Bridging the "Valley of Death" in stratified medicine : commercializing molecular diagnostics in oncology

Historically, the development of molecular companion diagnostics in oncology has underwhelmed the expectation of the medical field since the successful mapping of the human genome a decade ago. There have been several highly successful developments (Her2-neu, Genomic Health, etc.), but not the widespread revolution in clinical practice expected at the turn of the century. The primary goal of this document is to investigate the economics driving molecular diagnostics and its relationship with strategic decisions in developing a diagnostic technology. The document begins with a broad analysis of the funding environment for molecular and esoteric diagnostics in oncology. Following a discussion of funding sources and current trends, the second section reviews the nature of the projects that funding supports. This is accomplished through a set of detailed case studies of Genomic Health and Immunicon to compare and contrast the strategic decisions that led to value creation events for both companies. Finally, the third section abstracts away from specific cases to develop a strategic analytic framework for evaluating the potential risk-adjusted NPV for a new diagnostic technology. Sensitivity analyses are conducted in addition to a discussion of current events that may change the structure of the underlying decision tree. The conclusion revisits the topics discussed in the first three sections, connecting the implications of funding on different strategic decisions and chances of success. Areas for further investigation both for inputs to the current model proposed, as well as for more refined versions of the development model are discussed.

Department dc:contributor.department

Sloan School of Management.

Grantor dc:publisher

Massachusetts Institute of Technology

Year dc:date.issued

2012

Author dc:creator

• Copp, Joshua

Advisor dc:contributor.advisor

• Ernst R. Berndt.

• Sloan School of Management.

Statement dc:rights

• M.I.T. theses are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission. See provided URL for inquiries about permission.

Licence dc:rights.uri

• http://dspace.mit.edu/handle/1721.1/7582

Language dc:language.iso

eng

Handle dc:identifier.uri

http://hdl.handle.net/1721.1/72907

OAI identifier oai:identifier

oai:dspace.mit.edu:1721.1/72907