Balaji K, Industry Analyst, Asia Pacific Biotech Practice, FROST & SULLIVAN

‘Information is power' has been one of the oft-repeated clichés in corporate boardrooms. With information originating from various processes, biotechnology has reworked the old cliché. 'Information capture, storage, management, and analysis is power'. To put it in a nutshell, biotechnology is looking toward advances in information technology, for example, bioinformatics, to get the job done more quickly.

Bioinformatics is the capture, management, analysis, and dissemination of information related to the emerging drug-discovery paradigm using genomics, combinatorial chemistry, proteomics, and high throughput screening.

With pharmaceutical and biotech companies increasingly relying on infotech to provide them with solutions and tools to manage their growing data, bioinformatics is the most important part of the biotech wave to hit the Asia Pacific region.

Drug research is data rich, but information poor. Genomics or gene-sequencing projects, high throughput screening, combinatorial chemical synthesis, gene-expression investigations, pharmacogenomics, and proteomics studies have created massive volumes and multiple sources of biological and chemical data. These data are threatening to create a bottleneck that might hamper drug discovery and development. The primary goal of bioinformatics is to link and convert this complex data into useful information and knowledge. As computing and biology have converged, software tools for data capture, management, analysis, mining, and dissemination have also emerged. The convergence of biotech and infotech has become inevitable.

It has been estimated that about 20 percent of the current novel discovery programs are based on genomics, and this is fueling the growth of bioinformatics. It is predicted that virtually all new discovery programs will be genomics-based in the near future. Currently, there is an increased pressure to develop breakthrough drugs and shorten the drug discovery time and costs involved. This presents an opportunity to bioinformatics companies as data capture, management, analysis, and dissemination could play a vital role for drug discovery companies in containing both cost and time.

The Market: The total market for bioinformatics is estimated to be $837.7 million in 2002 growing at a compound annual growth rate (CAGR) of 8.64 percent.

The global bioinformatics market is directly proportional to the investments taking place in human healthcare R&D for new drug development. Pharmaceutical companies are under pressure to develop blockbuster drugs. With costs to take a drug from ‘bench to bottle’ ranging from $400 to $900 million, and the percentage of drugs that make it to market being low, the pharmaceutical companies are increasingly looking at biotechnology to deliver results. With informatics being the backbone of biotechnology, the informatics market today is piggybacking the investments made in drug discovery and development, and encompasses every stage of the pharmaceutical and biotech R&D process. Most of the data regarding the previously discovered gene sequences is available in the public domain, bringing down the cost of having to invest in costly Intellectual Property Rights (IPRs), and this has become a crucial driver for the growth of bioinformatics globally.

Globally, the markets in USA, Japan, Western Europe, Taiwan, and Singapore are in a high growth phase, while those in the rest of Asia and Latin America are in a medium growth phase. In Asia, Japan, Australia, India, Singapore, Taiwan, and South Korea have shown good potential as supplier of Bioinformatics tools. Software for data management and data analysis are on the higher end of value chain and contribute more revenues than other segments. Some of the important market players include Celera Genomics, Lion Biosciences, Informax, Accelrys, AlphaGene, Base4 Informatics, Gene Codes Corp., DNASTAR, Inc., Genomica Corp., Incyte Genomics, Molecular Informatics, Inc., Cognia Corp., CuraGen and Textco, Inc.

Regional Attractiveness Index: Figure 3 gives the regional attractiveness for bioinformatics. The index takes into account macro-economic variables such as GDP; market related variables such as market age, government initiatives, growth rate, IT expenditure, and degree of competition; and micro variables such as technical expertise and R&D expenditure of biopharma companies.

The Market Segments: The global bioinformatics market can be segmented into two – the supply side and the demand side.

Figure 4: The global bioinformatics market

The supply side consists of vendors in the market that provide data-generation software, which is used to control gene-sequencing hardware; data storage and management that allows the raw sequence data to be stored so that it can be analyzed and sequenced later; data-analysis software applications which are used to mine data from available databases, and then perform various forms of analysis such as gene-sequence manipulation, comparison and alignment; and data dissemination, which makes available the information on discovered sequences to all concerned parties inside, and frequently outside, the organization.

The demand side includes gene-based informatics, which comprises all the uses of bioinformatics techniques for the analysis of genetic elements. This includes the discovery phase of genomics (structural genomics), the target validation phase (functional genomics), and the stratification of patient populations based on genotype for diagnostics and therapeutics (pharmacogenomics). The other component of demand side is cheminformatics, the characterization and optimization of combinatorial libraries with the intent of using these libraries in the drug discovery process.

Trends: The global marketplace is currently witnessing the emergence of increased numbers of validated technologies with increasing levels of integration. Open data formats such as Java and XML are driving the market. The market is also witnessing increasing market consolidation and use of legacy systems. The decoding of the human genome sequence has accelerated the need for high throughput target identification and validation, driving the need for bioinformatics as a tool in both biotechnology and drug discovery. Today, IT capabilities cover the entire R&D chain, which includes gene identification, target identification and validation, and patient monitoring, further fueling the growth of bioinformatics. Companies are increasing the application of biotechnology in areas such as therapeutics, agriculture, industry, food, and so on. This increasing application of biotechnology is driving the growth of bioinformatics. An increase in the number of teaching institutes, which provide systematic training in bioinformatics, has ensured that adequate skilled manpower is available to take advantage of the opportunities presented. Huge volumes of data available in public and commercial databases along with the data generated by pharmaceutical companies poses formidable challenges for data management and also aids the growth of bioinformatics. The global market is also witnessing increased interest in bioinformatics from pharmaceutical, biotechnology, and IT companies, and this has resulted in a spate of mergers, acquisitions, and joint ventures, both among them and with bioinformatics start-ups as well.

Bioinformatics in Asia Pacific is driven predominantly by the government-funded initiatives. This is all set to change in the near future. More and more private informatics start-ups are being formed. Today, the informatics initiative is being driven by the large pharmaceutical companies in the region as well as the IT companies entering the arena with their technical skills. The Asia Pacific market is witnessing a shift to a large number of private sectors holding considerable sequence information in the proprietary domain. The biggest driver of bioinformatics continues to be the availability of significant amount of data in the public domain. This continues to play a significant role in terms of training a whole new generation of scientists, environmentalists, healthcare professionals, clinicians, computational biologists, bioethicists, and so on. The key countries in the region are Japan, Australia, India, Singapore, and South Korea. Taiwan, China, and Indonesia continue to lag behind these top 5 behemoths.

Japan: The chief promoter of Japanese bioinformatics industry continues to be Japan Biological Informatics Consortium (JBiC). JBiC is an organization of large chemical and pharmaceutical companies that aims to improve the international competitiveness of the Japanese biotechnology industry by using bioinformatics to speed R&D in all sectors of biotechnology. JBiC has spent approximately $130 million to date on various bioinformatics projects. JBiC focuses on SNP, protein analysis, and establishment of e-commerce systems for the biotech industry. It coordinates the various ministries associated with Japanese biotechnology (such as the Ministry of Education, Culture, Sports, Science and Technology (MECSST); the Ministry of Agriculture, Forestry, and Fisheries (MAFF); the Ministry of Health, Labor, and Welfare (MHLW); and the Ministry of Economy, Trade, and Industry (METI)) with various public-funded research institutes and private sector companies.

One of the important private players in the Japanese bioinformatics arena is Hitachi Life Science. Hitachi offers a variety of research services, right from DNA sequencing and SNP discovery to genetic analysis, protein structure modeling, along with system integration services. A number of pharmaceutical majors also play a critical role in promoting bioinformatics in the country. They include Ajinomoto Co., Inc., Ono Pharmaceutical Co. Ltd., Taisho Pharmaceutical Co. Ltd. and Yamanouchi Pharmaceutical Co. Ltd., to name a few.

Australia: The surge in bioinformatics field is fuelled by the advances in genomics and proteomics generating increasing volumes of biological data that need to be managed and interpreted. The Australian bioinformatics industry is still in its infancy. A number of Australian companies, research institutes, Cooperative Research Centers (CRCs), universities, and other organizations are active in bioinformatics and the development of bioinformatics technologies. A large volume of bioinformatics work happens in the universities and government research institutes. Developments within Australia’s bioinformatics capability include unique databases and libraries, innovative screening and analysis technologies, and various bioinformatics programs.

The important centers of action are the Australian National University; Monash University; the University of Queensland (Biological Information Theory group (BITS) and Computational Biology and Bioinformatics Environment); Murdoch University (Centre for Bioinformatics and Biological Computing); Sydney University (Australian National Genomic Information Service (ANGIS)); CSIRO (Bioinformatics Research Group); and Macquarie University (Australian Proteome Analysis Facility (APAF)). The Walter and Eliza Hall Institute and the Garvan Institute of Medical Research (through the Peter Wills Centre for Bioinformatics) both have dedicated bioinformatics research programs. Tasmania has announced an Intelligent Island Program, which supports the Tasmanian Centre of Excellence for Bioinformatics.

India: India's Department of Biotechnology (DBT) initiated a bioinformatics program to create a network-based infrastructure that now extends across 57 universities and public-funded institutions. This initiative comprises research groups involved in database creation, molecular modeling and algorithm development. The DBT has pledged $65 million for genomics research over the next five years, and has announced plans to enhance the infrastructure for bioinformatics research in public-funded institutions. The Indian bioinformatics market was worth about $25 million in 2001, contributing to about 51 percent of the overall Indian biotechnology market.

The most crucial advantage for India lies in the low cost of development and the high success rates enjoyed by bioinformatics companies in the country. The Indian advantage also stems from strong government support for the biotech sector and the availability of technical expertise, which gives an impetus to the research process and the demand for bioinformatics tools. The low number of competitors makes India attractive to new entrants. India has already made a mark in the IT sector and has a strong IT infrastructure, as well as skilled manpower, which would help it to become a strong player in the bioinformatics market.

Growing volumes of genomics data and increasing numbers of participants contracting work to Indian companies have encouraged many pharmaceutical, IT, and biotechnology companies to enter the bioinformatics sector. Indian IT companies such as Tata Consultancy Services (TCS), Cognizant Technologies, Infosys, Wipro, and Satyam have already set up their bioinformatics divisions. Not far behind are pharmaceutical companies such as Dr. Reddy's Laboratories, Ranbaxy, Biological E, and Nicholas Piramal that have either opted for the joint venture route or have tied up with start-up companies. India is also witnessing the emergence of pure-play bioinformatics companies such as Strand Genomics. Government and private institutes, as well as participants such as the National Institute of Information Technology (NIIT), are fostering the growth of a workforce skilled in bioinformatics.

Singapore: Bioinformatics is an area where Singapore can leverage its position as a country with a thriving IT industry to its advantage. Unlike biological sciences, bioinformatics’ expertise in Singapore may be easier to develop as Singapore has an ‘IT culture’. However, bioinformatics is not just IT; the ‘bio’ component is as important. Singapore expects its efforts in bioinformatics education to pay off in the form of a talented pool of bioinformaticians.

Singapore houses a number of key bioinformatics institutions. The Bioinformatics Institute (BII), a division within the Biomedical Research Council (BMRC), is one such institution. The BII, in partnership with the National University of Singapore (NUS), has set up a bioinformatics graduate program. This includes a two-year Masters program in Bioinformatics (by course work). The Singapore BioMedical Computation Resource (SBCR) is a national resource that will allow public (academic, research) institutions and organizations access genomic data as well as run biomedical and bioinformatics applications (BLAST, FASTA, and CLUSTALW). The Bioinformatics Center (BIC) at the NUS was set up in 1996 with an initial funding from the Economic Development Board (EDB). Now, it receives funding from A*STAR, GlaxoSmithKline, and NUS. BIC aims to pursue leading-edge research in the field of bioinformatics and life sciences, promote and develop state-of-the-art services in bioinformatics, and to offer informatics solutions to complex biological problems for Singapore and international scientific users with possible commercialization.

BIC has research groups at Kent Ridge Digital Labs (now I2R), the Centre for Natural Product Research (CNPR), and the Institute of Molecular and Cell Biology (IMCB). New groups are emerging in other research centers and life sciences departments. BIC is among the first in the region to undertake research in bioinformatics.

The key bioinformatics initiatives of Singapore include the BioMed Grid (BMG), another development in this area. It comprises a network of distributed computing resources in Singapore and collaborates with other R&D centers in the USA, Europe, and Japan. The other key initiative is the S* Life Science Informatics Alliance. This alliance is an attempt by six top institutions from five continents to share their resources to establish global course modules in bioinformatics. The six institutions, led by the NUS Bioinformatics Centre as the Secretariat, include Stanford University, Karolinska Institutet and Uppsala University in Sweden, University of Sydney, and the South African National Bioinformatics Institute (SANBI) at the University of Western Cape, South Africa.

South Korea: The South Korean Ministry of Science and Technology (MOST) declared 2001 as the Year of Biotechnology, and is setting out to promote developments in this industry. The ministry planned to nurture 600 biotech companies by the end of 2002 to make South Korea the seventh most developed country from its current fourteenth place in terms of competitiveness in the industry. Some of the key factors responsible for the country's attractiveness include domestic potential, government policies and favorableness to multinational companies, investment climate, infrastructure, attitude of private sector toward cutting-edge technology, and South Korea's position as an international hub. Bioinformatics plays a crucial role in Korean biotech plans.

An important advantage of Korea in bioinformatics is its mature IT industry. The bioinformatics onslaught in Korea is led by the chaebols (large industrial groups) such as LG, SK, and Samsung. These companies have established new bioinformatics teams. The bioinformatics industry also finds support from pharmaceutical companies, such as Choungkeundang and Green Cross. Some of the start-up bioinformatics companies in Korea include Bioinfomatix, Inc., Pax GENETICA, Inc, Macrogen, IDRTech, Badasoft Co., SmallSoft Co., BITEK CHEMS, Inc., IStech Co., IDGENE, Inc., RNA, Inc., Genoprot Co., and Proteogen.

Some of the public institutions involved in bioinformatics research include the Korean Society of Bioinformatics (KSBI), the Biological Research Information Center (BRIC), the National Institutes of Health (NIH), the Korean Institute of Science and Technology Information (KISTI), the Korea Research Institute of Bioscience and Biotechnology (KRIBB) and 21c Frontier: The Center for Functional Analysis of Human Genome.

Asia Pacific definitely enjoys a distinct advantage in bioinformatics. The strength of its IT sector along with the presence of a large workforce skilled in IT will enable a number of countries in the region to grab opportunities in bioinformatics. This large pool of technically skilled personnel can be used to meet the demand for bioinformatics in other regions as well. Growth in the volume of genomic data along with technological advances and increased automation of the R&D process present bright growth prospects for bioinformatics worldwide and Asia Pacific is well placed to harness the same.

If there are a couple of constraints, it will be Asia Pacific’s ability to hard- and soft-sell its skill sets to get a chunk of the global pie as well as the low expenditure on biopharma R&D locally. Only time can reveal whether countries in the region have the resourcefulness needed to play a winning game in bioinformatics.

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