Merck (NYSE: MRK) and Roche are best buds now.

Last month, the two teamed up to take on Vertex Pharmaceuticals (Nasdaq: VRTX) and Johnson & Johnson (NYSE: JNJ) in the hepatitis C drug wars.

And now Merck and Roche have entered a pact to develop companion diagnostics for Merck's cancer drugs. The details were a bit sketchy -- no mention of which drugs, let alone financial details -- but the partnership certainly sounds good in theory.

Cancer drugs, more than any other therapeutic area, are moving toward a more personalized regimen. Patients' tumors contain different types of mutations that make them more or less susceptible to killing by certain drugs. For instance, patients only respond to Roche's Herceptin and GlaxoSmithKline's (NYSE: GSK) Tykerb if they have elevated levels of the HER2 protein, since the drugs target the HER2 protein specifically. Diagnosing those changes is critical to treating a patient with the right medication.

It's also critical to figure out those changes before a patient enters a clinical trial. If a drugmaker only enrolls patients who will respond to the drug, it'll show a greater average effect, and make it easier to gain Food and Drug Administration approval.

Partnering with a diagnostic company early in development is the best way to go. Merck already has a deal with Roche to use its investigational AmpliChip p53. Similarly, GlaxoSmithKline has enlisted the help of Abbott Labs (NYSE: ABT) to develop a diagnostic for its cancer vaccine MAGE-A3 ASCI.

At some point, DNA sequencing will become cheap enough that individual diagnostics won't be used. Anyone with cancer will just have the tumor DNA sequenced in order to determine which drug is appropriate. Until that happens, though, Roche's diagnostic techniques such as array and immunohistochemical -- measuring the amount of protein with an antibody -- will suffice.

I'm not sure Roche brings anything to the table that other companies with diagnostic divisions couldn't do, but since the two already had a small partnership in diagnostics and are now partnered in hepatitis C, the relationship feels right.

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Fool contributor Brian Orelli holds no position in any company mentioned. Click here to see his holdings and a short bio. The Motley Fool owns shares of Abbott, Johnson & Johnson, and GlaxoSmithKline. Motley Fool newsletter services have recommended buying shares of Vertex Pharmaceuticals, GlaxoSmithKline, Abbott, and Johnson & Johnson. Motley Fool newsletter services have recommended creating a diagonal call position in Johnson & Johnson. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.