Valuation of biomarkers

Over the past decade, there has been a widespread adoption of biomarkers into drug development programmes by the pharmaceutical industry. However, the number of biomarkers recognized by regulatory authorities as acceptable surrogate end points in pivotal trials has remained very small. Nevertheless, proponents of less well-validated biomarkers — that is, ‘non-surrogate’ biomarkers — have advocated their use for internal decision-making to make drug development “cheaper and faster”1. What types of biomarkers should be pursued? How much money should be invested on biomarkers for any given programme? Although many factors need to be considered before making an investment decision, a good place to start is consideration of return on investment. At a minimum, the benefits accruing from an investment should be greater than its cost. Furthermore, a dollar spent on a biomarker programme today is not fully offset by a dollar earned from a sale of a drug 5 years from now. Therefore, both costs and expected benefits need to be discounted to the present, using the cost of capital currently available to the company. There are many types of biomarkers2, but much of the current literature is devoted to those designed to predict either efficacy or toxicity of a drug treatment. Of these two, estimation of financial impact is more straightforward for those purporting to predict efficacy. For example, lowering of blood pressure is now accepted by regulatory authorities as a surrogate biomarker for subsequent development of clinically meaningful end points such as stroke, myocardial infarction and renal failure. However, the value equation is different for the vast majority of efficacy biomarkers that have not been validated to a degree necessary for acceptance as primary end points by regulatory authorities. By definition, clinical studies with a non-surrogate biomarker cannot be substitutes for registration trials that use recognized primary clinical end points of safety and efficacy; they can only be a prelude or adjunct to registration studies. Thus, non-surrogate biomarkers represent an additional cost. This additional expenditure can be recouped in one of three ways: first, increased understand ing of a disease mechanism or drug action, thereby informing better choices of drug targets in the future; second, the generation of an independently marketable or companion diagnostic; or third, reduction of the failure rate of subsequent registration studies. The first is difficult to quantify, and the second, although quantifiable, is beyond the scope of this article, which focuses on the potential value of non-surrogate biomarkers intended to reduce failure of subsequent trials.