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Bioinformatics Wary of Bust, Biopharma Spends Dollars More Wisely

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The lessons of bioinformatics’ recent boom and bust cycle have not been lost on Rainer Fuchs, vice president of research informatics and operations at Biogen Idec.

Fuchs, who spoke at Bio-IT World’s and Cambridge Healthtech Institute’s inaugural Bridging Discovery and IT conference in Philadelphia in late September, said that he’s “seeing a shift from lofty expectations” about what bioinformatics can accomplish “to more realistic, smaller projects with a better [return on investment].”

Fuchs asked for a show of hands from those attendees who saw “significant cost savings” in drug discovery from their investment in informatics over the last several years.

Not one hand was raised.

The response could be attributed to the heightened exuberance that swept the industry in the wake of the Human Genome Project, when market research firm Frontline projected that bioinformatics could reduce the cost of drug discovery and development by 33 percent by 2004, and Boston Consulting Group estimated that informatics could shave $280 million off the $800 million cost of developing a typical drug.

The reality, as the response to Fuchs’ request highlighted, has been quite different. Not only have internal investments in bioinformatics failed to pay off, but the informatics software market has not lived up to its promise of half a decade ago.

Fuchs cited “anecdotal evidence” that most biopharma companies have shifted their informatics investments away from cutting-edge technologies and toward “tried and true” methods. “There’s a move away from investing in new technology toward improving the use of current technologies,” he said.

As an example, Fuchs cited the “changing mix” of his own informatics budget between 2001 and 2005. The shift has been toward projects that fall under the heading of “operational efficiency” — lab automation, workflow management, LIMS, and other projects with “easily demonstrable benefits” — and away from “strategic” investments that carry more risk and prove much more difficult to calculate ROI.

But this new era of caution doesn’t mean that discovery firms aren’t trying out new technologies. Even though Fuchs warned that new informatics tools for pathway analysis and biosimulation could be “the next land of unfulfilled promise,” he recommended that informatics managers reserve a modest amount of “play money” within their budgets to invest in those technologies.

Some risk will always be necessary to remain competitive in the drug discovery industry, Fuchs noted, but informatics groups who are wary of repeating past mistakes should only “sprinkle” their portfolios with these higher-risk investments.

— Bernadette Toner

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