have not already been tested for key genes (e.g., EGFR, ALK, ROS1) and tissue profiling is infeasible, or progression on TKI’s. PAMA 2018 payment rates, which call for reimbursement of large (>50 genes) solid tumor NGS panels to the tune of $3,000, have fostered some optimism around increased use of more comprehensive panels. Such high reimbursement would make the business case feasible, but we expect improvements in liquid biopsy reimbursement to lag several years behind that of tissue.

LDT’s are dominant but key players are pushing for FDA approval given reimbursement uncertainty

While the national draft determination for NGS for Medicare beneficiaries took a hard stance on non-FDA approved testing, the public pushback has been significant. Hundreds of submitted comments echo similar sentiments around a need for LDT options where novel test targets and or approaches can be incorporated into tests, a key to maintaining pace of the rapidly advancing field. However, within multiple geographies, we expect that regulatory approval will offer companies a reimbursement edge, and companies have taken actions accordingly. Both Roche and AmoyDx have FDA and cFDA approval respectively for PCR-based EGFR assays. Last week, Guardant’s 360 assay received expedited access pathway designation from the FDA. NantHealth is expected to seek FDA clearance for its two new liquid biopsy offerings this fall. In the EU, particularly France and Germany, LDTs are and expect to remain dominant for the next 3+ years due to high price sensitivity. Notable efforts for testing consolidation and cost containment include France’s well-equipped 28 molecular genetics platforms and Germany’s lack of regulation around LDTs. We also expect that nationalized healthcare systems in general to favor liquid biopsies as cheaper LDT’s that are limited to actionable genes.

Massive investment activity is driving rapid advancements in the field, but most competitors won’t survive

Based on analysis as part of our competitive intelligence tool, more than $5B has been invested in the field across more than 60 companies to-date. Companies that have received the most funding to-date include GRAIL, Guardant Health, Adaptive Biotechnologies, and Biocartis. Despite excitement and investment in this space, we believe that there are only volumes to support a dozen companies and a market shakedown is looming. Adoption to-date has indicated that strong marketing tactics are highly effective during the initial land-grab phase and customers have demonstrated strong resistance to switching. However, the question of which companies will remain successful in the long term is yet to be determined.

For a more comprehensive overview of the field, download our liquid biopsy white paper and a sample of our competitive intelligence tool that tracks companies in the field.

Authors

Susan Zhou

Susan is a Senior Analyst at DeciBio with experience in variety of consulting engagements within the molecular diagnostics industry, including market sizing, opportunity assessment, and go-to-market strategy. Susan is passionate about supporting innovative diagnostic technologies.

Mika Wang

Mika is DeciBio’s Director of Special Projects and Operations. She is passionate about leveraging data to generate insights and scale workflows to have significant impact and works on identifying and developing novel use cases for data products.

Miguel Edwards

Miguel is a Project Leader at DeciBio and specializes in identifying industry trends in the life science research tools and clinical diagnostics spaces. He has evaluated the market opportunity for several emerging research tools and diagnostic technologies, characterizing market dynamics to provide strategic insights for companies in these spaces.Disclaimer: Companies listed above may be DeciBio clients and/or customers