COMPANION DIAGNOSTICS MARKET ANALYSIS

Global companion diagnostics market size is estimated to be valued at US$ 6.95 Bn in 2023 and is expected to reach US$ 15.63 Bn by 2030, exhibiting a compound annual growth rate (CAGR) of 12.3 % from 2023 to 2030.

Companion diagnostics are medical devices, often in vitro devices, which provide information that are essential for the safe and effective use of a corresponding drug or biological product. There are two main types of companion diagnostics - safety tests and predictive tests. Safety tests are used to identify patients who are likely to experience adverse reactions or for whom the drug may not be effective due to genetic or other biological factors. This helps ensure treatments which are only given to those patients who will benefit and avoids treatment harming others. Predictive tests help identify patients who are more likely to respond favorably to a particular treatment. This allows for a more personalized healthcare approach by targeting therapies only to suitable patients.

Global companion diagnostics market is segmented into technology type, application, end user, and region. By technology type, the real time-polymerase chain reactions (PCR) segment accounted for the largest market share in 2022. The high share of this segment is due to the continuous regulatory approvals of new products.

Global Companion Diagnostics Market Regional Insights

North America: North America is the largest market for global companion diagnostics market, which accounted for a market share of over 36.8% in 2022. As the region is technologically advanced, North America, particularly, the U.S. and Canada, hold a significant share in the companion diagnostics market. The continuously increasing product approvals by regulatory authority are increasing the companion diagnostics market over the forecast period. For instance, in October 2022, F. Hoffmann-La Roche Ltd., a pharmaceutical company received U.S. Food and Drug Administration (U.S. FDA) approval for first companion diagnostic to identify patients with HER2 (human epidermal growth factor receptor 2) low metastatic breast cancer.

Europe: Europe is the fastest-growing market for companion diagnostics, which accounted for a market share of over 27.2% in 2022. The real time-PCR in Europe is increasing the adoption of these assays for infectious disease testing. According to the European Centre for Disease Prevention and Control, real time-PCR assays are being widely used across European countries for the diagnosis of hospital-acquired infections.

Asia Pacific: In past five years, adoption of next generation sequencing (NGS) has grown exponentially across major Asia Pacific markets such as China, Japan, India and South Korea. The government organizations in these countries have undertaken large-scale genome sequencing projects to better understand the genetic variations among their populations.

Figure1. Global Companion Diagnostics Market Share (%), By Region, 2023

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Analysts’ View of the Global Companion Diagnostics Market:

Global companion diagnostics market is expected to grow significantly in the  near future. Increasing incidence of cancers worldwide is a major driver pushing the demand for more accurate and personalized treatment options. Companion diagnostics help select appropriate targeted therapies for patients that are based on their genetic makeup and likely response. This is expected to improve treatment outcomes while avoiding adverse reactions to unsuited medicines. Furthermore, the  approvals of many targeted oncology drugs coupled with complementary companion diagnostics by regulatory agencies will propel the market growth.

However, high assay development costs and longer approval timelines remain challenges to overcome. Limited clinical evidence validating companion diagnostic tests sometimes hamper their broader adoption and insurance coverage. Nonetheless, technological advancements enabling high-throughput screening of multiple biomarkers simultaneously are helping to address these issues.

Global Companion Diagnostics Market Drivers:

• Increasing number of cancer patients: Rising prevalence of cancer cases is one of the key factors fueling the growth of the companion diagnostics market. For instance, in February 2023, according to data published by the American Society of Clinical Oncology (ASCO), there were more than 3.8 Mn women living with or beyond breast cancer in the U.S. In 2023, an estimated 297,790 women in the U. S. will be diagnosed with invasive breast cancer, 55,720 women will be diagnosed with non-invasive (in situ) breast cancer, and 43,700 deaths (43,170 women and 530 men) from breast cancer will occur in the U.S.
• Technical advancements in companion diagnostics: Technical advancements in the field of companion diagnostics are enabling personalized treatment approaches which are a key factor in driving the growth of the companion diagnostics market. Next generation sequencing (NGS) technologies and protein biomarker analysis techniques are allowing detection of mutations, gene expression levels, and other molecular indicators with higher sensitivity and specificity. This is empowering doctors to stratify patients and prescribe targeted therapies. For example, analysis of HER2 expression in breast cancer helps to determine, whether  a patient will benefit from Herceptin, a monoclonal antibody treatment. Similarly, Epidermal Growth Factor Receptor (EGFR) mutation testing in lung cancer guides the use of tyrosine kinase inhibitors like Tarceva.
• Growing funding for R&D projects related to companion diagnostics: The funding for research and development (R&D) projects related to companion diagnostics from government and non-profit organizations has significantly increased over the past few years. Companion diagnostics aim to identify specific biomarkers that help to determine which patients are likely to respond to a particular therapeutic product. This targeted therapy allows for improved outcomes and less adverse effects by treating only the patients with a high likelihood of responding to that therapy.

Global Companion Diagnostics Market Opportunities:

• Liquid biopsy as companion diagnostics: Liquid biopsy as companion diagnostics offers promising opportunities for growth in the companion diagnostics market. Liquid biopsy involves collecting blood samples to analyze circulating tumor DNA (ctDNA) or circulating tumor cells (CTCs), thus allowing for detection of cancer mutations without invasive tumor tissue biopsies. This non-invasive approach provides several advantages over conventional tissue biopsies for companion diagnostic use.
• Collaboration between pharmaceutical and diagnostic companies: Collaboration between pharmaceutical and diagnostic companies could unlock significant opportunities in the companion diagnostics market. When drug developers work closely with diagnostics makers from the early stages of drug development, it ensures that the companion diagnostic is optimally developed to detect patients who are most likely to benefit from the targeted therapy. For instance, on July 6, 2023, Tempus a healthcare technology company collaborated with TScan Therapeutics a biotech company to develop a companion diagnostic (CDx) test. This collaboration supports TScan Therapeutics’s screening protocol for its Phase 1 solid tumor clinical trial.

Global Companion Diagnostics Market Trends:

• Strategic alliances and partnerships: Strategic alliances and partnerships are playing a major role in influencing the companion diagnostics market. Many pharmaceutical and biotech companies are forming strategic partnerships and collaborations with diagnostic tool makers to co-develop companion diagnostics for their pipeline drugs. For instance, in June 2022, GRAIL, LLC, a healthcare company collaborated with AstraZeneca a pharmaceutical company to develop and commercialize companion diagnostic (CDx) assays. This collaboration focus on developing companion diagnostic tests to identify patients with high-risk and early-stage disease.
• Biomarker discovery and development: The discovery and development of new biomarkers is greatly influencing the companion diagnostics market. Biomarkers play a crucial role in precision medicine by helping doctors select the right treatment for the right patient. As a deeper understanding is gained of the molecular causes of diseases, more biomarkers are being identified that can guide therapeutic decisions and improve clinical outcomes. Pharmaceutical companies are collaborating extensively with diagnostic firms to co-develop companion diagnostics alongside drug candidates.

Global Companion Diagnostics Market Restraints:

• Complexity of integration: Regulatory issues surrounding the approval and implementation of companion diagnostics are a major restraint to the growth of this market. Stringent regulations and lack of reimbursement policies for these tests have made it challenging for companies to launch new companion diagnostic tools. Policies need to catch up with the science for this promising field to reach its potential. Both national regulatory agencies and private insurers must work to establish streamlined, predictable pathways to bring novel companion diagnostics safely and swiftly to patients. This will encourage more innovation and development of precision medicine tools, thus enabling better targeted treatment strategies.
• Lack of skilled professionals: Lack of skilled professionals is one of the major challenges restraining the growth of companion diagnostics market. Companion diagnostics is an evolving field that requires highly skilled labor to perform complex tasks like assay development, biomarker discovery, validation of diagnostic tests, molecular analysis, and clinical trials. However, there is acute shortage of professionals who possess expertise in domains of precision medicine, molecular biology, cancer biology, and genomics.

Counterbalance: proper reimbursement policies needs to be carried out to launch new companion diagnostics tools in the market. Also, there should be adequate availability of skilled professionals with expertise in precision medicine domain to work in the companion diagnostics field.

Recent Developments

New product launches/ Approvals

• On August 7, 2023, QIAGEN, a molecular diagnostics company, received U.S. Food and Drug Administration (FDA) approval of its therascreen PDGFRA RGQ PCR kit. The kit is the first platelet-derived growth factor receptor alpha (PDGFRA) assay to receive U.S. Food and Drug Administration (FDA) approval as a companion diagnostic
• On August 2022, Thermo Fisher Scientific Inc. a biotechnology company received U.S. Food and Drug Administration (FDA) grant premarket approval for Oncomine Dx Target Test as a companion diagnostic (CDx) to identify patients whose tumors have a HER2 (ERBB2) activating mutations in non-small cell lung cancer

Acquisition and partnerships

• In October 26, 2023, QIAGEN a molecular diagnostics company and Myriad Genetics a genomic testing company enter into strategic partnership to develop companion diagnostic tests in the field of cancer. This partnership covers development of lab-developed and distributable kit-based companion diagnostic tests.
• In January 2022, Illumina Inc. a biotechnology company entered into strategic partnership with Boehringer Ingelheim a pharmaceutical company to develop companion diagnostics (CDx) for several programs in Boehringer Ingelheim's oncology pipeline. This partnership accelerates the development of therapy selection and precision medicines for patients with advanced cancer.                             

Figure 2. Global Companion Diagnostics Market Share (%), By Type, 2023

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Top Companies in Global Companion Diagnostics Market

• Hoffmann-La Roche AG
• Agilent Technologies, Inc
• QIAGEN N.V
• Abbott Laboratories, Inc.
• Almac Group
• Danaher Corporation
• Illumina, Inc.
• bioMérieux SA
• Myriad Genetics, Inc.
• Sysmex Corporation
• Thermo Fisher Scientific Inc.
• Abnova Corporation
• Guardant Health, Inc.
• Icon Plc.,
• Biogenex Laboratories, Inc.

Definition: Companion diagnostic is a medical device used as an in-vitro diagnostic device, which is used to provide essential information of the drug or therapeutic product such as, whether the drug is safe and effective towards particular treatment in patients, in identifying whether the patients are more likely to have benefit from the prescribed drug, and also carries out drug monitoring on the patients.