The Evolution of the PD-L1 Testing Market

By Peter Keeling and Ewelina Golebiewska, PhD

Discovered more than 20 years ago, programmed cell death-1 (PD-1) is an immune checkpoint protein found on T cells, where it acts to dampen the cells’ immune response.¹ PD-1 and its primary ligand—programmed death ligand 1 (PD-L1)—have been shown to impart significant vulnerability to several types of tumors. Drugs that block the PD-1 checkpoint protein or the PD-L1 ligand, known as checkpoint inhibitors or anti-PD-1/PD-L1 therapies, work by unleashing previously dampened T cells to enable a more powerful immune response against cancer.

The market for anti-PD-1/PD-L1 therapies has the potential to be the largest in oncology, with sales projected to reach $33 billion in 2022.² Five major pharma companies have active development programs in the space, each leveraging testing in first- and second-line cancer treatments differently—but all equally dependent on the efficacy of the PD-L1 testing market (see Table 1).

Current PD-L1 testing is based on immunohistochemistry (IHC) methods—the same type of diagnostic platform that made it possible for Genentech to build its Herceptin (trastuzumab) franchise for the treatment of HER2 receptor-positive breast cancer. Optimizing that testing platform for use as a companion diagnostic for Herceptin required roughly 7 years.

The significant potential of therapies related to the PD-L1 testing market has given that market greater prominence than is typically the case for diagnostic tests at this stage of their development. In turn, such prominence is providing analysts with an opportunity to examine the market as it is unfolding by reviewing marketplace analogs, and assessing the laboratory data, diagnostic information, and competitive intelligence being generated by the companies that are building the market.^3,4 To analyze the trends that are forming in the PD-L1 testing market, Diaceutics assembled an internal panel of experts to focus on:

• Financial dynamics in the PD-L1 diagnostics and pathology markets.
• Analogs that reveal growth strategies that have (or haven’t) worked in the past, including the relevant history of other IHC biomarkers in their early stages.
• Biomarker and therapy trials, including an assessment of what study findings are actionable.
• Real-time data to define trends in PD-L1 test adoption and prescribing of pertinent anti-PD-1 drugs.

In addition, Diaceutics gathered a panel of 30 prescribers of the anti-PD-1 therapies Keytruda (Merck) and Opdivo (Bristol-Myers Squibb) to gather longitudinal first-hand perspectives about their experience with PD-L1 testing. This approach has enabled us to develop a set of observations about the dynamic PD-L1 testing market, which are highlighted in this article.

A Hyperconnected Biomarker

To a large extent, the availability and uptake of personalized medicines such as anti-PD-1/PD-L1 therapies are mediated by the results of clinical studies that define the utility of such therapies against specific types of cancer. Such studies also seek to identify specific genetic biomarkers that can be used to determine whether particular patients will benefit from the related therapy.

To develop personalized therapies against non-small cell lung cancer (NSCLC), researchers are conducting clinical trials in which testing for a number of candidate biomarkers is being explored. Among current late-stage trials of anti-PD-1/PD-L1 therapies to treat NSCLC, for instance, 33% are also capturing data about each patient’s status with regard to the anaplastic lymphoma kinase (ALK) gene, or epidermal growth factor receptor mutations (EGFRm)—or both.

Diagnostic applications of ALK status have been under study for more than 5 years. It is now measured in 12.5% of all lung cancer trials. Moreover, 50% of the trials that are capturing patients’ PD-L1 status also capture patients’ ALK or EGFRm status.

Studies involving PD-1/PD-L1 have a long way to go to catch up with the research already being done on other genetic biomarkers, but they have made a good start after just 1½ years of availability. Among trials begun since 2015 for all cancer indications and all phases, PD-L1 status is already being captured in 3.5% of studies, confirming that PD-L1 is being investigated in connection with a wide variety of cancers (see Figure 1).

In a May 2016 study of FDA’s clinical trials database, we found that 40% of all-phase clinical trials for NSCLC therapies required determination of the patient’s PD-L1 status (see Figure 2). Moreover, among the Phase 1 and Phase 2 trials initiated specifically to study the application of anti-PD-1/PD-L1 therapies against NSCLC, 31% required determination of the patient’s PD-L1 status. It is yet to be determined whether the tests used to ascertain this information will be labeled as companion or complementary diagnostics.

In light of these growing trends—and the likelihood that the number of anti-PD-1/PD-L1 therapies under investigation will continue to increase—we expect that by the end of 2020 75% of all clinical trials for the five anti-PD-1/PD-L1 therapies already launched or in development for the treatment of NSCLC—avelumab, durvalumab, Keytruda, Opdivo, and Tecentriq—will require testing to establish the patient’s PD-L1 status. At that point, testing for PD-L1 will be aligned with ALK and EGFRm testing, making testing of these three disease-related biomarkers the standard entry-points for initial diagnosis of NSCLC in oncology guidelines in the United States and EU.

At the same time, we expect that determination of patient PD-L1 status will also become a requirement in roughly 20% of all new oncology clinical trials.

PD-L1 Integration in NSCLC Regimens

In cases where PD-L1 status comes to be included in prescribing guidelines for NSCLC, it will inevitably become more integrated with the selected therapy. Oncology prescribers are becoming familiar with the value of identifying patient PD-L1 status, and clinical trial designs already show PD-L1 being aligned with other biomarkers as part of future patient segmentation strategies. Despite past concern regarding the utility and interpretation of PD-L1 status, current integration of PD-L1 testing into clinical practice indicates its rapid and ubiquitous uptake.

Just 1½ years after launch, PD-L1 testing is still at the beginning of its journey toward clinical relevance in oncology. Nevertheless, relatively speaking, PD-L1 is already more integrated into oncology clinical trials than other biomarkers were at the same time after their commercial launch (see Figure 3).

Adoption Will Be Rapid

The expert panel convened by Diaceutics believes that hands-on use of PD-L1 testing combined with the weight of discussion about the utility of such testing will drive adoption to higher levels. The panel’s assessment of these trends toward greater adoption included both availability in the lab sector and demand from oncology prescribers. Use in more than 70 US labs within the first 18 months of launch indicates that PD-L1 testing has a fast-track pattern of uptake in parallel with treatment recommendations (see Figure 4).

Guidelines and Studies

One of the issues with the fast-moving precision medicine market is that testing guidelines constantly lag behind the launch of new biomarkers. Academic centers will seek to integrate and embed PD-L1 testing into their routine approach, but the broader community of oncologists must rely on outdated guidelines and educational materials supplied by pharma companies, both of which often lag behind advances in innovation and adoption. To ensure that the lag time associated with precision medicine testing does not become any longer than necessary, pharma companies should conduct studies and gather the data needed to prepare for the next available round of guideline updates.

The adoption of PD-L1 testing is unlikely to be led by patients, as the market for human epidermal growth factor receptor 2 (HER2) testing has been for a number of years. In the late 1990s, when preparing to market its new monoclonal antibody cancer therapy, Herceptin (trastuzumab), Genentech understood the related testing ambiguities and formulated a single clear message: only HER2 receptor positive cancer will respond to Herceptin.

But so far, such clarity of messaging has eluded the companies that are developing anti-PD-1/PD-L1 therapies, with the result that patients are uncertain whether PD-L1 testing is needed. Complexities such as the discordance among various testing methodologies and confusing advertising strategies have contributed to this uncertainty.

The relative paucity of direct-to-patient communications from drug manufacturers has also had consequences, effectively preventing patients from easily understanding the importance and utility of PD-L1 testing. Without an understanding of the PD-L1 space, patients may feel that the testing process could limit their access to therapy, and especially that negative test results might block their access to emerging immunotherapies, which are being widely hailed as the next new superdrugs.

Future Disruption

When newly discovered biomarkers and new brands of drugs are being investigated, it is common for researchers to look at applications outside the primary indications for use. Such studies are often funded by and undertaken in collaboration with pharma sponsors. But in the case of PD-L1 testing, the investigator community has been starved of access to anti-PD-1/PD-L1 therapies outside of pharma-controlled clinical trials, leading researchers to study instead the relationships of PD-L1 testing to therapies involving much older drugs.

Among current clinical trials incorporating PD-L1 testing, a surprising 40%—a level not seen before—are not sponsored by industry, but have come directly from investigators. The main conferences of 2017–2019 are therefore likely to feature readouts of older drug data matched with PD-L1 patient status, further segmenting the therapy market.

There is some evidence, for example, that PD-L1 status may predict patient response to chemotherapy, and can be prognostic for patients treated with EGFR inhibitors.^5,6 Such study results suggest that PD-L1 testing may have utility beyond PD-L1 targeted therapies alone, and may drive the use of combination therapies. PD-L1 status could even migrate to become a prognostic marker by itself, reflecting the immunogenicity of the cancer.

Investigator-led studies that incorporate PD-L1 testing will certainly help to advance scientific knowledge in this emerging field. But such studies could also become a disruptive influence, offering approaches to the field that are not aligned with studies being sponsored by industry, and perhaps even publishing research results that contradict the findings of pharma-sponsored studies.

Such studies may also disrupt clinical guidelines—and the market planning of manufacturers—when they result in new data that refine understanding of how anti-PD-1/PD-L1 therapies work. Advanced studies can cause FDA and payors to reevaluate guidelines for the use of a therapy, as happened in the case of the EGFR inhibitor Erbitux (cetuximab) when retrospective studies determined that the drug was only effective for patients with wild-type (non-mutated) KRAS tumors. The new study data led to labeling changes and the requirement for KRAS testing prior to prescribing Erbitux.

Improving Therapy Outcomes

There has been a lot of discussion about the utility of first-generation tests for PD-L1, and especially about what the tests should be looking for in order to measure PD-L1 expression. The first test kits from Dako—now Agilent Technologies, Santa Clara, Calif—focused on assessment of PD-L1 expression on the surface (membrane) of tumor cells. By contrast, the test kit now offered by Ventana Medical Systems, Tucson, Ariz, a member of the Roche Group, is the first to evaluate patient PD-L1 expression using both tumor cell and tumor-infiltrating immune cell staining for PD-L1.

Our observation of laboratory practices in the United States has shown that PD-L1 tests are already being incorporated into biomarker panels for NSCLC—a practice that we expect will continue and increase. Most are performed as reflex tests, after an initial diagnosis of NSCLC. However, not all such tests can be performed using the same technology platform, and they may also use different antibody clones and testing protocols.

Exploration of next-generation sequencing (NGS) tests for patient PD-L1 status is already underway. The scientific literature has shown examples of how mutational loads can be investigated through the use of NGS technologies. Over the next 2 to 3 years, it is likely that studies will come forward to demonstrate the optimal way to measure PD-L1 expression using this technology.

In addition, the mutational landscape and immune microenvironment of the tumor (eg, cytokine levels, infiltration of immune cells) may also predict response to anti-PD-1/PD-L1 therapies.⁷ It is likely that researchers will develop more-precise testing algorithms incorporating these and other biomarkers, including the PD-1 ligand PD-L2. Together with its collaborator, Nanostring, Seattle, Merck is already looking into the application of ‘immune signatures’ in PD-L1 gene expression testing.⁸

Interdependence of Testing and Treatment

In the current state of test development, the results of PD-L1 testing can be affected by two confounding factors. First, the biology of PD-L1 expression is dynamic, depending on the patient’s status relative to the disease continuum. Compared with the results from patients with early-stage disease, the results from those with late-stage disease are likely to reveal higher levels of PD-L1 expression. Consequently, a patient’s travel along the disease and diagnostic continuum may become a key factor in selecting and shaping appropriate treatment regimens. This factor is less of an issue with earlier biomarkers such as EGFR or KRAS, which detect genetic mutations, but it may be an issue here because PD-L1 is an inducible biomarker, produced in response to environmental or other factors.

A second confounding factor is that a patient’s previous treatment can interfere with PD-L1 expression levels. Depending on how a patient’s tumor responds to therapy—or fails to respond—PD-L1 expression can vary, providing results that may lead to different decisions about treatment.⁹

The dynamism of PD-L1 expression is leading researchers to explore additional testing methods that can provide better results than a static biopsy can provide. Adopting a liquid biopsy strategy, for instance, may allow for continuous monitoring of PD-L1 levels on circulating tumor cells throughout the course of the disease.¹⁰

As better approaches and technologies for measuring a patient’s PD-L1 status are developed, we are likely to see ongoing improvements to existing test kits as well as new kits and new ways to interpret their results. For example, pathologists who formerly used first-generation IHC diagnostic tests are already undergoing training on the most recent testing technologies and related protocols.

Regardless of how test developers ultimately tackle the challenges of confounding factors for PD-L1 testing, our panel of experts believes that there is likely to be more PD-L1 expression testing rather than less, in part because of its increasingly recognized importance for multiple types of cancer.⁹

Test Labels and Nuanced Language

Indications for use of PD-L1 testing with first-generation anti-PD-1 therapies have already revealed different types of labeling, using nuanced language to reflect the applications supported by clinical testing. For instance, Merck treats the Agilent PD-L1 IHC expression test using antibody clone 22C3 as a companion diagnostic that is required to provide the patient’s status prior to initiation of therapy with Keytruda (see Figure 5).

By contrast, Bristol-Myers Squibb treats Agilent’s equivalent PD-L1 IHC expression test using antibody clone 28-8 as a complementary diagnostic for use with second-line patients—approved for use alongside anti-PD-1 therapy with Opdivo, but not required for the initiation of treatment. Roche has also entered the PD-L1 space, offering Tecentriq as a second-line treatment for metastatic NSCLC or metastatic urothelial carcinoma, and employing PD-L1 testing as a complementary diagnostic (see Figures 6, 7).

Prescriber understanding of the nuances involved in the labeling of PD-L1 tests seems to be something of a work in progress. In January 2016, when we asked the Diaceutics prescriber panel if they understood the different labeling terms used to describe and distinguish companion tests from complementary tests, 40% of the respondents indicated they did not have a clear understanding of the information. But in April 2016, when we asked the question again, the proportion of prescribers indicating that their understanding was still unclear was reduced to 33% (see Figure 8).

Test Choice and Availability in the Lab

The Diaceutics prescriber panel supported the observation that laboratories’ decisions about the type of PD-L1 tests they will make available could represent a disruptive influence over the market for anti-PD-1/PD-L1 therapies. If a lab chooses to make available only one test for PD-L1, prescriber choices may be correspondingly limited by the labeling requirements of the drug.

Commercial kits with FDA approval are playing an important role in priming the market for PD-L1 testing. However, most labs do not offer all of the commercial PD-L1 tests available in the marketplace, and many have leaned toward developing their own laboratory-developed tests (LDTs). Of the 70-plus labs that have adopted PD-L1 testing, the majority also offer an LDT option.

As has been the case for many other biomarkers, however, each lab will decide for itself which are the best tests for it to make available on a permanent basis. One consideration that is likely to be on the minds of lab directors—but is often ignored by pharma companies—is what the laboratory’s profit margin will be if it chooses to make available one test over another. Since pharma manufacturers of anti-PD-1/PD-L1 therapies have a vested interest in the results of testing for the PD-L1 biomarker, labs may find that they have some leverage to negotiate more-lucrative financial arrangements if they offer particular tests over other alternatives. In consideration of such influences over the selection of which tests to offer, labs may find that the evolution of PD-L1 testing methodologies may be more dynamic than was the case with tests for older biomarkers.

Testing for PD-L1 Negative Status

It is exciting to see new immunooncology and breakthrough therapies arriving to address unmet clinical needs related to the PD-L1 biomarker. As the market for anti-PD-1/PD-L1 therapies becomes increasingly crowded—as will certainly be the case for NSCLC therapies by 2018—segmentation of the market is likely to become the competitive byword.

The dynamic nature of the PD-L1 space shows the need to identify patient segments that will be worthy of these newly emerging drugs, whether in monotherapy or in combination with other drugs. PD-L1 testing will be particularly important to this task of segmentation, especially in light of market competition and the potential for certain incentives to steer the selection of testing.

Conclusion

Our real-time observation of the unfolding PD-L1 testing market revealed a number of sometimes opaque issues related to the integration of novel biomarker testing with treatment pathways and drug launch programs. Although it has been nearly 20 years since the launch of the first truly targeted cancer drug and companion biomarker—Herceptin and HER2—we are still suffering from the absence of attention to prelaunch market development for critical biomarkers.

Most of the issues that are detectable in the PD-L1 testing space have also been seen in previous biomarker programs. However, this is the first opportunity that analysts have found to conduct real-time scrutiny in order to track and understand the clinical and competitive impact of such tests as they come to market. The anti-PD-1/PD-L1 therapy class of drugs is slated to achieve $33 billion in annual revenues in 2022. But capturing much of this expected revenue will rely on appropriate application of PD-L1 testing—a field that remains significantly underdeveloped and underpowered to support all that is hoped for anti-PD-1/PD-L1 therapies.

Peter Keeling is CEO and Ewelina Golebiewska, PhD, is associate director at Diaceutics, Dundalk, Ireland. For further information contact CLP chief editor Steve Halasey via [email protected].

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