Objective and methods: We explore the cash value of the companion diagnostics opportunity from the perspective of the pharmaceutical partner. Cashflow-based modeling is used to demonstrate the potential financial benefits of key relationships between the pharmaceutical and diagnostics industries.
Results: In four scenarios, the uplift in the net present value (NPV) of a proprietary medicine can exceed $US1.8 billion. By simple extrapolation, the uplifted NPV calculations allow realistic and plausible estimates of the companion diagnostic opportunity to be in the region of $US40 billion to $US90 billion.
Conclusion: It is expected that such market valuation could drive a macroeconomic change that shifts healthcare practice from reactionary disease-treatment to proactive health maintenance.