The life sciences industry is going through a period of significant change. A small number of the younger companies, such as Amgen, Genentech, and Genzyme, have grown into large multibillion-dollar businesses offering novel therapeutic agents for a variety of disorders. Some of these companies have adopted strategies involving mergers and acquisitions and collaborations with smaller companies, in addition to forming collaborations with the older pharmaceutical giants.
At the same time, the older large pharmaceutical companies, such Merck and Pfizer, are facing lawsuits, challenges resulting from dwindling pipelines, threats from generics, and a national movement to reduce the prices of pharmaceutical agents - not to mention the challenges posed by Canadian pharmacies that sell to U.S. citizens. These situations are a significant threat to the profitability of the large pharmaceutical companies, and how well they meet them will be a large factor in their continued success.
In the middle of these two groups are the smaller companies. For the most part, these companies have novel approaches to drug or target discovery, as well as a supply of early stage therapeutic candidates. The vast majority, however, do not have the resources to develop their products through to commercialization, much less the capital needed to market them effectively.
The approaches employed by these groups to meet their various goals are a primary focus of this report. Also presented are case studies of business approaches that once looked viable, but soon turned sour. Notable companies in this category include DoubleTwist, Celera Genomics, and Incyte Genomics, all of which were founded as information providers, and all of which were undermined by backlashes from researchers and the growth of public databases. Bioinformatics and systems biology are two other areas with great potential but limited abilities (at this time) to shorten drug discovery times and costs.
This report:
- Analyzes the newly emerging industry in proteomics.
- Provides an overview of the market and a brief discussion of relevant scientific principles.
- Discusses current and future investment trends for the U.S. and the importance of each new method of research to the overall market.
- Analyzes patents and their importance to the industry.
- Considers investment by angel investors and venture capitalists, collaborations and mergers and acquisitions.
- Examines the relative merits of systems biology, a new approach and potential "next big thing" in the industry.
- Presents appendices that contain directories of companies and investors, as well as profiles of companies given significant coverage in the report.
The material for this report was gathered from interviews with individuals in the industry, as well as a thorough review of technology gathered from secondary sources. These sources include company annual, 10K and 10Q reports, company literature, trade literature, trade associations, and online sources.
Projections were based on current and historical levels of funding and revenues, potential end users, likely unit prices, and rates of consumption. Final projections are based on the analysis of information from primary and secondary sources. All dollar projections are presented in year 2006 constant dollars.
Valerie Natale has an M.Sc. in microbiology from the University of Dublin and a Ph.D. in cell biology from the University of Bern. She has considerable experience in biotechnology, both as a research scientist and as the president of a small startup company investigating treatments for neurological disorders. She has written a number of other BCC reports on this industry.
Report Code: BIO054A, Published: June 2006, Analyst: Valarie Natale
