Other drug development firms could learn a lesson from Biogen Idec Inc. and Elan Corp. plc, which turned once-troubled multiple sclerosis (MS) drug Tysabri (natalizumab) into a potential multi-billion-dollar-a-year product by adopting a personalized medicine approach.

Tysabri, an antibody targeting alpha-4 integrins, had been on the market barely four months in 2005 when Weston, Mass.-based Biogen and Dublin, Ireland-based Elan yanked the drug from shelves following two reports – one fatal – of progressive multifocal leukoencephalopathy (PML), a serious brain infection that can affect patients who are immune suppressed.

Patient demand for Tysabri – still widely considered the most efficacious MS therapy – helped lead to a rare second approval in 2006, but it was saddled with a strict risk-management plan that left many analysts at the time doubtful the drug would ever reach blockbuster status.

But, in 2009, worldwide sales of Tysabri topped $1 billion, and the latest label revision Friday, which adds JC virus antibody status as the third PML risk factor and authorizes a blood test developed by Quest Diagnostics Inc., is expected to lead to broader use of the drug. Piper Jaffray analyst Ian Somaiya, for instance, estimated that Tysabri has the potential to generate peak sales of $4 billion to $5 billion.

"We see Tysabri becoming the preferred second/third-line treatment for MS, and arguable front-line for JCV-negative patients, given the best efficacy available, manageable side effects and convenient dosing," he wrote in a research note.

The trick to Tysabri's turnaround was Biogen's and Elan's decision to invest in a development plan aimed at clarifying the risk-benefit profile and identifying the MS patients who would be at risk for developing PML.

The companies determined three risk factors for PML – JCV antibody-positive since PML results from infection with the JC virus, prior immunosuppressant therapy and treatment with Tysabri for more than two years – and patients who check all three categories have the highest risk. The latter two risks can be monitored by physicians, but a test was needed to determine the presence of JCV antibodies.

So a couple of years ago, the partners began working with Quest Diagnostics in an exclusive collaboration to develop a simple blood test capable of detecting anti-JCV antibodies.

Cancer drugs such as Herceptin (trastuzumab, Roche AG) and recently approved Zelboraf (vemurafenib, Roche AG and Daiichi Sankyo) have benefited from the use of companion diagnostics, and in some cases, such as ChemGenex Pharmaceuticals Ltd.'s Omapro (omacetaxine), the FDA has expressed a preference for companion diagnostics developed in tandem with targeted therapies. The field has been slow to grow, though "I think we'll see a slow, steady pace of more and more partnerships" between drug companies and firms like Quest, said Nick Conti, vice president of business development at Madison, N.J.-based Quest.

Pharma firms also turn to the personalized approach after a drug has disappointed in Phase III testing, hoping that the discovery of a biomarker will enable firms to separate the responders from nonresponders.

And then there's the salvage opportunity, like the Tysabri deal, Conti told BioWorld Today, referring to a drug that's already on the market. The objective, then, is to alleviate the risk of adverse events or to expand the drug's use in a broader population.

In the case of Tysabri, the newly approved Stratify JCV test could do both. About 55 percent of patients with relapsing MS are believed to be anti-JCV-positive, so the use of a test that can clearly identify JCV status should increase physician use of Tysabri in patients who are JCV-negative. Plus, Piper Jaffray's Somaiya noted that physicians at the recent European Committee on Treatment and Research in Multiple Sclerosis meeting "expressed confidence in treating JCV-positive patients without a history of immunosuppressants, with the caveat that treatment duration could still be limited to two years to further reduce the PML risk."

Particularly for approved drugs, since investors start looking at patent expirations, time is of the essence. That gives Quest an advantage, since its services range all the way from biomarker discovery to commercialization and requires no hand-offs to other companies along the way. "When you're waiting on a label change, you want something that will take the least amount of time," Conti said.

Tysabri is not the only drug to be associated with PML. In 2009, South San Francisco-based Genentech Inc. (now part of the Roche Group) opted to withdraw psoriasis drug Raptiva (efalizumab) from the market after three confirmed cases surfaced. That same year, the FDA rejected expanded approval of Roche's and Biogen's Rituxan (rituximab) for earlier use in rheumatoid arthritis, citing the PML risk. (See BioWorld Today, April 10, 2009, and Oct. 20, 2009.)

Quest's Stratify JCV test, however, is indicated specifically for patients treated with Tysabri, including patients with Crohn's disease who are taking the drug. But there's the possibility of studying similarly designed tests in other programs.

Conti anticipates more companion diagnostics deals in the future. "We're getting more inquiries," he said, with pharma firms interested in the "expertise we can bring to the game."

For Biogen, Tysabri is only one part of its MS franchise. The firm also is working on BG-12 (dimethyl fumarate) and daclizumab. So far, oral candidate BG-12 has yielded promising data in two pivotal MS trials and could end up edging out Novartis AG's Gilenya (fingolimod), which is being investigated for cardiovascular safety issues. Daclizumab, meanwhile, is in a Phase III trial against interferon beta-1 .

Shares of Biogen (NASDAQ:BIIB) closed Monday at $116.31, down $1.83. Shares of Elan (NYSE:ELN) gained 17 cents, to close at $13.34.