Five and a half years after its decision to spin off its pharmaceutical business and a year and a half away from having the US Supreme Court break its monopoly on BRCA gene testing, Myriad Genetics is no longer an exception among molecular diagnostics companies. It must find its way along a more crowded path.

A handful of companies are pursuing predictive genetic tests for evaluating psychiatric drugs. The need is apparent, and an early success could trigger a rapid shift in thinking about the sustainability of building a business around biomarkers in a therapeutic area sometimes considered the least likely to benefit near term from their development. That said, firms in this area--and elsewhere--must be wary of leaning too heavily on pharma companies as supportive partners.

Inverness Medical Innovations and Beckman Coulter are currently in a bidding war for Biosite and its point of care BNP test. The fight is just one example of the demand for innovative diagnostic test content. The recent upswing in IVD deal-making, along with renewed VC interest in diagnostics, suggests that the area's potential to drive health care innovation by directing therapy more efficiently is finally being recognized.