The foundations of personalized medicine are built on the premise that laboratory tests can accurately predict the response of individual patients to a particular treatment. Herceptin ® and the HercepTest ®, which is used to select patients with human epidermal growth factor receptor (HER2)-positive breast cancer, are rightfully the jewels in the crown of this new treatment paradigm. Although over 8 years have past since their joint approval, there remain ongoing concerns about the quality of HER2 testing in community pathology laboratories. The development of predictive epidermal growth factor receptor (EGFR) tests for treatment with Tarceva ®, Iressa ® and Erbitux ® has proven more difficult due to the complex biology of the target. It has also exposed some of the business challenges of co-developing both a drug and a companion diagnostic test. This article describes Genentech's experience of developing predictive tests for HER2 and EGFR and highlights the need for close collaboration between all parties involved in incorporating predictive diagnostic tests into clinical trials and clinical practice.