Contents:

Chapter 1: Executive Summary Chapter 2: Introduction Personalized Medicine Perceived Issues Spear’s Seven Pharmacogenomic Myths Commentary on the 7 Myths Myth 1—PGx will Create Niche Markets Myth 2—PGx Will Cut the Cost of Drug Development Myth 3—Personalized Medicine is Limited by Technology Myth 4—Co-development of Drugs and Diagnostics Myth 5—Genes Determine Drug Response Myth 6—PGx will Identify Drugs with Rare Side Effects Myth 7—PGx will be Driven by Regulatory Issues Excerpts from FDA Genomic Data Submission Guidance Test Requirements Pharmaceutical and Diagnostic Co-Development Process References Chapter 3: Intellectual Property Guide Creating a Path for Success: Intellectual Property and Other Legal Issues Associated With DxRx Collaborations Licensing Issues for Genetic Markers of Disease and Drug Responsiveness Kenneth Sonnenfeld, Partner, Morgan & Finnegan, LLP, New York, NY Dysautonomia Foundation Sublicensing Issues Examples of Patent Pools Legislation Regarding Gene Patents Developing Products for Personalized Medicine: Application of the NIH Research Tools Policy What is the NIH Research Tools Policy? The Four Principles Conclusions for Personalized Medicine Product Development The “Research Tool” Website References Chapter 4: Regulatory FDA Perspectives on Pharmacogenetic Testing Basic Definitions: Pharmacogenomic Test versus Pharmacogenetics Pharma “OMICS” and Regulatory Issues “Multiplex” and Regulatory Issues New Indications—Familiar Questions General versus Drug Specific Pharmacogenetic Tests What Regulatory Pathway is Appropriate for YOUR Pharmacogenetic Test? Pharmacogenetic Tests in Drug Labels Making the Tests Available Depending on the Option What are the Options ASR Definition FDA Guidance Publications FDA Guidance Publications in Development Device Advice Tm Bioscience Cystic Fibrosis (CF) Gene Screening and Diagnostic . Regulatory Example Clinical Validation Non-comprehensive Overview of Analytic and Clinical Parameters for Validation of Companion Diagnostics Cyclin D1 Assay Validation—Hypothetical Common Disease Scenario Cyclin D1 Assay Validation Considerations Diffuse Large B-cell lymphoma (DLBCL) [Form of non-Hodgkin’s Lymphoma]—. Less Common Disease Scenario Molecular Validation Overview CYP2D6 Gene Testing UGT1A Companion Diagnostic UGT1A Testing Chapter 5: Contract Research Organizations (CROs Use of Contract Research Organizations (CROs) for Diagnostic Development Interview with Richard N. Phillips, MSPH, Ph.D., Principal Consultant, Quintiles Consulting, Medical Device Development Client Questionnaire—MDCI®, Medical Device Consultants, Inc., North Attleboro, Massachusetts MDCI Client Questionnaire: Clinical Study Specifications Ten Mistakes to Avoid When Bringing a Medical Device to Market in the U.S Follow-up Interview with Bill Morton, President, MDCI®—Diagnostic Commercialization Nine Mistakes to Avoid When Bringing a Medical Device to Market in EUROPE Follow-up Interview with Bill Morton, President, MDCI®—CE European Commercialization Chapter 6: Reimbursement CMS Reimbursement Private Payer Issues Local Medicare Coverage Follow-up interview with David Sholehvar, Director, Strategic Customers for Veridex BRCA1/2 Chromosomal Banding (Cytogenetics) Secretary’s Advisory Committee on Genetics, Health, and Society (SACGHS) Case Study: Genomic Health’s OncoDX™ Breast Cancer Assay: Assess Risk, Determine Therapy Benefit, and Maximize Resource Utilization by Ted Snelgrove, Vice President of Marketing Multigene Assay to Predict Recurrence of Tamoxifen-Treated, Node-Negative Breast Cancer Oncotype DX™ in Clinical Practice Oncotype DX™ Prediction of Chemotherapy Benefit Oncotype DX™ Health Economics Benefit Analysis Health System Impact for Reclassification: “Back of the Envelope” Analysis Genomic Health Breast Cancer Calculator Conclusions from Economic Analysis Payer Reactions Chapter 7: Business Models and Issues Introduction Market Incentives and the Business Model for Linked Dx/Rx Products A General Added Value Scenario Value Creation Due to Reduction in Uncertainty, (Exhibit 7.1) Societal Cost-Effectiveness Scenario Analysis—Who Captures the Value? Current Pricing and Reimbursement Environments Public Policy Implications Follow-up Interview with Louis P. Garrison Case-based Reasoning® Business Model Companion Diagnostic Commercialization Issues Companion Diagnostic Development Checklist Sales & Marketing Expectations Appendix 1: 510(k) Substantive Equivalence Determination Decision Summary Appendix 2: Evaluation of Automatic Class III Designation Tag-It™ Cystic Fibrosis Kit Appendix 3: AmpliChip CYP450 Test for CYP2C19 510(k) Summary Appendix 4: Invader® UGT1A1 Molecular Assay 510(k) Summary Table of Exhibits Exhibit 2.1 Major Players in the Pharma Industry Exhibit 2.2 Examples of Pharmacogenetics and the “Omics” in the Drug Development Process Exhibit 2.3 Erectile Dysfunction—2004 Exhibit 2.4 Historical Comparison of Consumption to Modern Diseases Exhibit 2.5 Top 10 Anti-hypertensive Drugs—2004 Exhibit 2.6 Typical Drug Timeline Exhibit 2.7 Size of the Genetics Effect versus Percentage Responder Genotypes . and Possible Results Exhibit 2.8 FDA-approved Molecular Diagnostic Test Systems Exhibit 2.9 Capella University Poll Exhibit 2.10 Effect of CPY2C9 Genotype on Warfarin Response Exhibit 2.11 ALOX-5 Genotype and 5-lipoxygenase Inhibitor Response Exhibit 2.12 ALOX-5 Genotype and 5-lipoxygenase Inhibitor Response Exhibit 2.13 Drug Toxicity and Frequency of Genetic Mutation Exhibit 2.14 VIGOR Study Exhibit 2.15 Study Name versus Test Necessity Exhibit 2.16 Drug-Test Co-development Process Exhibit 2.17 Companion Co-Development Process Outline Exhibit 3.1 Intellectual Property and Other Legal Issues Associated With Dx/Rx Collaborations Source Exhibit 3.2 Contract Licensing Negotiations Drug versus Diagnostic Exhibit 3.3 Familial Dysautonomia Foundation versus MGH Organization Missions Exhibit 3.4 Patent Pooling Advantages and Disadvantages Exhibit 3.5 Examples of NIH Research Tools Exhibit 3.6 Internal, Commercial, and Research Product License Comparison Exhibit 3.7 Research Tools Exhibit 3.8 The Research Tool Website Exhibit 4.1 Analytic Phase Validation Parameters Exhibit 6.1 Fragile X PCR Exhibit 6.2 Immunoglobulin Gene Rearrangement PCR Exhibit 6.3 Factor V Leiden PCR Exhibit 6.4 January 2006 Clinical Laboratory Diagnostic Fee Schedule Exhibit 6.5 Medicare Parts A and B—Contractors Exhibit 6.6 Local Medicare Coverage Process Exhibit 6.7 Veridex’s CellSearch® Local Medicare Coverage Process Exhibit 6.8 BRCA1/2 Local Medicare Coverage Process Exhibit 6.9 Chromosomal Banding (Cytogenetics) Local Medicare Coverage Process Exhibit 6.10 Economic Rationale For Genomic Technologies and Symptomatic Care Exhibit 6.11 Economic Rationale For Genomic Technologies and Asymptomatic Care Exhibit 6.12 Economic Impact of Breast Cancer Testing Exhibit 6.13 General Schema for Health Economics: Rate of Adoption Exhibit 6.14 Risk of Recurrent versus Chemotherapy Exhibit 6.15 Sample of Risk/Benefit Information from Adjuvant Program Exhibit 6.16 Oncotype DX™: 21 Final Gene Set Exhibit 6.17 Oncotype DX™: >2600 Patients Studied Exhibit 7.1 Total Societal Value Creation Including Reduced Uncertainty. Exhibit 7.2 Scenario I: Value Distribution ($): New Dx—No Tx Flexible Pricing; Dx Administered Pricing Exhibit 7.3 Scenario II: Value Distribution ($): New Dx—Some Tx Price Flexibility, Insurer Budget Constrained; Dx Administered Pricing Exhibit 7.4 Scenario III: Value Distribution ($): New Dx—No Tx Price Flexibility, Dx Some Price Flexibility, and IP Protection Exhibit 7.5 Scenario IV: Value Distribution ($): New Dx—Tx Can Raise Price, Dx Charged at Cost, Insurer Raises Premium Exhibit 7.6 Scenario V: Value Distribution ($): New Dx—Tx Pricing Flexible (value-based), Dx Pricing Flexible (value-based), Insurance Competitive Exhibit 7.7 Commercialization Timeframe Exhibit 7.8 Example of Commercialization Costs—Spending Cost of Goods versus Accumulated Deficit (in $ millions)

Summary:

Five years after the completion of the Human Genome Sequencing Project, the personalized nutrition and medicine fields are evolving with an emphasis on identifying and applying biomarkers to aid disease diagnosis. Specifically, clinical pharmacogenomics, theranostics, and nutrigenomics are examples of areas where diagnostics have entered the arena and are being used in conjunction with drug treatments and nutrition recommendations. The wave of emerging companion diagnostics is expected to continue to develop during the next 10–15 years. Genzyme is a company positioned to provide in pharmaceuticals, diagnostics manufacturing, and a diagnostic service, as the molecular diagnostics market grows. This market is estimated to be $7-8 billion in 2006. Molecular diagnostics are projected to grow to $12 billion in 2010 and continue growth to $35 billion by 2015. This guide to the regulatory and business landscape of companion drug and diagnostics expands upon topics presented at IBC’s 4th Annual Molecular Diagnostics and Personalized Medicine Conference in Boston, September 2005. The fragmented diagnostics industry consists of test manufacturers, test developers, and service providers. This Guide offers a compilation of regulatory and business information that serves as a bridge for anyone wanting an introduction to this industry. It contains interviews, talk summaries, anecdotes and graphics from the conference as well as information gathered in post-conference conversations. The information about past companion diagnostic products, business models for drug/diagnostic collaborations, education & marketing, intellectual property, regulatory, and reimbursement is intended for those in the pharmaceutical, diagnostic, and medical device industries interested in developing companion diagnostics, as well as stand-alone diagnostics.