REPORT HIGHLIGHTS

• Manufactured enantiomeric products, produced either by racemate separation (resolution, the dominant technology to date) or by specific chiral synthesis to produce single isomer products. Although chiral resolution still is the dominant commercial technology, the value of its enabling products is much less. It only was about $103 million in 1999, compared to more than $1.6 billion that year for chiral synthesis-enabling products. The reason lies in the recovery and reuse of most separation products and the high cost (and use) of chiral chemical intermediates; the latter are the single, largest type of chiral enabling product at about $1.6 billion in 1999. We forecast continued healthy growth for all chiral manufacturing products, from a total of $1.75 billion in 1999 to almost $2.8 billion in 2004, at an average annual growth rate (AAGR) of almost 10%.
• Chiral analysis products are materials that enable scientists to analyze chiral products and mixtures. This market, valued at about $160 million in 1999 and growing at 5.5% overall to $209 million in 2004. It is dominated by analytical chromatography, especially liquid chromatography (mainly HPLC). This latter technology accounted for $121 million of the 1999 market.

REPORT SCOPE

INTRODUCTION

Few people on street are aware of chirality; indeed, we are pretty certain that the very word is meaningless to most. Yet chirality and chiral technology, the science of organic chemical optical stereoisomerism, are actually very prevalent, almost pervasive in our daily lives. The primary reason for this is the fact that chiral technology is a special and specific technology in organic chemistry, and organic chemical molecules are the ones that really affect us the most. The gasoline and heating oil we burn, the hair spray we use (and the container that it comes in), the clothes we wear, the drugs we take to get and keep well, and most of all, our very bodies, are all composed of organic molecules, many of them chiral.

To date, chiral technology has evidenced itself most in the pharmaceutical industry. Modern health care, influenced by HMOs and other cost-reduction factors, has turned more to drug therapy instead of surgery, when possible, and this means more research and development on new and better drugs. Since many of the most important pharmaceuticals are chiral, chiral technology plays center stage in this transition and has revolutionized the pharmaceutical industry.

In addition to pharmaceuticals, chiral technology is important in other industries, e.g., biochemicals, pesticides, aroma and flavor compounds, dyes and pigments, liquid crystals, nonlinear optical materials, polymers and others.

STUDY GOAL AND OBJECTIVES

This study, third in a series of updated reports on the technically and commercially exciting field of chiral technology, is an update of a report published in January 1995. During the intervening years, change continued to be the norm in this industry, albeit not at quite the same rate as earlier in this decade.

Since this may be the first report of this type to be seen by some readers, we must discuss and answer certain basic questions about chiral technology in addition to looking at current and forecasted markets and products. Thus, this report also is a technical treatise on the subject. The objectives of this study are to answer the following questions:

• Just what is chiral technology, and why is it important?
• What are the current and potential applications of chiral technology, not just in pharmaceuticals, its most important market sector, but also in all sectors?
• What is the worldwide market value of chiral technology-enabling products? An enabling product is one that allows a single isomer (enantiomer) product to be produced.
• What is the market value of products emerging from chiral technology applications? These are chiral intermediates and other enabling materials as well as end products.
• Who are the participants in chiral technology? Many types of companies participate in chiral technology. These range from large drug companies to chemical startups and analytical firms.

The goals of this study are to provide objective and useful professional information, analysis and insight into both the technical and spheres pertaining to this subject. BCC believes that this update is much more than just an attempt to estimate the products and markets for chiral enabling products; it is, in our opinion, a comprehensive treatise on the past, current and near-term future of chiral technology, especially for pharmaceuticals. Several new topics and products are covered in this update.

REASONS FOR DOING THE STUDY

As has been previously mentioned, this report is an update of a BCC study done in 1994 and published in January 1995; much has happened in the intervening years. BCC is updating its report on this important topic to provide a comprehensive reference for those interested and/or involved in chiral technology in all its ramifications. There is a wide and varied group of personnel in the chemical, pharmaceutical and supporting industries. What makes this subject even more interesting is that, important as it is, most people are not even aware of such a thing as chirality; yet as we show in this report, it pervades our daily lives.

The most important place today where chirality affects all of us is in the pharmaceutical arena. When drug companies discuss their involvement in many different drug research and commercialization topics, e.g., rational drug design, receptor-based drugs, enzyme inhibitors, advanced compound screening and small-molecule research, generally they are talking about chiral drugs. After the biological aspects are discovered, R&D efforts usually turn to organic chemistry since almost all pharmaceuticals are organic chemicals; here is where chiral technology plays the major part. Chiral technology has progressed far since its beginnings and now drives many major developments in the pharmaceutical industry, to the point of being considered nothing short of a revolution. This revolution may have slowed down a bit in the past couple of years, but it still is very much alive. In fact, now that the advantages of single-isomer products are becoming better known and understood, it should continue growth at a good pace.

The above paragraph concerns only the pharmaceutical sector, admittedly the largest at this time and probably will remain the largest for the foreseeable future. But in an even broader perspective, chiral technology involves much more than drugs. Also of significance are applications to other products such as biochemicals, pesticides, aroma and flavor compounds and other products. Several are covered in this report.

Another fascinating aspect of the chiral technology industry, and growing in importance, is the dimension. This is because chiral technology is shaking up old ways of thinking and because the competitive aspects are so intense. This study, therefore, seeks to shed light on a topic of major importance, integrating both the technical and the perspectives.

Since January 1995, when the last BCC report was published, much has continued to happen in this field: changes in technology, the industry and in opportunities, and changes in regulatory and market dynamics. There are many more chiral compounds available and more companies are involved in chiral technology. This update also was researched and written by a different analyst, one with 40 years' experience in the pharmaceutical and chemical industries, and who has brought some new insights and viewpoints into this discussion.

CONTRIBUTION OF THE STUDY AND FOR WHOM

This report is intended for those already participating in chiral technology as well as those unfamiliar with the subject and who wish to learn more. This includes personnel in the pharmaceutical, chemical, polymer, catalysis, analytical services, financial and other industries, as well as those in government.

Written from a perspective but integrated with science and technology, this report will be useful for chiral technology-enabling product suppliers, practitioners applying chiral technology for commercial ends, and financial investors.

SCOPE AND FORMAT

All aspects of chiral technology are included in this study: enantiomeric analysis of chiral compounds, chiral resolution for preparative purposes, chiral synthesis and applications products and markets. Known chiral technology applications are discussed, with understandable focus on pharmaceuticals since they constitute the major applications category. Also covered are other chiral products including pesticides, biochemicals and other miscellaneous applications.

In addition to the technology itself, this study has a primary emphasis on the aspects of chiral technology. We are concerned not merely with how chiral technology is being applied in the laboratory and with what kinds of enabling products, but with where, and by which companies, chiral technology is being applied for commercial purposes.

Toward that end, we stress commercial practices and prospects, and discuss and evaluate chiral technology in terms of enabling product sales and the sales of end chemicals that come from their application. We quantify sales, not for all chiral enabling materials and end products, but for a specific group of these materials where they are used to produce single isomers (enantiomers), either by separation (resolution) from a mixture of enantiomers (a racemate or racemic mixture) or by direct chemical synthesis.

Despite the wide scope of this study, there are some exclusions:

• First, there is the obvious exclusion of all forms of chemical isomerism other than optical isomerism (that is, chirality).      

• Second, we exclude sales of products used for the manufacture and analysis of inherently enantiomeric biological compounds.  We are not interested in these products of the chiral technology industry since they occur naturally.  Examples are the many natural biological products, common antibiotics produced by industrial fermentation and the enzymatic breakdown of starch into simple chiral sugars.  Thus, we are concerned only with compounds for which racemates have been or can be made, and the job becomes either separating them or synthesizing one of the optical isomers.  This exclusion and concentration on nonnatural chiral compounds narrows the scope of our study to a smaller yet extremely important segment.  It also means that our market sales value estimates will be lower.  In many or most cases, they will be significantly lower than those of many or most other analysts who include more types of chiral compounds.

• Third, we are only concerned with what we call enabling products.  That is, chemicals and other materials (such as analytical instruments) that enable either the separation from a racemate or the direct synthesis of an enantiomer or enantiomers.  We do not include long-standing production of racemic mixtures.  And, of significant importance, we do not include the value of the starting racemate in chiral resolution (that is, production of individual enantiomers from the racemate).  Thus, the value of both the final product enantiomer and any racemate-starting material is excluded from our market analysis of chiral enabling materials.  This also makes our market value estimates much smaller that those of others that may include any or all of these other materials, including starting racemates and end products.

• Last, we exclude any chiral chemistry in which the chiral center or centers is/are other than that of chiral carbon.  Thus, we exclude chiral nitrogen, chiral sulfur and other types of isomerism.  This study focuses exclusively on chiral carbon.

Unlike many BCC reports that concentrate on the U.S. market, this study and report looks globally.  Our market analyses are, for the most part, worldwide given the global nature of this industry, and we profile many foreign-based firms as well as those based in the United States.  All enabling-product market figures are given in constant 1999 dollars, rounded to the nearest million; given the running controversy among analysts as to what should be included or excluded, even this level of precision may not be warranted.  Sales figures include all uses, and both merchant sales and captive consumption are valued at open market.

All analyses are made independently and objectively. All references to, and discussions of companies and products are not endorsements, and omissions of companies, products and applications, if any, are not intentional. This field is simply too big and changes too rapidly to attempt to list all the products and players in it.

Our base year is 1999, with forecasts for 5 years to 2004. All growth rates are compounded (signified as average annual growth rate or AAGR). Because of the need for a lot of uncertainty in estimating the sales value of chiral enabling products, all of which are buried in the cost of final chiral drugs, pesticides, etc, we round all our market values to the nearest million dollars. Because of this rounding, some AAGRs may not agree exactly with figures in our market tables.

This report is segmented into 10 sections and an appendix, of which this is the first.

The summary encapsulates our findings and conclusions, and includes a summary market table. It is the place where the busy executive can find our major findings and conclusions in summary format.

Next is an overview of chiral technology. It starts with a discussion of the chiral technology revolution, asks and answers what chiral technology is and notes its importance. The report also introduces the forces and major issues driving the industry, describes how we quantify chiral technology, and introduces major chiral technologies, products and applications as well as some long-term implications of chiral technology.

The first of our product and market analyses discusses the from the viewpoint of manufactured chiral products. After an overview of chiral manufacturing, we present our summary and overall sales forecast. This is followed by detailed discussion of the two means of producing single enantiomers: chiral resolution (preparative racemate separation) and chiral synthesis. Many different enabling products and aspects of chiral manufacture are discussed and analyzed.

The next section is devoted to chiral analysis products, i.e., those materials and techniques used to analyze enantiomers and racemates. These include chiral analytical chromatography, (both liquid and gas chromatography), chiral polarimetry and other chiral analytical techniques.

Our final market analysis section is devoted to chiral technology applications markets. Besides the major market in pharmaceutical products, these include biochemical products (e.g., amino acids and vitamins), pesticides, and some interesting other products such aroma/flavor chemicals and liquid crystals. We place heavy emphasis on pharmaceutical products, with discussion and sales analysis of drugs in general, and chiral drugs in particular. Major drugs and drug groups are discussed in detail by therapeutic category, such as cardiovascular and central nervous system products.

The technology section describes types of organic chemical isomerism, the nature of chiral (optical) isomerism, chiral technology terminology, and it ends with a discussion of chiral R&D, patent activity and some new developments.

The section on the chiral technology industry starts with an overview and includes discussion of the industry structure, major participants in chiral technology and some international aspects. We list many of the most important industry players segmented by their activities, such as suppliers of chemical catalysts and custom chemical synthesis. We discuss company consolidation and restructuring and market forces driving the drug industry. Because chiral technology is increasingly a global , we discuss manufacture outside the United States and worldwide sales of chiral-enabling products.

Regulatory, environmental and public policy issues include regulations governing chiral technology, both federal and other, as well as some other legal aspects of the .

The final narrative section contains profiles of many of the important players in the chiral technology . More than 100 companies are profiled, even more when one counts divisions and subsidiaries.

Finally, our appendix contains a glossary of many of the most important terms, abbreviations and acronyms used in chiral and ancillary technologies. This is a highly technical and the lingo is correspondingly complicated.

We cite and report a number of statistics, many from public sources such as trade and government publications. We cite the most recent figures available, which ideally for this report would be from 1998. Unfortunately, many of these data are only available a year or more after the fact. This is especially so with U.S. government statistics which are notoriously late, often by several years. Continual government downsizing also means that many statistics are either less complete and therefore, less useful or simply are no longer collected. For these reasons, the reader may find some references to information from 1997 and earlier, especially government figures.

METHODOLOGY AND INFORMATION SOURCES

As noted above when we outlined the scope of this report, this study is not concerned with all chiral compounds, only those where the difference between a racemate and its individual enantiomers is the issue. Therefore, we limit or exclude discussions and analysis of inherently enantiomeric natural compounds; our focus is on synthetic organic chemicals and semisynthetic compounds. That is, we limit coverage to enantiomeric (single-isomer) compounds that are either separated from racemates or directly synthesized as enantiomers.

To do this study, extensive searches were made of the Internet and the literature, including trade publications and technical compendia, government publications and information from trade and other associations. Much of the product and market information was obtained from principals involved in the industry. Other sources included textbooks, directories, articles and Internet sites.

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REPORT TOC