Ariad's Partner Withdraws Its Diagnostic Test; Here's Why That Doesn't Sink the Stock

(This post is by Mia Burns, associate editor for Pharmalive.com.)

In another stumbling block for personalized medicine, MolecularMD has chosen to pull its premarketing approval application to the FDA for its BCR-ABL T315I Mutation Test. The company made this announcement yesterday with Ariad Pharmaceuticals (ARIA). The test was meant to be a companion diagnostic to be used with Ariad’s BCR-ABL inhibitor, ponatinib, which is under FDA review for the treatment of resistant or intolerant chronic myeloid leukemia and Philadelphia-chromosome positive acute lymphocytic leukemia. But the FDA’s Center for Devices and Radiological Health told MolecularMD recently that the test is not considered a companion diagnostic for ponatinib. FDA guidance states that for a test to be considered as a companion diagnostic test, it must provide information that is essential for the safe and effective use of a therapeutic product.

And on that news, Ariad stock reached a 52-week high.

ARIA Chart

ARIA data by YCharts

According to Joshua P. Cohen, Ph.D., Senior Research Fellow, Tufts Center for the Study of Drug Development says while the withdrawal is a minor blow, it will not have major repercussions to the development of personalized medicine.

“Personalized medicine will progress the same way a toddler learns to walk,” he says. “The important thing is companies are collaborating at earlier stages in the drug development process to develop therapeutics and tests in tandem. In this respect, they are following FDA guidance on personalized medicine and co-development of test and therapeutic. Ultimately, the more co-developed product combinations companies launch the better off patients will be. Moreover, it is a win-win situation in that other stakeholders, such as payers, providers, and the pharmaceutical industry stand to benefit as well.”

In July 2011, Dr. Cohen released a study titled “Lack of clinically useful diagnostics hinder growth in personalized medicines.” Among the study findings was the fact that less than 1 percent of currently marketed drugs in U.S. have a companion diagnostic. Lack of clinical usefulness of many companion diagnostics has led payers to deny or restrict reimbursement of tests.

To read the remainder of this article, go to Pharmalot.

Ed Silverman is the editor of Pharmalot and a contributor toYCharts Pro Investor Service which includes professional stock charts, stock ratings and portfolio strategies.

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