Assessing Risk and Return: Personalized Medicine Development & New Innovation Paradigm

Abstract:     
In making a credible business case for investors and industry stakeholders to view personalized medicine as a viable business model, we not only must create excitement in the promise of personalized medicine, but also must find viable alternatives in addressing the barriers or risks surrounding the biomedical discovery and development models of today. Some of the risks we identify include IP issues, difficulties in validating targets, ability to rapidly achieve proof of concept, navigating the famed "Valley of Death," and inefficiencies in the current clinical development process, as well as the need for new industry business models that predict an attractive return on investment. In this paper; however, we limit our discussion to the potential for personalized medicine to create efficiencies in the preclinical and clinical phases of drug innovation and generate economic returns. We also introduce unique industry collaboration mechanisms with nonprofit disease-focused organizations that serve an important role in de-risking aspects of drug discovery and clinical development in their respective disease sectors, as well as bridging early-stage funding needs. These collaborations and de-risking strategies could provide an important model for the further development and growth of the personalized medicine sector.

With respect to definition, we shall use the more general term "stratified medicine," of which personalized medicine is the individualized member of a spectrum that includes empirical medicine, stratified medicine, and personalized medicine. In the latter two, a biomarker is critical in identifying sub-populations or strata of patients that can benefit from a therapeutic intervention that is related to that biomarker, or develops a therapy that specifically benefits an individual who possesses that biomarker. A biomarker also may identify strata of patients that might be susceptible to side effects from a particular therapy.

Number of Pages in PDF File: 34

Keywords: biomarker, personalized medicine, medicine, foundation, business, pharmaceutical, de-risking, therapy, discovery, biomedical

working papers series