2014: The Year of Personalized Medicine

Advances in biotechnology have changed the way we think about drug development and drug targeting. With antibodies that can act on selected targets with extreme specificity, it's now more possible than ever to treat individual patients with drugs tailored for their disease. That is particularly the case for cancer, where 2013 saw an explosion in immunotherapy treatments that stomp out tumors without blindly flooding the body with chemotherapy. But with all these clinical tools in hand, how can doctors get a quick snapshot of the patient's condition to know which drug is the correct drug? That void leaves plenty of room for a range of other technologies -- Illumina's (NASDAQ: ILMN  ) gene sequencing, Qiagen's (NASDAQ: QGEN  ) companion diagnostics, and athenahealth's (NASDAQ: ATHN  ) electronic medical records-to bring personalized medicine squarely into the clinic.

Genomes for everyone?
We're only a few weeks into 2014, and already Illumina is making the case that this will be the year of personalized medicine. On January 14, the company unveiled a new addition to its line of gene sequencing products. The new machine, HiSeq X, will usher us into the age of the $1,000 genome, only 24 years after the Human Genome Project secured its first round of funding from the National Institutes of Health.

While $1,000 sounds relatively inexpensive, the $10 million price tag for the suite of devices puts the system out of reach for practical use in the clinic. That means most patients won't get a peek at their genetic code just yet. As Fool Maxx Chatsko points out, though, the development will revolutionize the way we think about drug development, and suggests that innovation in the industry is still chugging along. High throughput gene sequencing could bring population studies of risk factors for cancer, Alzheimer's, diabetes, and more to the forefront of research.

In the meantime, Illumina's MiSeqDx Instrument is much better suited for clinical use and is the only FDA approved in vitro next generation sequencing diagnostic tool. It won't put the genome at your fingertips just yet, but enables clinicians to sequence select genes for personalized genetic diagnosis.

Companion diagnostics
Sometimes a complete sequence of the genome is overkill. In many cases, doctors can narrow their search for genetic maladies down to a handful of genes. In those cases, patients benefit greatly from diagnostics engineered for specific diseases, especially when the genetic signature can dictate more targeted treatment options. Illumina is one player in this space, and recently struck up a deal with Amgen to develop a test that identifies patients that could benefit from Amgen's cancer drug Vectibix.

Qiagen is a much more established maker of molecular diagnostics for personalized health. The producer of laboratory equipment and consumables brought in 51% of its revenue from molecular diagnostics products in the third quarter of 2013, an 11% increase year over year. That growth is aided by Big Pharma partnerships with Boehringer Ingelheim, Eli Lilly, and Bristol-Myers Squibb for its therascreen brand of oncology diagnostics. Qiagen would do well to foster those relationships to expand its therascreen platform as cuts to academic research spending force the company to shift its business focus. Look for the diagnostics division to drive growth for Qiagen, especially as it adopts next generation sequencing to compete with Illumina.

Putting it all in the cloud
The expanding use of genetic and molecular diagnostic tools means that clinicians will have more data at their fingertips than ever before. That data has to go somewhere. It has to be sorted, compiled, and accessed in accordance with HIPAA protections. Sounds like a job for the cloud.

Athenahealth is rapidly becoming one of the most influential players in the electronic health record, or EHR, space. What differentiates it from competitors like Epic Systems is its focus on the cloud. By offering electronic services for medical records, patient outreach, and claims processing through the cloud, athenahealth presents a convenient opportunity for small practices to transition to EHRs without the infrastructure and software demands of other EHR servers. Now with the addition of the Epocrates database of drug and disease information, Athena is developing a unique ecosystem of logistical support for medical providers.

Of athenahealth's several cloud-based services, athenaClinicals is the most related to personalized medicine, and grew subscribers at an impressive 55% clip in the last year. athenaClinicals, which integrates clinical data from practitioners, imaging centers, labs, and other health care players, allows providers to seamlessly treat patients and eliminate redundancies or inefficiencies in health records. That kind of integration means better organization and execution of patient treatment plans, and increased connectivity for small and large providers alike.

The bottom line
An interesting consequence of cancer immunotherapy is that newer innovations help fewer patients. That's because new drugs target specific diseases so precisely that doctors have many more personalized treatment options. Those options require sophisticated diagnostic technology, which presents an interesting alternative investment idea as personalized medicine becomes the norm.

Game-changing biotech stocks to watch today
These new diagnostic and logistical tools will help doctors address the specific needs of patients much more efficiently, especially when it comes to exciting new cancer therapies. In the Motley Fool's brand-new FREE report "2 Game-Changing Biotechs Revolutionizing the Way We Treat Cancer," find out about a new technology that big pharma is endorsing through partnerships, and the two companies that are set to profit from this emerging drug class. Click here to get your copy today.


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