Clinical Liquid Biopsy Explained: Applications, Techniques .

Executive InsightsVolume XX, Issue 3Clinical Liquid Biopsy Explained: Applications,Techniques and PlayersA minimally invasive diagnostic that can helpclinicians detect, diagnose and manage cancerpatients has long been the dream of manyhealthcare practitioners. Over the past fewyears, highly sensitive molecular technologies —primarily Next Generation Sequencing (NGS) anddigital PCR (dPCR) — have enabled researchersand clinicians to detect the presence of cancergenomic material (circulating tumor DNA orctDNA) in peripheral biofluids, such as blood.Alas, the field known as liquid biopsy was born on the backsof these novel molecular technologies. But liquid biopsy is notlimited to ctDNA, and may include detection of other cancerderived particles, including exosomes harboring tumor RNA andcirculating tumor cells (CTCs).Despite all the press and hype, the term “liquid biopsy” is oftenused without a precise understanding of its different applicationsand technological approaches. In this Executive Insights, we layout the key clinical applications, describe the various liquid biopsytechnologies and highlight key companies that are turning thisdream into reality.Liquid biopsy applications span the entire cancerpatient journeyLiquid biopsies’ potential clinical applications are broad andspan the entire cancer patient journey — from screening healthyindividuals in hopes of detecting cancer early, all the way throughprofiling resistance to targeted therapies in late-stage treatedcancer patients (see Figure 1).While therapy guidance is the leading application today,monitoring and early detection are expected to represent themost sizable and impactful applications in the future. Earlydetection has the potential to downstage cancer detection,enabling definitive intervention (e.g., full tumor resection),and could become a routine part of health checks, similar tomammograms and colonoscopies. Monitoring applications aremyriad and have the potential to reduce the current dependenceon imaging, as well as potentially detect recurrence or resistanceearlier than traditional approaches, again enabling earlierintervention or changes in management.In aggregate, analysts estimate the market potential for liquidbiopsy applications to represent tens of billions of dollars, makingliquid biopsy one of the most scalable opportunities diagnosticcompanies have encountered in decades.Multiple liquid biopsy techniques existCentral to liquid biopsy techniques is the capture and analysisof tumor-derived particles, which may include nucleic acids,Clinical Liquid Biopsy Explained: Applications, Techniques and Players was written by Alex Vadas and Brian Baranick,Managing Directors in L.E.K. Consulting’s Biopharma and Life Sciences practice. Alex and Brian are based in Los Angeles.For more information, contact lifesciences@lek.com.

Executive InsightsFigure 1Liquid biopsy applicationsPatientjourneyLiquid biopsy applicationScale -stagediseaseEarly detectionRoutine screen for presenceof cancer-derived particles inhealthy individualsLarge patientbase (100M )Low-costrecurring testTest to inform diagnosis insuspected cases (e.g., pelvicmass, lung nodule) 100MsPrognosticSingle test to supportprognosisModerate cost,one-time testInterventionoutcomemonitoring /MRDTest to track response tointervention or detectminimal residual disease(surgery, radiation, adjuvanttherapy)Surveillanceand recurrencemonitoringLongitudinal monitoring ofremission patients to detectrecurrence earlierTherapyguidanceTests, including companiondiagnostics and panels toinform therapy decisionsMonitoringLongitudinal test to monitorresponse or resistance totherapyDiagnostic aidNiche patientbase (100K) 1BsLarge prevalentpool (10Ms)Low-cost,recurring testLate-stage /metastaticdiseaseEarlier interventionDefinitive localized therapySmall patient pool(100Ks)High-cost,one-time testSupports diagnosis in biopsyconstrained situationsLarge clinical trials / HECON (start in enrichedpopulations)Tissue-based testing is gold standardDiagnoses metastatic diseaseInforms aggressiveness ofinterventionTissue-based testing is gold standardLower cost / risk to imagingDisplace imaging with compellingcost / benefit dataEarly detection and intervention(many recurrences aremetastatic today)Demonstrate ability to downstage recurrencedetection and improve patient outcomesEnables personalized medicinein biopsy-constrained situationsIncreases predictability ifheterogeneous cancer ormetastatic disease 100MsSmall patientpool (100Ks),moderate costrecurring testTumor localizationLow-cost testReduced imaging(cost / toxicity) 100MsChallengesRare-event detection with low false-positive rate 10BsReduced imaging(cost / toxicity)Displace imaging with compellingcost / benefit dataTissue-based testing is gold standardUnclear potential in immuno-oncology wheretumor microenvironment is importantDemonstrate ability to achieve improved patientmanagement / outcomesDisplace imaging with compellingcost / benefit dataSource: L.E.K. analysisproteins, exosomes, nucleosomes and cells. Since tumors divide,die, communicate and migrate, it is possible to find traces of theirexistence in biofluids. However, since these tumor-derived particlesare typically rare, analytical approaches require very high sensitivity(NGS or digital PCR) or upfront enrichment (e.g., CTC cell capture).There are multiple technologies used in liquid biopsy (enrichmentand analysis), and it appears diverse approaches (andcombinations thereof) may be required to address the breadthof potential applications (see Figure 2). Among all techniques,the combination of deep sequencing circulating tumor DNA or“ctDNA” using next-generation sequencing (NGS) representsthe majority of current activity, but targeted (qPCR, digital PCR)approaches to measuring ctDNA are also being leveraged.Beyond ctDNA, there is also significant activity in capturingand analyzing exosomes (vesicles involved in cell messaging),nucleosomes (chromosomal DNA packaging units) and circulatingPage 2 L.E.K. Consulting / Executive Insights, Volume XX, Issue 3tumor cells (CTCs), as these contain a broader selection of tumorderived analytes — including DNA, RNA and proteins — and maybring deeper insight into cancer biology versus ctDNA alone.While not based on detecting tumor-derived particles, capturingand analyzing immune cells is also emerging as a complementarytechnique in liquid biopsy and may be relevant in early cancerdetection, as well as in guiding and managing patients onimmunotherapy.The competitive landscape is broad and dynamicTo date, we have identified over 30 different liquid biopsycompetitors (see Figure 3). And while each competitor mayhave unique differentiators and offerings, we have attemptedto categorize them into distinct segments based on a mix oftechnique/technology and current application focus.Differentiation in the nascent clinical liquid biopsy space todayappears to be driven by a mix of technology (e.g., sequencingINSIGHTS@WORK

Executive InsightsFigure 2Overview of liquid biopsy techniquesctDNATargetanalyteCirculating tumor DNA that spills intobloodstream with tumor cell division / deathParticles (exosomes and nucleosomes)Particles containing cancer-derived moleculesincluding exosomes and nucleosomesExosomes are vesicles involved in cell messagingNucleosomes are complexes formed in chromosomalDNA packagingCells (CTCs and immune cells)Circulating tumor cells that slough into bloodfrom tumorsMay also include peripheral immune cells toidentify cancer-driven immune responseInclude broad coverage of cell components withina single cell (DNA, RNA, proteins, structure)Increasing analyte class coverageIsolationapproachesNucleic acid sample prep kits optimized forcell-free DNA isolationAnalyticalapproaches*Molecular (NGS, qPCR, etc.)*Highly abundant (correlated with tumor size)ProsValidated isolation methodsCovers genetic heterogeneityNGS alignedConsDNA fragmentation limits some applications(e.g., whole genome, DNA macro structure)Physical separationPhysical separationImmunoaffinityImmunoaffinityPolymeric precipitationDirect istology / imagingHighly abundantCovers genetic heterogeneityRNA captureFragmented nucleic acids limit some applicationsChallenging to isolate tumor-specific exosomesBroadest analysis possibleMay not represent heterogeneityRare / hard to capture cells in quantity forensemble analysisLack of consensus on isolation methodsNote: *Molecular includes NGS, digital PCR, qPCR; proteomic includes immuno-diagnostics and mass spec; histology / imaging includes IHC, FISH and other imaging-basedapproaches.Source: L.E.K. analysischemistry, cell capture technology and informatics) andinvestment in clinical trials/data to support utility. Commercialdifferentiation is minimal as few companies have reached thescale where this represents a meaningful differentiator. Theintellectual property landscape is also dynamic and expected tosupport company differentiation in the future.Looking across the competitive landscape, we define thefollowing clusters:Early detection using ctDNA. Probably the most excitingsegment (given its potential to impact health screening in thegeneral population) includes various players seeking to developofferings in early cancer detection and screening.Competitors in this segment are expected to differentiate withclinical data to support test utility. Clinical studies for the generalscreening population are likely to be massive ( 100K patients) inscale and require significant longitudinal analysis.Grail is the poster child in the early detection space, havingraised 1 billion in VC funding and recently embarked on a120,000-patient study for early breast cancer detection. ManyPage 3 L.E.K. Consulting / Executive Insights, Volume XX, Issue 3others are eyeing the early detection space, and some may easetheir way into the general population applications through trialsin at-risk patients, or as a reflex to other screening methods (e.g.,low-dose CT, fecal occult blood).Therapy guidance using ctDNA. This segment is the mostcrowded and is seeing actual clinical application today inmetastatic patients. There is a core group of players deployingNGS-based liquid biopsy panels to support therapy guidancein biopsy-constrained situations. The clear front-runner here isGuardant Health, but many other competitors — several of whichalso play in the solid-tumor panel NGS space (e.g., FoundationMedicine, Personal Genome Dx) or have some differentiatingtechnology enabling higher sensitivity or smaller sample inputamounts — are also present.Many traditional oncology diagnostics companies (e.g., Roche,Qiagen) have targeted single-gene tests based on PCR in thetherapy guidance space, including regulated kits for companiondiagnostic biomarkers such as EGFR. Players in this space are alsolikely to transition into monitoring applications for tested patients(looking at resistance or recurrence in treated metastatic patients).INSIGHTS@WORK