Companion Diagnostics Market By Product And Service (Kits And Reagents, Software And Services), By Technology (Polymerase Chain Reaction, Next Generation Sequencing), By Indication (Lung Cancer, Breast Cancer, Colorectal Cancer), By End-User (Reference Laboratories , Pharmaceutical And Biopharmaceutical Companies), By Region and Companies - Industry Segment Outlook, Market Assessment, Competition Scenario, Trends and Forecast 2023-2032

Report Overview

The Global Companion Diagnostics Market Size is expected to be worth around USD 4,786 Million by 2032 from USD 2,452 Million in 2022, growing at a CAGR of 7.1% during the forecast period from 2022 to 2032.

Advances in genomics and genetic sequencing have led to a better understanding that drug effects can differ among individuals. This knowledge facilitates the practice of providing the “right drug at the right time, in the right dosage, to the right person.” To ensure targeted therapies reach the appropriate candidates, pharmaceutical and biopharmaceutical companies are increasingly integrating patient-selection diagnostic tools early in drug development. These tools aid in identifying the biomarkers and genetic profiles that predict drug response, enhancing the precision of treatments. This approach is pivotal in driving the growth of the companion diagnostics market, as it aligns drug therapies with individual patient profiles, ensuring higher efficacy and safety.

Key Takeaways

• The global companion diagnostics market is projected to reach over USD 4,786 million by 2032.
• In 2022, the market was valued at USD 2,452 million.
• The companion diagnostics market is growing at a CAGR of 7.1%.
• North America led the companion diagnostics market in 2022 with a 43% revenue share.
• Europe had a 25% revenue share in the same year.

Product and Services Analysis

Companion diagnostics primarily involve assays, reagents, and software to determine the composition or quality of a substance. Assays, essential in life science, research, and environmental laboratories, are utilized alongside kits, which are comprehensive sets of tools designed for particular uses. Reagents, critical chemicals in lab testing, aid in the creation or measurement of other compounds.

These diagnostics employ advanced techniques like next-generation sequencing, immunohistochemistry, and polymerase chain reaction to pinpoint and analyze various cancers including lung, breast, colorectal, and melanoma. The primary users of companion diagnostics are pharmaceutical and biopharmaceutical companies, in addition to reference laboratories and contract research organizations, which leverage these tools for more targeted therapeutic strategies.

Technology Analysis

Polymerase chain reaction (PCR) technology holds a prominent market share, primarily driven by the introduction of innovative PCR kits from leading companies like QIAGEN. This technology is instrumental in identifying patients eligible for LUMAKRAS, a novel therapy developed by Amgen Inc. for treating Non-Small Cell Lung Cancer (NSCLC).

In March 2021, Thermo Fisher Scientific Inc. made a significant contribution to this sector by launching the QuantStudio 5 Dx Real-Time PCR System. This advanced system enhances the precision of results, thereby supporting the efficiency of molecular diagnostic workflows. The frequent introduction of new products and securing regulatory approvals have been pivotal in establishing the dominance of this segment in the market.

Indication Analysis

The dominance of the companion diagnostics segment in cancer diagnosis is attributed to the increasing global incidence of cancer and the strategic focus of key players on technological innovations. The World Health Organization reported that around 400,000 children are diagnosed with cancer annually as of February 2022.

Furthermore, the World Cancer Research Fund International noted that there were over 18 million cancer cases worldwide in the same year. Innovations such as F. Hoffmann-La Roche Ltd’s FDA-approved VENTANA HER2 dual ISH DNA probe cocktail assay in July 2020, which supports Herceptin therapy by detecting HER2 biomarkers, exemplify the advancements in this field.

Additionally, the neurology segment is projected to grow significantly due to rising Central Nervous System (CNS) disorders like Schizophrenia and Parkinson’s. This growth is driven by the development of precise diagnostic tools such as Fujirebio’s Lumipulse G-b-Amyloid 1-42 and 1-40 plasma assays, introduced in May 2022, which enhance the diagnosis of CNS conditions through innovative chemiluminescent enzyme immunoassays.

End-User Analysis

In 2022, pharmaceutical and biopharmaceutical companies held the largest market share, primarily driven by collaborations with companion diagnostic firms. Notably, in November 2021, Burning Rock Biotech Limited partnered with Merck KGaA to develop the MET inhibitor tepotinib using Burning Rock’s OncoCompass Target Panel, a next-generation sequencing method for liquid biopsy. Further enhancing its position, Burning Rock formed a strategic global partnership with IMPACT Therapeutics in August 2021. This alliance focuses on developing a companion diagnostic test to monitor drug efficacy in synthetic lethality therapies.

Additionally, Illumina Inc. and Boehringer Ingelheim collaborated in January 2022, aiming to accelerate precision medicine for advanced cancer patients by creating new diagnostic tests for Boehringer Ingelheim’s oncology programs. These collaborations, coupled with technological advancements and new product introductions, are expected to fuel significant growth in this sector during the forecast period. The continuous development of companion diagnostics for various indications remains a pivotal focus for this segment.

Key Market Segments

By Product and Service

• S Assays
• Kits and Reagents
• Software and Services

By Technology

• Polymerase Chain Reaction
• Next Generation Sequencing
• In Situ Hybridization
• Immunohistochemistry

By Indication

• Lung Cancer
• Breast Cancer
• Colorectal Cancer
• Leukemia
• Melanoma

By End-User

• Pharmaceutical and Biopharmaceutical Companies
• Reference Laboratories
• Contract Research Organizations

Drivers

Increasing Prevalence of Cancer to Augment Market Growth

Recent years have witnessed a marked rise in cancer incidence, which has significantly boosted the demand for Companion Diagnostic (CDx) assays. These assays are crucial for providing precise genomic testing results that guide treatment decisions. In response to the growing prevalence of cancer, sales of CDx products have surged. For instance, in November 2021, Canada reported 229,200 new cancer diagnoses. Additionally, the World Health Organization noted that in 2022, there were 2.26 million new cases of breast cancer and 2.21 million cases of lung cancer globally. To address this increasing need, developers are introducing innovative tests capable of detecting specific genetic mutations.

One notable advancement is the Guardant360 CDx, which gained U.S. FDA approval in August 2020. This test, a pioneering liquid biopsy companion diagnostic utilizing Next-Generation Sequencing (NGS) technology, identifies patients with specific mutations in the Epidermal Growth Factor Receptor gene (EGFR) associated with metastatic non-small cell lung cancer (NSCLC), thus driving the global market growth for these diagnostic tests.

Regulatory Approvals of New Tests for Different Indications to Stimulate Market Growth

The market for companion diagnostics is expanding significantly, driven by an increase in product approvals. As more tests receive approval, their adoption rises, boosting the market’s overall share. Leading manufacturers are concentrating on the development of new tests to further enhance market growth.

One such advancement comes from Agilent Technologies Inc., which has received approval for its PD-L1 IHC22C3 pharmDx. This test is a qualitative immunohistochemical tool designed to assess multiple tumor biomarkers. It helps to identify specific molecular profiles in cancer patients, determining the suitability of KEYTRUDA (an anti-PD-1 therapy) for treating cervical cancer. These developments are likely to bolster the market’s expansion significantly.

Growing need for targeted medicines

Global healthcare expenditure is on the rise, enhancing public awareness about daily safety and hygiene. Proper hygiene practices can significantly reduce the risk of contamination and infection from microorganisms.

The hand sanitizer market is poised for growth, fueled by heightened hygiene awareness. During the height of the coronavirus pandemic, the high mortality and treatment costs underscored the importance of hand sanitizers alongside mask usage to curb the virus’s spread.

Hand sanitizers are not only crucial for personal hygiene but also play a vital role in clinics and laboratories. They are used to disinfect equipment and prevent bacterial spread. Additionally, hand sanitizers offer versatile uses, including surface cleaning, keyboard disinfection, nail polish removal, and bacteria elimination. These multifaceted benefits are expected to propel market growth further.

Restraints

Incompetent Reimbursement Scenario and Stringent Regulatory

Reimbursement rates for companion diagnostic tests (CDx) lack a standardized method, varying significantly per case. As noted by Taylor Wessing LLP in June 2022, Germany differentiates reimbursement between outpatient and inpatient services. Inpatients benefit from diagnosis-related group coverage, whereas outpatients rely on a specified list of reimbursable treatments. This absence of a uniform regulatory framework complicates the clinical development and regulation of CDx.

The European Union is addressing some of these complexities through the in vitro diagnostic medical device regulation (IVDR), which mandates stringent requirements for scientific validity and clinical performance. However, the process for CDx conformity, requiring verification by a medical authority and notified entity, can extend up to 60 days. The development and global adoption of CDx technologies are significantly influenced by the presence of effective reimbursement policies and regulations. Without robust policies, the market growth and widespread adoption of these diagnostic tools face substantial obstacles.

Opportunity

Growing Demand For Personalized Medical Solutions

The companion diagnostics market is poised for substantial growth, driven by several key factors. As research and development in targeted therapies continue to expand, there is a growing demand for personalized medical solutions. This trend is gaining traction, particularly in emerging countries where awareness of such options is on the rise.

Additionally, the discovery of new biomarkers across various conditions enhances the precision and effectiveness of these diagnostics. The urgent need for advanced cancer treatments further underscores the market’s potential. These diagnostics not only help determine the suitability of therapeutic products for patients but also assess the balance of benefits against potential side effects. With these dynamics at play, the market is set to experience significant expansion in the coming years, offering promising opportunities for stakeholders.

Trends

Embracing Next-Generation Sequencing

Next-generation sequencing (NGS) has significantly evolved over the past five years, transitioning primarily from clinical applications to a broader focus in research. This advanced technology allows clinicians to identify multiple genes involved in cancer development through tests conducted on surgically removed tumors. Its rapid output capabilities are transforming how genetic data is interpreted in healthcare.

The market for companion diagnostics is witnessing a notable trend towards the integration of next-generation sequencing. This shift is driven by its ability to detect genetic anomalies crucial for diagnosing specific diseases. In response to this trend, industry leaders are continually introducing innovative testing solutions that enhance diagnostic precision.

In a strategic move, Illumina Inc. partnered with Soma Logic Operating Co. Inc. in January 2022. This collaboration aims to integrate Soma Scan, a proteomic assay, into Illumina’s high-throughput NGS platforms, further expanding the utility and reach of NGS in companion diagnostics.

Regional Analysis

The North American region holds a significant portion of the global companion diagnostics market, primarily due to the high incidence of cancer and chronic diseases. Advanced companion diagnostics (CDx) tests are widely adopted here. For instance, in 2020, the USA reported 1,806,590 new cancer cases. Europe follows as a major player, spurred by its growing pharmaceutical sector and collaborations such as the December 2021 partnership between QIAGEN and Denovo Biopharma LLC to develop a blood-based CDx test.

The fastest growth is projected in the Asia Pacific region, driven by increasing cancer rates and enhancements in healthcare infrastructure. It is noteworthy that Asia Pacific accounts for half of the global annual new cancer cases, with expected cancer deaths to rise by 36% by 2030. Additionally, strategic partnerships, like the July 2022 initiative between Geneseeq and Hospital de Base in Brazil to establish a precision cancer diagnostic lab, underline the region’s dynamic market expansion. Other regions like Latin America, the Middle East, and Africa are anticipated to experience slower growth.

Key Regions

• North America
  • The US
  • Canada
  • Mexico

• Western Europe
  • Germany
  • France
  • The UK
  • Spain
  • Italy
  • Portugal
  • Ireland
  • Austria
  • Switzerland
  • Benelux
  • Nordic
  • Rest of Western Europe

• Eastern Europe
  • Russia
  • Poland
  • The Czech Republic
  • Greece
  • Rest of Eastern Europe

• APAC
  • China
  • Japan
  • South Korea
  • India
  • Australia & New Zealand
  • Indonesia
  • Malaysia
  • Philippines
  • Singapore
  • Thailand
  • Vietnam
  • Rest of APAC

• Latin America
  • Brazil
  • Colombia
  • Chile
  • Argentina
  • Costa Rica
  • Rest of Latin America

• Middle East & Africa
  • Algeria
  • Egypt
  • Israel
  • Kuwait
  • Nigeria
  • Saudi Arabia
  • South Africa
  • Turkey
  • United Arab Emirates
  • Rest of MEA

Key Players Analysis

Hoffmann-La Roche Ltd., Agilent Technologies Inc., and Abbott are distinguished leaders in the companion diagnostics market, primarily through strategic new product launches and acquisitions. For instance, in April 2021, Agilent Technologies Inc. enhanced its capabilities in next-generation sequencing (NGS)-based oncology diagnostics by acquiring Resolution Bioscience Inc., a leader in this area. This acquisition not only expanded Agilent’s oncology diagnostics capabilities but also strengthened its position in the personalized medicine sector.

Similarly, Illumina Inc. has formed significant partnerships, such as with Loxo Oncology, to develop NGS-based companion diagnostics, aiming to align with top biotechnology firms and advance therapeutic diagnostics. Additionally, BioMerieux has initiated collaborations with various medical device and pharmaceutical companies to boost innovation. The market is fragmented with numerous local and regional players who introduce competitively priced products. To maintain market dominance, key players are adopting expansion strategies including partnerships and launching innovative products, facing fierce competition from well-established brands with robust distribution networks.

Market Key Players

• Abbott
• Agilent Technologies Inc.
• F. Hoffmann-La Roche Ltd. (Switzerland)
• Guardant Health
• QIAGEN (Germany)
• Myriad Genetics, Inc.
• Illumina Inc.
• Thermo Fisher Scientific Inc.
• BIOMERIEUX (France)
• Myriad Genetics Inc.
• Other Key Players.

Recent Development

• In July 2024: Myriad Genetics expanded its offerings in the companion diagnostics sector by launching the Universal Plus Panel for the Foresight® Carrier Screen. This new panel includes tests for 39 additional conditions and extends its genetic screening capabilities to up to 272 genes associated with serious inherited diseases. This launch reflects the company’s ongoing efforts to enhance diagnostic accuracy and broaden the scope of genetic screening, aligning with its strategic focus on expanding into comprehensive genetic risk assessment.
• In January 2024: Agilent Technologies announced a collaboration with Incyte to develop advanced companion diagnostics for hematology and oncology. This partnership aims to leverage Agilent’s expertise in in vitro diagnostic (IVD) assay development, regulatory approvals, and commercialization to support clinical trials and the potential registration of companion diagnostics in the United States and Europe.
• In October 2023: QIAGEN and Myriad Genetics established a strategic partnership to enhance the development of companion diagnostics in cancer care. This collaboration aims to create both lab-developed and globally distributable kit-based tests, utilizing advanced PCR and next-generation sequencing technologies. These initiatives are designed to advance precision medicine by tailoring cancer treatment to the genetic profiles identified by these new diagnostic tests.
• In August 2023: Abbott announced a collaboration with Medtronic to integrate their continuous glucose monitoring (CGM) system with Medtronic’s insulin delivery devices, expanding their capabilities in diabetes care management.

Report Scope