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Bioinformatics: The Rosetta Stone of Life Science Research.

What is bioinformatics? As with many other buzzwords in the life science arena, such as proteomics, it has become an all encompassing term, used to describe everything from software to hardware to databases. Also like the other buzzwords, it is a field that deserves all the attention it is getting. With an estimated growth rate of more than 30% over the next five years, the bioinformatics market will play a fundamental role in determining the progress and outcome of life science research.

Simply put, bioinformatics turns data into knowledge. It is the application of computer technology to the management of biological information. In recent years, the amount of data generated by new analytical techniques such as sequencing, single nucleotide polymorphism (SNP) detection, and gene expression has grown exponentially. Bioinformatics products are the tools for storing, organizing, evaluating, integrating, analyzing and distributing this data.

The task at hand is enormous. GenBank, the National Center for Biotechnology Information's (NCBI's) DNA sequence database, contains over eleven million base pairs of genomic information. The latest microarray and sequencing technologies can generate thousands of data points each day. Latest estimates put the number of genes in the human genome at 30,000, the number of proteins at more than 100,000, and the number of SNPs at three million.

Because of the rapid growth of the market, the recent entries of major players, and new strategies and collaborations, the bioinformatics market is still evolving. "Bioinformatics: Realizing the Potential of Genomics and Proteomics," a new report from Strategic Directions International, divides the bioinformatics market into four segments: databases, software, hardware and custom consulting. The bioinformatics market, as measured by these four segments, is estimated to have totaled over $700 million in 2000.

It is among the fastest growing segments of all life science related markets. The enormous potential of the market has attracted major companies such as IBM and Compaq, as well as spawned over 100 start-up companies. Among the companies that first entered the market were Incyte Pharmaceuticals, Oxford Molecular and Molecular Simulations. Perkin-Elmer (now Applied Bioystems) enlarged its market involvement with its purchase of Molecular Informatics in 1997. Although companies specializing in bioinformatics or bioinstrumentation were the first companies to target the market, the market's growth soon attracted established computer companies. In 2000, both IBM and Compaq announced $100 million investments in bioinformatic projects (see IBO 10/ 15/00), signaling a new state of development for the market.

Pharmaceutical companies alone are estimated to have spent more than $300 million last year on bioinformatics products. But pharmaceutical companies are not the only customers willing to invest in a bioinformatics program. Bioinformatics tools are essential for any analysis of genomic or proteomic data; thus, academia, government and the biotech industry are also demanding the latest generation of bioinformatics databases and software.

The first step in the bioinformatics process is the accumulation and storage of data. Databases, which store and organize biological information, are the heart of bioinformatics. Databases usually store one type of information, such as DNA sequences, gene expression data, or protein sequence and structure data. There are numerous public databases, ranging from GenBank's sequence database of the human genome to the non-profit SWISS-PROT protein database. Private databases are available on a subscription basis from companies such as Celera Genomics, Incyte and Cellomics. The integration of public and private databases and of different database formats is currently one of the challenges facing bioinformatics technologies.

Databases provide much of the information processed by bioionformatics software. Bioinformatics software sorts, integrates, analyzes and distributes database contents. Two types of software dominate the bioinformatics software segment: data mining software and visualization software. Data mining software facilitates gene discovery, and the analysis of DNA sequence functions and gene expressions, among other research tasks. The software searches databases for patterns, relationships and functions among cellular components. Companies that specialize in data mining software include LION bioscience and Viaken. Visualization software allows researchers to draw upon raw data to model a structure for analysis, comparison and classification. Pharmacopeia and DoubleTwist are two companies that provide such software.

A smaller but growing segment of the bioinformatics market is custom consulting. Enterprise wide information technology and specialty information technology consultants design customized software to automate and integrate all aspects of biological data analysis. They also typically provide installation, maintenance and training. Enterprise wide systems, when compared to specialty systems, are designed for larger scale integration of various bioinformatic capabilities. Companies providing these consulting services include Genomica and NetGenics.

Bioinformatics hardware includes servers, desktop computers and storage devices. As expected, the hardware segment is dominated by traditional computer manufacturers such as Compaq (see IBO 10/15/00), IBM and Sun. Hardware specifically designed for the bioinformatics market often features faster processing of algorithms and greater data storage capacity. Hardware vendors specializing in this market include Paracel (part of Celera) and TimeLogic.

The bioinformatic market can also be divided by those companies offering broad-based solutions, providing database and software capabilities, and those specializing in one part of the market. Broad-based companies include Celera Genomics, CuraGen and Silicon Genetics. However, the majority of companies in the market are specialized.

Recent deals affirm the importance of bioinformatics to the future of life science research in general, and drug development in particular, and illustrate just how much companies are willing to spend to secure their bioinformatics capabilities. Following their five-year, $100 million deal announced in 1999, Bayer signed a $25 million agreement with LION bioscience last October to develop a pharmacophore platform in collaboration with Tripos. In addition, Bayer and CuraGen entered into a five-year, $124 million bioinformatics and drug development deal. Monsato and Rosetta Inpharmatics entered into a three-year, $15 million agreement for crop gene expression data. This month, IBM announced a $1.7 billion IT deal with AstraZeneca, part of which involves technology for bioinformatics applications.

A future trend of the bioinformatics business appears to be collaborations, alliances and acquisitions. Driving such deals is the need to integrate technologies and a fierce competitive environment. Among recent partnerships were Viaken Systems and Hewlett Packard, Incyte Pharmaceuticals and SGI, Informax and Amersham Pharmacia Biotech, Gene Logic and Affymetrix, Celera and LION bioscience, and IBM and Structural Bioinformatics. Acquisitions include LION bioscience's purchase of Trega Biosciences (see IBO 1/31/01), Orchid Biocomputer's purchase of GeneScreen, and Incyte's acquisition of Proteome.

Government and academic institutions have also provided resources for the market. The US Dept. of Energy, Celera and Compaq are working together to mine the human genome for functional genetic information. In addition, the Lilly Endowment recently awarded Indiana University's Genomics Initiative a $105 million grant. Japan's budget for fiscal year 2001 allocated over $22 million to bioinformatics. The governments of China, Germany and the UK have also all made major investments in bioinformatics programs.

The true potential of bionformatics has yet to be realized. As the defining characteristics of the bioinformatics market evolve and the development of its leading players emerge, so will the direction of the field. The competition that breeds new developments also threatens to create an inefficient approach in which the lack of standardization and the duplication of effort drains resources. An integrated approach that combines all segments of bioinformatics, and that could eventually include chemi-informatics (the organization and analysis of small organic molecule and high-throughput screening data), and LIMS, appears to be the approach for now. However, with the fruits of genomic-based drug discovery yet to be truly realized, just where bioinformatics fits into the process is still being determined.

COPYRIGHT 2001 Strategic Directions International Inc. (SDI)
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Copyright 2001 Gale, Cengage Learning. All rights reserved.

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Publication:Instrument Business Outlook
Date:Feb 15, 2001
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