Drug discovery technologies
The revolution in the drug discovery process is driven by the belief that proteomics will facilitate a better understanding of the basic processes of life and thus deliver a substantially higher number of drug targets, candidate drugs and novel therapeutics. As nearly 20 of today’s blockbuster drugs will lose their patent protection by 2005, it is vital for pharmaceutical companies to find technology to accelerate the investigation of those targets, reduce the failure rate in clinical trials and bring new therapies to market.

Within the enabling technologies, key growth areas have been: high throughput sequencing for new gene discovery; gene expression analysis and proteomics for new target discovery; and high throughput drug screening for lead discovery. Pharmacogenomics, or using genetic differences to identify personal medicines, along with functional genomics, studying the interface between gene and protein (in other words the function of the gene) are also emerging. The closer links between all these fields and the need to share and analyse related data is also driving demand for information products and systems. These offer significant opportunities for supplier companies with expertise in protein studies and screening as well as genomics.

Genomics
The total market for gene sequencing instruments, reagents and consumables is growing at around 20 per cent. In public sector genome centres and privately funded genome companies, the introduction of a capillary electrophoresis technology by Amersham Pharmacia Biotech revolutionised sequencing, and facilitated the rapid sequencing of a human genome. In this segment of the sequencing market, where very high throughput is critical, Amersham Pharmacia Biotech and Applied Biosystems are the market leaders, with approximately 40 per cent and 60 per cent of the worldwide installed instruments respectively by third party sales, intellectual property being a high barrier to entry. Sales will continue to grow strongly as the sequencing market is driven by the need to understand genotypes (the specific gene sequences of an individual) in addition to gene fragment analysis and the many microbial, plant and animal genomes of commercial interest. For example, an international academic consortium is providing £39 million to sequence the genetic code of the mouse with the expectation that this could lead to greater understanding of human disease.

The medium to low throughput sequencing market is the larger element, where researchers to date have used single capillary or traditional gel electrophoresis instruments supplied predominantly by Applied Biosystems. There are over 10,000 such sequencers in laboratories around the world compared with an installed base of approximately 1,750 high throughput capillary instruments. Capillary electrophoresis instruments, with the benefits of reduced operator intervention and lower running costs, are now beginning to be introduced to this market segment too.

As new genes are discovered through sequencing programs, a rapidly growing market is developing for technology to understand gene function. Gene expression analysis is predominantly performed using microarrays and represents a market of almost £200 million, growing at 30 per cent per year. Affymetrix is the dominant supplier with sales of over £100 million per year with many suppliers including Amersham Pharmacia Biotech, Incyte and Agilent making up the remainder.

The recent development of technologies to analyse single nucleotide polymorphisms (SNPs) and understand the differences that exist between individual genomes will facilitate a better understanding of individual susceptibility to disease and response to drug treatment. Although the market for SNP technologies is just emerging, it is expected to grow rapidly and could be as large as £500 million by 2005 for the research and clinical development market. Ultimately it is likely that a whole new class of SNP-based diagnostics will emerge that will play an important role in the management of disease and therapy. Companies competing in this market include Amersham Pharmacia Biotech, Applied Biosystems, Sequenom, Orchid Biosciences and Third Wave Technologies.

Proteomics
Proteomics – the science of proteins – is not new, but it is experiencing a resurgence to the extent that it is expected to become at least as significant as the genomics market. There is already a strong market demand for technology that can rapidly analyse the protein content of whole cells or tissues, and proteomics will grow in importance in the discovery and validation of new drug targets. As in genomics, the emphasis is increasingly on high throughput analysis and miniaturisation and the market is demanding systems that will integrate technologies for protein labelling, separation, detection and characterisation with sophisticated analysis software. This technology integration will drive future growth to an estimated market size of over £1.5 billion in 2005.

Traditional analysis of this market has included all protein study products, but focusing on the new generation of high throughput protein factory technologies gives a market size estimated at £330 million. This is made up of sales of increasingly high throughput systems involving mass spectrometry, 2-D gel electrophoresis and other automated analysis systems. Currently the major suppliers of mass spectrometry instruments are Applied Biosystems and Micromass (a division of Waters), with Amersham Pharmacia Biotech leading in the supply of 2-D electrophoresis systems.

Drug screening
The advances in genomics and proteomics have vastly increased the number of potential drug targets. This, coupled with the availability of large combinatorial libraries of between 100,000 and 1,000,000 chemical compounds, continues to fuel the growing market for high throughput technology to screen for potential new drugs. Total pharmaceutical company expenditure on a wide range of high throughput drug screening products, technologies and services is over £1 billion per year and growing at 10 per cent. However, some companies are now recognising the need to undertake more rational and selective drug design and to change the drug development model to reduce overall failure rate and costs. This is driving new markets for technologies that will enable companies to rule out candidates with adverse metabolism effects at an earlier stage.

The heart of the current high throughput screening process consists of assays and detection instrumentation, which constitute a market of around £220 million. The market leaders here are Amersham Pharmacia Biotech, Perkin Elmer, Packard Bioscience and Aurora. The market will continue to grow quickly, driven by technology advances such as miniaturisation to decrease assay costs, and the use of cell-based assays to give more detailed information.

Bioinformatics
Bioinformatics – the use of high power information technology and systems to collect and analyse the mountain of data generated by life sciences systems – is a new and growing potential market. This market includes products ranging from individual platform software, through laboratory workflow systems – which integrate platforms, sample and reagent logistics – to complex databases for making sense of the large amounts of interrelated gene and protein data. The market for laboratory workflow systems and enterprise databases, which enable production research by handling data from sample to information , is in its infancy, but is estimated to reach £800 million by 2005. Companies beginning to compete in this market include Amersham Pharmacia Biotech, Cimmaron, Applied Biosystems and Informax.

Drug manufacturing
Bioprocess
The manufacture of biomedicines or biopharmaceuticals – drugs based on biological molecules – began in the 1980s with the development of recombinant proteins or cloned gene products such as insulin. The number of biopharmaceutical candidates in clinical trials and gaining regulatory approval has increased every year for the past decade, leading to a rapid rise in the total number of marketed drugs. There are now over 80 such biopharmaceuticals from companies such as NovoNordisk, Amgen, Eli Lily and Johnson & Johnson. The production of these drugs requires chromatographic separations media and systems as a key stage in purification. The market for these bioprocess products is worth £230 million and is growing at around 15 per cent per year, driven by the increasing number of licensed biomedicines. Amersham Pharmacia Biotech leads this sector with a 55 per cent market share, ahead of Millipore, Tosoh, Dyax/Biotage, E Merck and Invitrogen.

Biotechnology drug candidates in clinical trials comprise a wide range of compounds including monoclonal antibodies, DNA-based gene therapies, growth factors, interferon and vaccines. The growth rates in this area are expected to be maintained or to rise in the future as an increasing number of novel proteins, peptides and antisense gene therapies is brought to market as therapeutic products. There are currently more than 370 biopharmaceuticals in development. This market growth for bioprocess products will be underpinned by the increasing propensity of pharmaceutical companies to look for new manufacturing technologies that further improve overall production economy.

Protein purification
As part of the scale-up during clinical trials of biopharmaceuticals and for the validation of their manufacturing processes, laboratory chromatography techniques are used to purify the protein samples. There is currently around eight per cent growth in this market, which is worth £270 million. Competitors in this laboratory business include Amersham Pharmacia Biotech, Bio-Rad, Invitrogen and Applied Biosystems.

General laboratory products
Supporting the general life sciences research market is a group of core products used in over 100,000 academic and industrial laboratories around the world. This laboratory products market is highly fragmented with many suppliers, ranging from specialists to large, broad range distributors that supply tools for the detection, labelling and analysis of biological molecules.

This market is estimated to be worth around £1.2 billion and competitors include Amersham Pharmacia Biotech, Bio-Rad Laboratories (electrophoresis), Roche Molecular Biochemicals (PCR/labelling and detection reagents), Invitrogen (molecular biology reagents) and Sigma Aldrich (research chemicals). Competitive advantage in this segment depends on strongly branded products offering good technical performance and efficient after-sales support. Some other companies such as Fisher Scientific and VWR (part of Merck KGaA) rely on a competitive position of being a very broad-range supplier – reflected in annual sales revenues of over £1.5 billion each. Other companies, such as Qiagen, tend to focus on one particular technology or niche.

Over the last 18 months, the market has seen the introduction of e-commerce but acceptance of these electronic solutions has been variable. Customers have not adopted new purchasing patterns as quickly as initially expected, although one estimate suggests that the majority of the top 20 pharmaceutical companies will have introduced some form of this purchasing method by the end of 2002. More certainty surrounds the use of the internet as a means of providing on-demand technical information, support and service.