Can Anyone Make Money from Biomarkers?
This article was originally published in Start Up
Biomarkers are being used now across the whole pharmaceutical value chain, but it's unlikely we'll see a surge in the number of VC-backed biomarker discovery start-ups until the business models are proven.
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Biomarker diagnostics are the linchpin of personalized medicine. But building a successful business around such tests is anything but straightforward, given the complexities associated with both their development and commercialization. Today's molecular diagnostic companies need to think carefully before they choose a "go it alone" strategy when developing a particular test. It may make more sense to forge a partnership with another diagnostic company or a drug developer with the goal of sharing costs and relative risks.
Amidst a slew of disappointing IPOs, the moderate success of Genomic Health's IPO signals investor interest in a new diagnostics model: a combination product/service business -- technologically agnostic -- focused on coming up with an answer to a specific yes/no question that will either lead to or discourage an expensive therapy by a specialty physician audience. Several other start-ups are following the same model.
VCs won't go near traditional diagnostics. But some are starting to bet on biomarkers that expedite drug R&D and commercialization. Only one problem: they've yet to come up with the right business model