Companion Diagnostics For Targeted Therapies Market is expected to reach USD 15.1 billion by 2031

Companion Diagnostics for Targeted Therapies Market Trends & Forecast

According to a research study published by Knowledge Sourcing Intelligence (KSI), the companion diagnostics for targeted therapies market will expand from USD 8.1 billion in 2026 to USD 15.1 billion in 2031 at a CAGR of 13.3% during the forecast period.

The growth of the companion diagnostics-targeted therapies market in 2025 comes primarily from expanded regulatory approval and an increase in drug companion diagnostic test co-approvals granted by the Food and Drug Administration (FDA). As of the beginning of 2025, over 78 drug-companion diagnostic combinations (CDx) have received FDA approval, reflecting a continual shift to biomarker-driven treatment pathways. Recently approved targeted oncology drugs are often launched together with an accompanying companion test to help identify patients eligible for treatment. For example, genomic tests are now routinely used to determine a patient’s EGFR, HER2 or ESR1 mutation status before administering targeted therapies.

The FDA maintains an up-to-date list of all devices cleared or approved for use as companion diagnostics and continues to add CDx across various cancer types. In 2025, various policy developments (e.g., proposed reclassifications of certain molecular CDx as Class II devices) are anticipated to facilitate faster approvals and enhance clinical acceptance of these products within the marketplace.

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Companion Diagnostics For Targeted Therapies Market Report Highlights

• The U.S. Food and Drug Administration reported that by 2025, more than 78 drug–companion diagnostic combinations had been approved, reflecting a strong shift toward biomarker-linked therapies. This trend shows how targeted treatments are increasingly dependent on validated diagnostic tools to guide patient selection and improve clinical outcomes.

• The FDA’s official database of approved companion diagnostics continues to expand, with regular additions across oncology indications such as lung, breast, and colorectal cancers. This growing pipeline highlights sustained regulatory activity and increasing integration of diagnostic tools directly into therapeutic decision-making frameworks.

• In 2025, several oncology drug approvals were accompanied by simultaneous authorisation of genomic companion tests, particularly for mutations such as EGFR and HER2. This pattern indicates that co-development of drugs and diagnostics is now a standard regulatory expectation rather than an exception.

• Regulatory developments in 2025 include proposals by the FDA to reclassify certain molecular companion diagnostics to Class II devices, supported by existing evidence. This shift is expected to streamline approval timelines, reduce regulatory burden, and accelerate broader clinical access to precision medicine solutions.

Companion Diagnostics For Targeted Therapies Market Growth Drivers and Restraints

Growth Drivers:

• Expansion of biomarker-linked drug approvals: Driving growth through the expansion of approved drugs with linked companion diagnostics (CDx) will help support the further adoption of CDx's. The FDA integrated companion diagnostics as part of drug approval processes in 2025, with more than 78 approved drug/CDx combinations; the agency and most oncology products will require specific biomarker validation to be prescribed. This is indicative of an actual shift in the paradigm surrounding therapies - these medicines are no longer generally prescribed, but specifically prescribed to genetically defined patient populations. The regulatory approval process for CDx is also showing the increasing rate of biomarker inclusion within drug labels (EGFR, HER2, KRAS), and the linkage of diagnostic testing to treatment eligibility. Due to this new era of co-development, the demand for CDx will increase as every new targeted therapeutic product will require it

• Increasing regulatory standardization of CDx pathways: Driving growth through the increased standardization of regulatory pathways for companion diagnostics (CDx) will improve the wider adoption of CDx products. The FDA has put forth regulatory reforms by 2025, which will allow for the reclassification of some molecular diagnostics from a Class III to a Class II device. The reclassification is based on the substantial evidence and experience from the previous approvals of the same assays. The change will provide a reduced premarket approval burden and a quicker time frame for completing the review process for new CDx. In addition, government documentation does illustrate that the accelerated use of Breakthrough Designation Status by the FDA will increase the number of patients who have access to treatment using a molecular diagnostic device for use in treating serious illnesses. All of these changes will have a direct impact on reducing the number of barriers to entry for new developers of CDx products. As a result, there will be an increased number of approved tests and a stronger overall pipeline of therapies associated with the use of targeted therapies.

Restraints:

• Limited applicability due to biomarker specificity: Despite regulatory progress, government clinical data shows that many targeted therapies are approved only for small biomarker-positive populations, sometimes below 10–15% of total patients in a disease category. This restricts testing volumes and commercial scalability, as companion diagnostics are inherently dependent on narrow patient subsets defined by specific genetic mutations.

Companion Diagnostics For Targeted Therapies Market Key Development

• Product Launch: In September 2025, Myriad Genetics, a player in molecular diagnostics and precision medicine, and SOPHiA GENETICS, revealed a strategic partnership aimed at designing and offering pharma companies a global liquid biopsy companion diagnostic (CDx) test.

• Collaboration: In June 2025, Qiagen announced an official global collaboration with Incyte to develop a novel companion diagnostic panel for patients with mutant CALR-expressing myeloproliferative neoplasms (MPNs), a group of rare blood cancers. Under the agreement, QIAGEN will build an NGS-based multimodal panel to detect clinically relevant gene alterations, with validation on the Illumina NextSeq 550Dx platform. This companion diagnostic is intended to support Incyte’s investigational therapies such as INCA033989, guiding treatment decisions for patients with MPNs by identifying key biomarkers associated with disease progression and eligibility for targeted therapy. The collaboration underscores the expanding role of comprehensive genomic profiling in precision oncology and the importance of tailored diagnostic tools that match patients with emerging targeted treatments.

Companion Diagnostics for Targeted Therapies Market Segmentation

Knowledge Sourcing Intelligence has segmented the companion diagnostics for targeted therapies market based on component, technology, application, and region:

Companion Diagnostics for Targeted Therapies Market, By Component

• Assays, Kits & Reagents

• Instruments

• Software & Services

Companion Diagnostics For Targeted Therapies Market, By Technology

• Polymerase Chain Reaction (PCR)

• Next-Generation Sequencing (NGS)

• Immunohistochemistry (IHC)

• In Situ Hybridisation (ISH)

• Gene Expression Profiling

Companion Diagnostics for Targeted Therapies Market, By Application

• Oncology

• Cardiology

• Neurology

• Infectious Diseases

Companion Diagnostics for Targeted Therapies Market, By Region

• North America

  • USA

  • Canada

  • Mexico

• Europe

  • United Kingdom

  • Germany

  • France

  • Spain

  • Others

• Asia Pacific

  • China

  • India

  • Japan

  • South Korea

  • Indonesia

  • Thailand

  • Others

• South America

  • Brazil

  • Argentina

  • Others

• Middle East and Africa (MEA)

  • Saudi Arabia

  • UAE

  • Others

Companion Diagnostics For Targeted Therapies Market Key Players

• Roche Diagnostics

• Abbott Laboratories

• Thermo Fisher Scientific

• Agilent Technologies

• Qiagen

• Illumina

• Danaher Corporation

• Bio-Rad Laboratories

• Myriad Genetics

• Hologic