SUZHOU, China – A recent deal reflects the trend toward personalized medicine and companion diagnostics in China.

The first commercial personalized medicine provider in China, Hangzhou-headquartered Denovo Biopharma, recently disclosed that its San Diego subsidiary had acquired late-stage oncology drug enzastaurin from pharmaceutical multinational Eli Lilly and Co.

Denovo acquired all the rights of enzastaurin for the development, manufacture and commercialization of the drug. The amount of deal was not disclosed, but Denovo's chief scientific officer, Luo Wen, said the price was "low."

Lilly had held high hopes for the drug after promising phase II trials, but it failed to meet primary endpoints in phase III studies. Despite the disappointing overall results, a subset of patients did show significantly survival rates after using enzastaurin.

Denovo now plans to carry out follow-on trials in targeted patient groups by conducting genetic analyses to identify biomarkers that correlate with patients' responsiveness to the drug. In a unique approach for China, the company plans to register the drug at the same time as a diagnostic device that will make it possible to identify patients with the right biomarkers to benefit from enzastaurin.

That innovative combination of drugs and medical devices that make it possible to personalize health care to the individual patients that can most benefit from them may open up new opportunities for device and drug companies in China.

"Diagnostic is the first step to see if the drug is suitable for patients," Luo told BioWorld Today during the Device China 2014 conference held in Suzhou. "We have to register the drug and the diagnostic device at the same time."

The rise of personalized medicine and personalized diagnostics is visible across the industry. An example is the growth of Shenzhen-based BGI, the largest genomics organization in the world, and its effort to map genetic markets in everything from viruses to pigs to millions of people. BGI has been developing a series of devices that can speed up genetic sequencing. Using its PCR+Seq technology the company sequenced the SARS virus in 36 hours and E. coli in just two days. But the technology is not widely available.

The problem, said BGI Chairman Wang Jian, is developing a device.

"China's medical industry today is totally held hostage by physics and chemistry and increasingly apart from the origination of life," Wang said during the Device China 2014 conference.

"It is our genes that decide our life," Wang said. "We usually ignore such processes, from DNA to RNA to protein to small molecules to cell, when we develop a new drug or device. . . . These are the real 'big data' of life.

"We used to treat it as scientific instrument. Now we realize it should be a medical device. And it is a brand new medical device area," Wang added.

The CFDA approved genetic sequencing products for the first time in July. BGI was the only company with such a product, but more genetic sequencing devices are expected to enter the market going forward.

DRUGS, DEVICES 'INEXTRICABLY BOUND TOGETHER'

BGI now is in discussions with the Bill & Melinda Gates Foundation to establish a large-scale human health database. Apart from that, there are several programs BGI is working on this year, including efforts to map and control birth defects and oncology genetic sequencing. Such databases would provide a fount of big data for disease control.

The combination of drug and devices could open up new pathways for health care.

Nick Zhang, general manager of Qiagen Suzhou Translational Medicine, said the need for medicine today is "to maximize the efficacy and minimize the toxicity" even as many patients find that some traditional drugs don't work for them.

Medical innovation means drug and device developers and scientists could work seamlessly and design a structure that could greatly improve efficiency of the entire health care chain. That will push the development of personalized drug delivery, said Song Ruilin, executive president at the China Pharmaceutical Industry Research and Development Association (Sino-PhIRDA).

He said he believes the pharmaceutical and device industries are inextricably bound together and will become increasingly integrated as internet-based technologies evolve.

The biggest challenges now are not technological but rather financial, regulatory and talent challenges.

On the financing front, Kevin Chen, a partner at Sequoia Capital, said investors may not like the idea of personalized diagnostics. "Consumers will like personalized products, but investors will prefer more standardized technologies. The question is how to combine the advantages of both. Then regulatory innovation will be needed," Chen said.

BGI's Wang said his company is struggling between innovation and regulation.

The new diagnostic concept means the industry needs "compound" talent that understands both science and medicine, said Huang Shiang, founder and CEO of Kindstar Global. Kindstar is the first and largest esoteric clinical laboratory conglomerate in China with three facilities in Beijing, Shanghai and Wuhan, serving more than 3,300 hospitals in China.

An innovative environment requires education and development, IP protection, incentives, marketing and reimbursement systems, pricing and involvement of venture capital, said Sino-PhIRDA's Ruilin. Many of those elements are, for the time being, missing, but all are growing.

Zhao Yixin, president of the China Association of Medical Device Industry, identified capsule endoscopy, drug delivery system, molecular diagnostics and targeted treatment as well as mobile health care as promising areas for growth in medical technology.