SAN DIEGO – Despite the imminent arrival of the $1,000 genome, several technical and business hurdles must be overcome to move personalized medicine into the mainstream, according to two recent panels hosted by the San Diego Venture Group and Southern California life sciences industry organization BIOCOM.

David Nelson, president and CEO of companion diagnostics firm Epic Sciences Inc., noted that the drug industry inhabits "a world of technical risk," with nine out of 10 drugs failing to reach the market. Personalized medicine will reduce that risk dramatically, he said, pointing to how a companion diagnostic helped Pfizer Inc.'s targeted lung cancer drug Xalkori (crizotinib) advance through the clinic quickly, with replicable data and no surprises as the patient pool expanded.

Indeed, after a decade-long slump that threw the utility of the Human Genome Project into question, personalized medicine is gaining momentum. Melanoma drug Zelboraf (vemurafenib, Daiichi Sankyo Co. Ltd. and Roche AG) won FDA approval with a companion diagnostic. Biogen Idec Inc. and Elan Corp. plc used an anti-JCV antibody diagnostic to salvage the potential of multiple sclerosis drug Tysabri (natalizumab). And Thursday Seattle Genetics Inc. signed a companion diagnostic deal designed to help lymphoma drug Adcetris (brentuximab vedotin) expand into new indications. (See BioWorld Insight, Jan. 30, 2012.)

"They're not walking to us; they're running," Nelson said, noting that Epic had its first meeting with one major pharmaceutical company in January, closed the deal in March and is already collecting clinical trial samples.

But personalized medicine still faces technical hurdles. Agilent Technologies Inc.'s chief technology officer, Darlene Solomon, called for improvements in sample preparation on the front end, but she noted the back-end analysis – i.e. interpreting the massive amount of data generated and translating it into something actionable for physicians – is what will really "change the game."

High-tech firms are well aware of the opportunity. The New York Times reported last week that Google Ventures is building up its internal data sciences team, which specializes in amassing and utilizing large volumes of information, and one Google executive told the Times they "keep coming back to life sciences" as an investment field.

But there are technical hurdles on the biology side as well. Solomon pointed to the need to take a "more holistic view of diagnosis and treatment," focusing on pathways rather than just mutations, as some patients lacking a specific mutation may still respond to a drug targeting that mutation.

Nelson added that in fields like oncology where a specific mutation is driving an acute disease, personalized medicine is leading to actionable decisions right now. But "where it gets murky" is in the value of whole-genome sequencing, and in the validation of biomarkers for complex diseases like cardiovascular disease and Alzheimer's disease, he said.

Ashley Van Zeeland, director of strategic partnerships at the Scripps Translational Science Institute, called whole-genome sequencing "coffee table fodder" unless a patient has a rare condition that has led them on a diagnostic odyssey.

One person who has been on such a diagnostic odyssey is Joe Beery, senior vice president and chief information officer at Life Technologies Corp. Beery and his wife told the San Diego Venture Group about the severe health problems of their twins, who were wrongly diagnosed with cerebral palsy. Whole-genome sequencing revealed a treatable genetic disorder, and while the family was shopping for wheelchairs when the kids were just 5 years old, they're now attending track meets and other sporting events for their active, healthy teenagers.

But while personalized medicine is clearly affecting patients' lives here and now, the experts agree it is still far from mainstream. And "the real challenge is not technical – it's business risk," Nelson said.

While targeted drugs cost hundreds of thousands of dollars, their companion diagnostics might cost $100 to $150, Nelson explained. "So how do you incentivize a diagnostics company to make a test?"

Solomon added that the diagnostics firm might be investing its time and money into a test for a drug that never makes it to market. "We need the right business model with shared risk and reward," she said.

An additional complication is that while Zelboraf and Xalkori both involve tests for single mutations, many companion diagnostics will be far more complex, incorporating in vitro blood or tissue tests to identify patients or monitor the uptake of a drug, as well as in vivo imaging such as positron emission tomography or magnetic resonance imaging, and possibly bioinformatics. Such complexity creates a cost hurdle for smaller biotechs.

Fortunately, both diagnostics firms and drugmakers seem willing to entertain creative solutions. Abbott Molecular, GE Healthcare and Siemens Healthcare Diagnostics all told BioWorld Insight they're open to cost and risk-sharing partnerships rather than fee-for-service arrangements. (See BioWorld Insight, Feb. 21, 2012.)