Challenges and growth opportunities in the life science mass spectrometry market are discussed by Eric Gay, analyst in drug discovery and proteomics at Frost and Sullivan
Campaigns to sequence the human genome were to a large extent driven by the development of and advances in automated sequencing technologies.
In turn, the race to complete the sequence, in the search for not only basic knowledge but also a better understanding of disease mechanisms, served as a catalyst in the growth of the automated sequencer market.
With sequence in hand, new challenges arise on several fronts.
For example, how do we derive meaningful information from the sequence? What proteins are ultimately expressed in each of the 200 tissues present in the human body? How do these expression patterns, and the proteins themselves, change over time and in response to disease states? While sequencing of the genome's three billion base pairs was an extraordinary accomplishment, the proteome is far more complex as each of the 30,000 estimated genes have multiple splice variants with additional complexity added in the form of posttranslational modifications.
The result is an enormous number of proteins interacting in multiple complex biochemical pathways. Similar to automated technology in DNA sequencing, mass spectrometry is the tool of choice in the identification and characterisation of proteins following protein separation using, most commonly, 2D gel electrophoresis or chromatographic separation.
In addition to proteomics as a driver, end user segment trends also serve to increase the applications of the technology and thus drive growth.
While proteomics applications are geared largely to identification and characterisation of proteins expressed in given tissues, later stages in drug discovery and development harness mass spectrometers to characterise the metabolism of lead compounds and monitor metabolites produced in response to introduction into biological systems.
These applications extend into early stage clinical trials including phase I and II.
In addition to the increased application throughout the drug discovery value chain, other trends in the macro economic and end user segments are having a significant impact on this marketplace.
One significant factor is an unfavourable capital market which ultimately serves to limit the availability of cash to smaller biotechnology companies. Since early stage proteomics and drug discovery oriented biotechnology firms may have limited revenues from the sale of products or through licensing and research agreements, the conservation of cash in this market could curb capital equipment expenditures.
In addition, the pharmaceutical end user segment is facing significant pressures.
These include weak earnings reports from historically high growth firms, reportedly weak drug pipelines and patent expirations which will serve to increase competition from generics resulting in a loss of an estimated $30 billion in annual revenues by 2005.
In addition, various firms will respond to these challenges through alternate strategies including an increase in M and A activity.
Others may curb capital budgets with others still choosing to aggressively invest in novel technologies that provide a competitive advantage.
Each of these alternate strategies will impact the life science capital equipment markets including mass spectrometry.
Favouring continued growth, however, are multiple factors including a need for increased efficiency in drug discovery.
Increases in R and D budgets have not resulted in a corresponding increase in applications for new chemical entities and, as a result, firms must address this issue of efficiency.
The majority of therapeutics are designed to intervene at the level of the protein and thus, by understanding not only protein expression but also protein interaction networks through a systematic approach, drug discovery researchers can identify and characterise more quality targets around which therapeutics can be designed.
Currently, mass spectrometers are without equal in terms of analytical capability in protein chemistry and thus are the tools of choice.
This will obviously serve as a driver in this marketplace.
Additionally favouring continued growth is the examination of R and D spending over previous periods including those of pharmaceutical industry consolidation.
During the period from 1995 to 1996 the industry experienced a period of consolidation with the formation of Pharmacia and Upjohn, Glaxo Wellcome, Novartis, Roche holdings and American Home Products. Further consolidation occurred from 2000 to 2001 with Pfizer's acquisition of Warner Lambert, Bristol-Myers Squibb's acquisition of Dupont Pharmaceuticals and the formation of GlaxoSmithKline.
US pharmaceutical industry R and D spending increased to $17.5 billion in 1996 and $19.8 billion in 1997 representing growth of 14.8 and 13.9 percent, respectively, over the prior year.
Similarly, in 2001 US pharmaceutical industry R and D increased by 18.2 percent over 2000 to reach a level of $30.5 billion.
This analysis does not support a trend in slashed R and D budgets following consolidation since much of the savings derived through mergers are at the level of administrative and marketing budgets.
Also serving as a driver is the fail faster and cheaper trend in drug discovery designed to kill drug candidates prior to costly later stage trials. Collectively, these factors will continue to serve as growth catalysts in the life science mass spectrometry mark.
