Medical Device Link.

Providing further evidence that the field of companion diagnostics is expanding, Novartis AG (Basel, Switzerland) has created its own Molecular Diagnostics unit. The group, formed at the end of last year and the beginning of 2009, is headed by Michael Nohaile, formerly the head of corporate strategy, with David Epstein as president and CEO of oncology and molecular diagnostics.

The new unit is expected to be fully staffed by the end of this year. It is co-located in Cambridge, MA, and Basel, Switzerland.

The group is tasked with two primary objectives, according to Nohaile. The first is to develop commercial diagnostics associated with Novartis’s own pharmaceuticals, to better target those therapies. The second is to generate stand-alone diagnostics to predict, diagnose, and monitor disease and therapies. Molecular Diagnostics will have “specialized diagnostics capabilities responsible for sourcing, developing, registering, and commercializing products across the entire Novartis Group,” said Nohaile.

The unit’s first products are likely to be in oncology, since Novartis has the necessary information to create companion diagnostics for many of its targets in that field. “Because cancer is primarily caused by genetic disruption, having the ability to test for these anomalies allows us to create drugs that target the exact problem. By using molecular diagnostics in this way, the right patient can be put on the right therapy, which can enhance treatment outcomes,” Nohaile said. He estimates Novartis’s early molecular diagnostics portfolio will be about 50% oncology related. Diagnostics kits will be developed on the same timeline as medicines, Nohaile said, so that the drugs and their companion diagnostics can reach the market simultaneously.

Indeed, industry analyst Manfred Scholz, PhD, commenting on Novartis’s foray into diagnostics, told IVD Technology last summer that “the areas that can benefit most from a drug-diagnostics combination are oncology and infectious-disease management. Naturally, that would be a fit for Novartis.”

Nohaile said that many of the ideas for the new unit “came from the biomarker work we’ve been doing for years—for example, to support the patient-selection component of clinical-trial design. What we plan to do now is develop those useful biomarkers into FDA-approvable diagnostic tools.” In the past, the efforts of the biomarker and diagnostics areas of Novartis were fragmented across several areas, such as research, vaccines, pharma development, and oncology. The new unit “brings these competencies together under one umbrella,” he said.

Nohaile told the GenomeWeb Daily News in February that Novartis chose to move some of its companion-diagnostics efforts in-house to “minimize the friction” of working with third parties, and he explained that many of the big decisions surrounding potential diagnostics occur very early in drug development, long before an external partner would get involved—“presenting the opportunity for an internal team to exploit that information to Novartis’s advantage,” he told GenomeWeb.

For stand-alone diagnostics, the unit will do its own research. “While the companion diagnostics will often help make our medicines more competitive, these stand-alone diagnostics could well deliver the largest new revenue stream” for the company, Nohaile said.

He told GenomeWeb that any diagnostics the group creates must have “clear clinical utility in terms of improving efficacy or safety, and would ideally change the way medicine is done.”

As IVD Technology reported a few years ago, Novartis acquired Chiron Corp. (Emeryville, CA), a vaccine and diagnostics company, in April 2006. It appears that one of Novartis’s goals in acquiring the company was to delve further into molecular diagnostics.

Chiron, under Novartis, an-nounced earlier this year that it has agreed to extend and expand its blood-screening collaboration with Gen-Probe until 2025. As part of the expanded agreement, Novartis has agreed to help fund development of Gen-Probe’s Panther instrument, a fully automated molecular testing platform, for the blood screening market, according to a Novartis press release. The companies also have agreed to evaluate the development of companion diagnostics for current or future Novartis medicines.

Despite fear on the part of some pharmaceutical companies that companion diagnostics threaten the blockbuster-drug model because they limit the number of candidates for a drug, Nohaile is undaunted. He told GenomeWeb, “We don’t fear taking drugs to smaller populations” in cases where the potential benefits for the patients could be “fantastic.”

As for the potential regulatory and reimbursement hurdles companion diagnostics are likely to face, Nohaile maintains that he sees molecular diagnostics as key to the overall Novartis Group strategy. He calls molecular diagnostics an “attractive market” and has confidence in it. “We recognize the role it will play in improving patient outcomes and healthcare utilization worldwide,” he said.