Foundation Medicine gets FDA, CMS nods for pan-cancer genomic test

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Having picked up the approval, Foundation Medicine has set its sights on cornering the companion diagnostic market.

Foundation Medicine has brought its pan-cancer test through the parallel review process, securing FDA approval and a likely coverage by Medicare. The approval is the first time the FDA has signed off on such a broad test.

FoundationOne CDx (F1CDx), the diagnostic covered by the rulings, is an NGS-based test to detect alterations in 324 genes relevant to non-small cell lung cancer, breast cancer, colorectal cancer, ovarian cancer and melanoma. F1CDx also provides information on microsatellite instability and tumor mutational burden. 

Foundation Medicine parcels up the information into reports designed to help physicians match each patient to an approved targeted therapy, immunotherapy or clinical trial. These reports show which FDA-approved drugs use the test as a companion diagnostic—there are currently 15—and have led Foundation Medicine to frame F1CDx as an “easy button” for physicians.

In moving away from the one test, one drug model that has defined companion diagnostics so far, Foundation Medicine should also reduce the burden on patients and accelerate the identification of the most appropriate treatment.   

“Tissue samples in solid tumors are hard to come by. Here, you can get, with one tissue sample, information on the alterations that could stem from any one or a combination of more than 300 genes. That's really important,” Melanie Nallicheri, chief business officer and head of biopharma at Foundation Medicine, said. 

Foundation Medicine picked up the FDA approval on the same day the Centers for Medicare & Medicaid Services (CMS) proposed coverage of the test. Assuming the CMS decision is finalized after the 90-day public comment administrative period, the test will become available through Medicare and the Medicare Advantage plans provided by commercial payers. 

The parallel processing of regulatory and reimbursement decisions will cut the time it takes for patients to access the test. Foundation Medicine is the second company, after Exact Sciences, to go through the parallel process. And, like Exact, it had a good experience.  

“The process has been very positive and constructive for us with both agencies. Both organizations see the benefits of the process,” Nallicheri said.

RELATED: Foundation Medicine up for expedited review by FDA, CMS

Having picked up the approval, Foundation Medicine has set its sights on cornering the companion diagnostic market. Historically, drug developers and diagnostics companies struggled to coordinate timelines and align their very different business models. The approval of FoundationOne stands to eliminate much of the complexity by providing a platform that can be expanded through validation work. 

“You now have a much accelerated and derisked path to a companion diagnostic because all you need to do is get your claim added to the test via a supplemental PMA, which is much easier, faster and has much lower risk than starting afresh,” Nallicheri said.

Given the number of molecularly defined cancer therapies coming down the pipeline, Foundation Medicine stands to grow its companion diagnostic business significantly if it can establish itself as the partner of choice for drug developers.

Investors responded to the approval by driving up the firm’s stock by 11% in after-hours trading, adding to the 5% gain made during the day. That moved Foundation Medicine’s stock above the historic highs it hit in 2015. Since reaching that earlier high, the company’s struggles to secure payer coverage and squeeze money out of its tests have dragged on the stock.

Foundation Medicine now has a draft coverage nod that would bring its test to all seniors covered by Medicare and Medicare Advantage, a sizable slice of the cancer market. Beyond that, the firm is gearing up to connect with commercial payers and get the test to as many patients as possible.