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The global companion diagnostics market size was valued at USD 6.80 billion in 2021. The market is projected to grow from USD 7.67 billion in 2022 to USD 15.91 billion by 2029, exhibiting a CAGR of 11.0% during the forecast period. The global COVID-19 pandemic has been unprecedented and staggering, with companion diagnostics experiencing lower-than-anticipated demand across all regions compared to pre-pandemic levels. Based on our analysis, the global companion diagnostics market exhibited a growth of 1.5% in 2020 as compared to 2019.
Companion diagnostic is a test used for the safe and effective application of a corresponding biological product or drug. Generally, these tests are used in the diagnosis of cancer. In this, as per the biomarker identified, a suitable drug is suggested. These tests provide individualized treatment based on the response of a specific patient.
The rising prevalence of cancer globally is increasing the adoption of these tests, thereby propelling the growth of the market. Combined with this, regulatory approvals of these tests for different indications are estimated to boost the overall market.
Decline in the Number of Tests Performed during COVID-19 Owing to Lower Diagnosis of Cancer
The emergence of COVID-19 has impeded the demand for companion diagnostics. Also, key players operating in the market recorded a significant decline in revenues due to the COVID-19 pandemic owing to a decrease in the volume of testing and other factors. In terms of revenue, the market witnessed a slower growth of 15.1% in 2020 compared to 19.8% in 2019.
The major players witnessed a significant decline in revenue generated during 2020. For instance, Myriad Genetics, Inc. registered a decline of around 34.5% in revenues generated from molecular diagnostics in 2020 compared to 2019. Also, in 2020, Abbott Laboratories reported a decline of 4.0% in the revenues generated from core laboratory diagnostics compared to 2019.
However, revoking lockdown restrictions, stay-at-home orders in many countries, launches of novel diagnostics tests, and re-establishing the supply chain network were key factors responsible for the recovery of testing in 2021. Therefore, the resumption of cancer diagnostics testing & new diagnostic test launches positively impacted the demand in 2021.
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Advances in Next-Generation Sequencing to Propel Market Progress
Clinicians use the Next-Generation Sequencing (NGS) technique to test the number of genes responsible for cancer development; this test is performed on the surgically removed patient’s tumor. NGS technique provides high output within a specific interval of time and technological advancements are developing for this technique. For example, according to an article published by the Centers for Disease Control and Prevention (CDC), next-generation sequencing has transitioned from research to clinical use during the past five years.
Moreover, key players are introducing technologically advanced testing solutions in the market. Hence, advancements in next-generation sequencing to detect genetic abnormalities, helpful in treating specific diseases, are one of the new companion diagnostics market trends.
Increasing Prevalence of Cancer to Augment Market Growth
The prevalence of cancer is increasing significantly in recent years. The growing prevalence of cancer cases increases the need for effective CDx assays as genomic testing provides a clear picture of patients' tumors and offers precise insights to doctors about treatment protocols. Thus, the increasing prevalence of cancer is increasing the sales of products of CDx.
Moreover, to fulfill an increasing need, novel tests are being developed to diagnose specific types of mutations.
This factor has led to global demand for these tests and is responsible for the market’s growth during the forecast duration.
Regulatory Approvals of New Tests for Different Indications to Stimulate Market Growth
The companion diagnostics industry is witnessing a significant number of new product approvals. As the number of new products approved is increasing, it is resulting in the adoption of several tests, thereby augmenting the market growth. Moreover, key manufacturers focus on the development of novel tests that lead to the companion diagnostics market growth. For instance, in May 2022, Illumina received CE approval for its TruSight oncology (TSO) comprehensive test. This kit assesses multiple tumor biomarkers to identify specific molecular profiles of a cancer patient. Also, in May 2022, Agilent Technologies Inc. received approval for its PD-L1 IHC 22C3 pharmDx, a qualitative immunohistochemical assay. This assay is used to identify cervical cancer patients, in which KEYTRUDA (anti-PD-1 therapy) may be an appropriate treatment option. Hence such factors will strongly support market growth.
Incompetent Reimbursement Scenario and Stringent Regulatory Framework to Restrict Market Growth
Despite increasing acceptance, there is a lack of a standardized method to set the reimbursement rate for a companion diagnostic test. Reimbursement is set on a case-to-case basis.
Moreover, there is a lack of a standard regulatory framework for companion diagnostics (CDx). There are a number of challenges involved in the clinical development and regulation of companion diagnostics (CDx), which plays an important role with respect to sensitivity and specificity while making a therapeutic decision.
Generally, suitable reimbursement policies & regulations are the key factors responsible for the adoption of devices. Hence, the lack of reimbursement and stringent regulations hinder the possible global adoption and thereby market’s growth during the forecast duration.
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Polymerase Chain Reaction Segment to Dominate Backed by Launch of New Products & Regulatory Approvals
Polymerase chain reaction technology dominated the market share in 2021, owing to the introduction of new PCR kits by the key players such as QIAGEN N.V. and Thermo Fisher Scientific Inc. In May 2021, QIAGEN N.V. announced the launch of the therascreen KRAS RGQ PCR Kit. This test kit assists in identifying non-small cell lung cancer (NSCLC) patients eligible for the treatment with LUMAKRAS, a new therapy developed by Amgen Inc.
In March 2021, Thermo Fisher Scientific Inc. announced the launch of QuantStudio 5 Dx Real-Time PCR System which will give enhanced and accurate results to laboratory procedures and will help to maintain the molecular diagnostic workflows. Thus, launches of new products and regulatory approval led to the dominance of the segment in the market.
Increasing Prevalence of Cancer and the Emphasis of Key Players on Innovative Technology Development Led to the Dominance of the Segment
In terms of indication, the cancer segment is anticipated to exhibit a dominant companion diagnostics market share due to increasing prevalence of cancer and key players' focus on innovative technology to develop advanced tests for cancer drugs. Also, the number of biomarker assays used for targeted cancer drugs is increasing.
The neurology segment is estimated to grow at the highest CAGR due to the progression of Central Nervous System (CNS) disease such as Schizophrenia, Parkinson’s, and Alzheimer’s; this provides the opportunity to use precision medicine and companion diagnostic devices for better diagnostic tools.
Collaborations with Manufacturers Leading to the Significant Share of the Pharmaceutical & Biopharmaceutical Companies Segment
Pharmaceutical & biopharmaceutical companies generated the highest revenue in the market in 2021. Collaborations with companion diagnostic manufacturers led to the dominance of this segment.
Moreover, pharmaceutical & biopharmaceutical companies segment is estimated to grow at the highest CAGR during the forecast period owing to new product launches and technological advancements globally. These companies are continuously involved in the development of companion diagnostics tests for several indications.
North America Companion Diagnostics Market Size, 2021 (USD billion)
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North America generated a revenue of USD 2.35 billion in 2021. The region's dominance is attributed to a higher prevalence of cancer and other chronic conditions along with rising adoption of advanced CDx assays in the region.
On the other hand, Europe is anticipated to be the second-most prominent region in terms of revenue in 2021 globally. The growth in this region is attributed to an increase in collaboration between pharmaceutical companies and companion diagnostic manufacturers in the area.
Asia Pacific is projected to grow at the highest CAGR during the forecast period. This factor is attributed to the rising prevalence of cancers, improving healthcare infrastructure, and the growing number of medical device companies developing diagnostic products for the treatment.
The market in Latin America and the Middle East & Africa is estimated to grow at a slower pace compared to Asia Pacific. Partnerships between key players and hospitals for the expansion of precision oncology diagnostic labs, providing extensive genetic testing to cancer patients, are estimated to be one of the major market drivers in the region.
F. Hoffmann-La Roche Ltd, Agilent Technologies, Inc., and Abbott Account for a Dominant Share in Terms of Revenues
F. Hoffmann-La Roche Ltd, Agilent Technologies, Inc., and Abbott are leading players in the market due to new product launches and the acquisition of competitive players. Furthermore, robust investment in research activities to develop a portfolio of superior treatment solutions has enabled the company to hold a leading position in the market.
Moreover, the market is further characterized by many small manufacturers in emerging nations focusing on developing relatively lower-cost products. Other key players offering a wide range of CDx involve Illumina, Inc., Guardant Health, Thermo Fisher Scientific Inc., BIOMERIEUX, QIAGEN, Myriad Genetics, Inc., and Sysmex Corporation. Illumina, Inc. partnered with leading biotechnology companies to develop companion diagnostics for best-in-class therapeutics. For instance, Illumina, Inc. partnered with Loxo Oncology for the development of next-generation sequencing-based companion diagnostics. Also, bioMérieux created a program to work with pharmaceutical and medical device companies.
An Infographic Representation of Companion Diagnostics Market
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The research report elaborates on the global market dynamics and competitive landscape. The report presents various key insights, the prevalence of cancer in key countries, new product launches by key players, key mergers, acquisitions, and partnerships, the impact of COVID-19 on the market, the competitive landscape, and company profiles.
Value (USD billion)
By Technology, Indication, End-user, and Region
Fortune Business Insights says that the market was valued at USD 6.80 billion in 2021 and is projected to reach USD 15.91 billion by 2029.
In 2021, the market was valued at USD 6.80 billion.
Growing at a CAGR of 11.0%, the market will exhibit steady growth in the forecast period (2022-2029).
The polymerase chain reaction segment is expected to be the leading segment during the forecast period.
The increasing prevalence of cancer worldwide will drive the market's growth.
F. Hoffmann-La Roche Ltd, Agilent Technologies, Inc., and Abbott are the top players in the market.
North America is expected to hold the highest market share.
Asia Pacific is expected to grow at a higher CAGR over the forecast period in the market.
Launch of new tests would drive the adoption of the product in the forthcoming years.
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