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European bioinformatics market surges ahead

From Frost & Sullivan

London, UK.  Efforts to effectively manage the flood of genetic and protein data being generated, the pressing need to boost drug research productivity together with solid government support are driving the European bioinformatics industry.

With the quantity of genetic and protein data reaching peta bytes (quadrillion bytes), scientists are finding it increasingly difficult to collect and analyse all this data. At the same time, the limited value of standalone data sets has triggered the search for tools that can help study disparate data in the same conceptual framework. Moreover, high throughput systems are significantly augmenting the yield of promising compounds. Accordingly, bioinformatics, which fulfils these multiple needs, is growing in appeal.

Dwindling drug pipelines, the lack of potential blockbuster drugs and the anticipated patent expires of existing drugs are compelling the pharmaceutical industry to develop tools that increase drug research productivity, accelerate the drug discovery process and reduce R&D expenditure. In the short term, bioinformatics will establish itself as a vibrant segment in the total drug discovery tools market, with competition set to intensify as profitability levels rise.

Governments of European countries, such as Germany and the United Kingdom
have taken initiatives to promote the benefits of bioinformatics. They have also increased their overall R&D investments, which is likely to have a positive impact on the growth rate of the European bioinformatics market.

Based on these trends, global growth consulting company, Frost & Sullivan, (http://healthcare.frost.com ) forecasts that the total European bioinformatics market is set to expand from nearly $310.0 million in 2004 to $720.0 million by 2011.

At an estimated compound annual growth rate (CAGR) of 14.4% over 2004 to 2011, proteomics is expected to have the highest growth potential within the European bioinformatics market. While the information manipulation segment will maintain its current revenue contribution levels — about 40% — to the overall market until 2011, the genomics software tools segment is likely to exhibit low growth.

Despite projections of strong growth, challenges are persisting in the market. Even as companies have achieved the leap to mainstream acceptance of bioinformatics solutions, the general perception is that currently available bioinformatics tools are restricted for use to only specialised end user groups.

"With the tools not as user-friendly as they are required to be, the critical need is to facilitate their transfer from trained users to those performing the actual research on the workbench, " says Frost & Sullivan Industry Analyst Raghavendra Chitta. "In the long run, if the tools are put in the hands of the actual users, the entire user base will increase, making it an attractive proposition for the bioinformatics companies."

Highly fragmented and competitive with both global and local company participation, the European bioinformatics market has been in constant flux. Large pharma companies typically account for 65% of total R&D expenditure but have less than 30% of drugs in the pipeline. On the other hand, smaller biotech companies account for just 30% of total R&D spending, but lay claim to nearly 60 per cent of the total drugs in the pipeline. This has changed the entire market dynamics for bioinformatics companies.

Consolidations have become common with mergers and acquisitions causing changes in the competitive structure. Many companies, such as DoubleTwist, have exited the market, while a few, such as Compugen, have moved up the value chain by offering their own drug discovery programmes.

"The market is likely to see a continued consolidation with many big life sciences supply companies considering bioinformatics companies as future targets for acquisition or partnerships to increase their product coverage," concludes Mr. Chitta.

If you are interested in a virtual brochure, which provides manufacturers, end-users and other industry participants with an overview of the latest Opportunities for Bioinformatics in European Drug Discovery Market (B495-55) — then send an e-mail to Katja Feick — Corporate Communications at katja.feick@frost.com with the following information: your full name, company name, title, telephone number, email address, city, state and country. We will send you the information via email upon receipt of the above information.

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