Note: Market numbers within text represent internal company estimates unless stated otherwise.

Fifty years have passed since the discovery of the double helix structure of DNA heralded a new era of medicine. At the beginning of the 21st century, catalysed by the completion of the human genome, life science continues to be seen as a major driver towards improved healthcare for all. Having the map of the human genome enabled life scientists to move into a new era of understanding biological processes at the cellular level. This new precision in biology will lead to a fundamental shift in the practice of medicine, enabling delivery of the goal of personalised medicine by facilitating better understanding, profiling, prediction and treatment of disease. In addition to technological advances, our knowledge-based society feeds a more informed and responsive public who continue to expect availability of cost-effective healthcare to improve their lives.

Research work in academia is critical for understanding the mechanisms of disease and underpinning improved healthcare; this has been reflected by generally stable sector funding during 2002. Government and charity spending to support the academic segment continued to be strong with double-digit growth. In the US, for example, the National Institutes of Health budget increased 14 per cent to approximately $23 billion in 2002, but it is anticipated that growth in funding will be decreased in future years.

Capital funding of start-up biotechnology companies has been under significant pressure this year, and sources of funding are now shifting from the public markets to a combination of the venture capital community and other private sources. Following the sequencing of the human genome, the market is uncertain about where the next frontier will be found. Companies are now turning towards functional biology, where the interest is in deciphering what the genes and their protein products actually do. In addition, companies that previously commercialised software and genomic data have developed new business strategies, moving from discovery companies to therapeutic developers, eg. Celera’s acquisition of Axys Pharmaceuticals and Millennium’s acquisition of Cor Therapeutics. Consolidation is likely to continue, frequently in association with large pharmaceutical companies through marketing alliances, to create powerful biotechnology players.

Despite the availability of far more potential targets than previously, there has still been a reduction in the number of innovative drugs being registered by pharmaceutical companies. Escalating R&D costs are lessening productivity and placing a greater importance on steps to limit the possibility of failure in the later stages of development. By better understanding the function and variation of genes and proteins in disease and health, pharmaceutical companies will increase their opportunity of identifying disease-relevant targets leading to better-targeted molecular drugs. In an attempt to maximise returns, companies have refocused some of their resources to later stage development to support life-cycle management. These companies also faced additional pressures such as market pricing and increased generic competition. In 2002 these significant issues were coupled with a backdrop of global recessionary pressure, increased focus on corporate governance and contraction of capital budgets.

Notwithstanding the global market challenges of 2002, dynamism and change remain the hallmarks of the biosciences market.

Selected application segment	Market size (£m)		Competitors
Bioprocess (industrial protein separations)	590		Millipore, Merck KgaA, Tosoh Bioscience
Laboratory protein separations	345		Bio-Rad, Applied Biosystems
Genomics – sequencing	500		Applied Biosystems
Genomics – gene expression	400		Affymetrix, Agilent
Proteomics	740		Applied Biosystems, Bio-Rad,Waters
High throughput drug screening	1,200		Cellomics, Molecular Devices, Perkin-Elmer

The market in which Amersham Biosciences competes has a value of approximately £5 billion; selected application segments are shown in the accompanying table. Customers include research and development groups within academic and clinical research laboratories, pharmaceutical companies, biotech companies and biopharmaceutical manufacturing groups.

Key market drivers are the sourcing and allocation of funds in these customer segments and the number of biopharmaceuticals in clinical trials. Total worldwide pharmaceutical/biotech R&D spend increased by approximately nine per cent in 2001; growth has slowed to an estimated six per cent for leading companies in 2002.

Growth in pharmaceutical and biotechnology R&D expenditure (£ billion)
(Source: Pharmaceutical R&D compendium, SCRIP Reports, company filings)

The biosciences market is fuelled by integrated systems, instruments, consumables and informatics, to support customers to achieve their goals faster and more efficiently.

Increasingly, sophisticated platforms such as biochips are being applied across genomics and are starting to enter proteomics. These technologies generate large amounts of data in a much shorter time than previously achieved, and have high potential in general research as well as in other applications such as in vitro clinical diagnostics.

Biologically-based drugs (eg. insulin, monoclonal antibodies, vaccines, DNA medicines) continue to grow in importance. Nine out of the 26 drug approvals by the US Food and Drug Administration (FDA) during 2002 were biologics.

Protein separations

Bioprocess
The number of biopharmaceutical candidates in clinical trials and gaining regulatory approval has continued to increase. There are now over 100 such biopharmaceuticals from companies such as Amgen, Eli Lilly, Johnson & Johnson and NovoNordisk. The key purification steps in the production of these drugs require systems, membranes and chromatography media designed and manufactured to the highest standards.

Biotechnology drug candidates in clinical trials comprise a wide range of compounds including anti-sense DNA, 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 anti-sense drugs are brought to market as therapeutic products. There are currently more than 500 biopharmaceuticals in phase I, II and III clinical trials worldwide. The market growth for bioprocess products will be underpinned by the increasing propensity of pharmaceutical companies to look for manufacturing technologies that further improve overall production economy. Because of the relatively large doses required in their use, the increased number of monoclonal antibodies in later stage development has triggered investment in manufacturing capacity to meet the expected demand.

Growth in number of licensed biopharmaceuticals
(Source: IMS data)

Laboratory separations
Chromatography is one of the core technologies used in protein analysis, and although affected by the slowdown in capital spending on tools, the longer-term growth in this market is being fuelled by the overall market expansion in proteomics. Laboratory chromatography techniques are also used in method development and scale-up for biopharmaceutical manufacturing.

Genomics
The genomics market is heterogeneous and is composed of sub-segments such as gene sequencing, gene expression and genetic variation, which are growing at different rates.

Sequencing efforts are now increasingly focused on exploration of genetic differences in the four nucleotide bases within, and between, a variety of species. Technologies are being applied to improving sample preparation prior to sequencing as well as reducing sample volumes, providing greater ease of use and increasing overall efficiencies.

Measuring and monitoring the level to which different genes are expressed is increasingly performed using microarray platforms with pre-arrayed nucleic acids (biochips) or with technologies to allow researchers to prepare their own arrays.

Tailoring of drug treatments is an important goal of personalised medicine. Analysis of single nucleotide polymorphisms (SNPs) should facilitate a better understanding of individual susceptibility to disease and response to drug treatment. The market is currently very small, but with technological advances it could show dramatic growth.

Proteomics
Proteomics – studies to discover the identity, function and interaction of proteins in living organisms – is experiencing good growth. Proteins are responsible for cellular structure, metabolism and function including signalling and growth, and are therefore the targets of most drug discovery efforts.

In contrast to genomics, the ‘industrialisation’ of proteomics is in its infancy. Unlike DNA, proteins cannot be readily amplified to aid detection and analysis. Also, in contrast to the 35,000 to 45,000 human genes, there may be up to two million different types of proteins, and these have complex differences in their three-dimensional structure which affect their function.

Current trends include the drive towards integrated approaches to provide increased sample throughput, sensitivity and accuracy. Technologies such as microarrays are just starting to be applied for protein analysis, but are considerably more complex than their DNA counterparts.

Bioassays
Researchers use bioassays to measure and quantify the biological processes involved in cellular activities, metabolism and disease. Bioassays are involved at almost every stage of the preclinical drug discovery research and development process. Validation of target molecules, primary screening of possible drug candidates, secondary screening to select lead candidates and finally, testing of the lead candidates to validate their metabolic/toxicological properties are among the hurdles that must be passed before a potential drug candidate can move into clinical trials.

The success of primary screening approaches has now led to development of the market for ‘high information’ secondary-screening formats. Researchers are now starting to use such formats to examine how modification of selected genes within cells is translated into physiological changes.

Informatics
The integration of the vast amounts of data generated from increasingly large numbers of sample studies and multiple technology platforms represents one of the key challenges for life science research in the 21st century. White major corporations such as IBM are becoming active in this segment, current market needs are focused on laboratory information management systems (LIMS) which integrate platforms, sample and reagent logistics and enable production research by handling data from sample to end result. The LIMS market is predicted to grow to over £0.5 billion by 2007. (Source: Frost and Sullivan).