REPORT HIGHLIGHTS

REPORT HIGHLIGHTS

• New methods for drug discovery and delivery are receiving considerable attention in the pharmaceutical industry and in the media. Trial-and-error discovery methods have been replaced by focused combinatorial synthesis, high throughput systems, and other advanced systems. These new methods have produced agents that have entered clinical trials. As a result of the new technologies, costs and development times are falling, and knowledge about each new agent's mode of action has increased.
• This updated BCC study examines how the new drug discovery technologies have affected costs and drug development times. It also analyzes how new screening technologies, DNA microarrays, and increasingly sophisticated instruments will affect pharmaceutical discovery. An important section of the report analyzes market sizes and market growth for each technology. The report also includes interviews with executives in the instruments industry and the combinatorial chemistry industry.
• Molecular biology has given scientists detailed knowledge about basic and complex biological processes. One result of this new knowledge has been an explosion in the development of sophisticated pharmaceutical agents. For example, the number of drug candidates that have been screened in the last ten years has increased by three orders of magnitude: in 1990, approximately 500,000 drug compounds were screened; for the year 2000, that number is estimated at 1.5 billion.

REPORT SCOPE

INTRODUCTION

STUDY GOALS AND OBJECTIVES

New methods for drug discovery and delivery are receiving considerable attention in the pharmaceutical industry and in the media. Reports indicate that trial-and-error discovery methods have been replaced by focused combinatorial chemistry, computer-aided drug design, and other processes that focus on directed approaches to finding new drugs and new drug targets. Furthermore, high-throughput systems, automated assays and other advanced systems aid analysis of all of the compounds created by these methods. Finally, as the capital poured into drug discovery has increased, so have the incentives for instrument companies and others to produce advanced equipment in a timely manner. The result of all this effort and new technology, in theory, will be to reduce development costs and development times while increasing knowledge about each new agent's mode of action.

This study examines how the drug discovery industry's push to find more drugs, sooner, has affected the industries that supply it with instruments and services. It also analyzes how new technologies like DNA chips and pharmacogenomics will affect the future of pharmaceutical agents, and how markets for these products will develop in the next five years. A discussion of the Sales and spending projections through 2005 are included.

REASONS FOR DOING THE STUDY

Molecular biology has given scientists detailed knowledge about basic and complex biological processes. One result of this new knowledge has been an explosion in the development of sophisticated pharmaceutical agents. For example, the number of drug candidates that have been screened in the last ten years has increased by three orders of magnitude: in 1990, approximately 500,000 drug compounds were screened; for the year 2000, that number is estimated at 1.5 billion.

This rapid growth has led to widespread availability of commercial instrumentation and reagents that speed screening. Systems for high-throughput screening are especially important, and they have been developed for fluorescent, colorimetric and radioactive assays. Analyzing developments in instrumentation is essential to understanding how the market for screening tools will develop in the near future.

AUDIENCE FOR THE REPORT

This report is directed at decision-makers in each industry segment, as well as at individuals and organizations considering investing in drug discovery or drug discovery technology. These people include, but are not limited to the following:

• Venture capitalists
• Merger and acquisition executives
• Market and product management professionals
• Chief scientists and technical officers
• Equipment manufacturers
• Reagent suppliers

SCOPE AND FORMAT

This report is a tool whose purpose is to analyze the newly emerging industry in drug discovery research. The section following this introduction provides a summary of the report and its conclusions. An overview of the market and a brief discussion of relevant scientific principles follow the summary. The ensuing sections analyze current and future market trends and the importance of each new drug discovery method to the overall market. There is also an analysis of patents and their importance to the industry.

The study considers new technologies for drug R&D, as well as instruments and reagents for synthesis, purification and characterization of compounds. The research in this study is limited to the very earliest stages of research: acquiring compounds, preparing them, and analyzing them. The report's appendices contain directories of companies and other entities involved in drug discovery research, as well as a directory of instrument and reagent suppliers.

METHODOLOGY AND INFORMATION SOURCES

The material for this report was gathered from interviews with individuals in the industry, as well as from a thorough review of technology gathered from secondary sources. These sources include company annual reports, SEC filings, other company literature, trade literature, trade associations, and online sources including company web sites.

Projections were based on such estimates as the current number of end users, funding levels, potential end users, likely unit prices and rates of consumption. Final projections are based on an analysis of information from primary and secondary sources. All dollar projections are presented in year 2000 constant dollars.

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