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Undaunted by Recent Tragic Events, Microarray Sector Continues to Take Off

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The air freight slowdown and economic fluctuations in the wake of the Sept. 11 terrorist attacks in the US have not interrupted the growth trajectory of the biochip and microarray sector in any significant way, companies have told BioArray News.

“We’re feeling no immediate effect at this point in time,” said Doug Forsyth, an Agilent spokesperson. “We’re still able to ship our chips around the country.”

Affymetrix also said it had experienced no difficulties in shipping its products, and that business had continued as usual, apart from the momentary scramble to ensure that its worldwide staff was safe in the wake of the attack.

Meanwhile, a study released by Silico Research of London projected that total expenditure on microarray technology would reach $2.21 billion by 2005.

These reports come after Netherlands-based nucleic acid purification maker Qiagen announced Sept. 21 that the shipping and travel disruptions following the Sept. 11 tragedy would drive down its third-quarter revenues by 11 percent.

But while Qiagen ships its consumables for just-in-time delivery with customers often ordering them overnight, Affymetrix director of investor relations Anne Bowdidge noted that Affymetrix customers usually order their chips well in advance, so these orders are less likely to be significantly impacted by a week of restricted travel and shipping.

“We’ve also put contingency plans in place,” Bowdidge said. “We have a warehouse over in Brussels. If we have any potential problems with the airlines here, we have the facility to make sure we’ve got arrays in Europe.”

Report Predicts Multi-Billion Dollar Biochip Market

The Silico report forecast that the microarray market would more than double in the next four years, from $1.06 billion in 2001 to $2.21 billion in 2005 because high-throughput microarray technology “is one of the most important enablers and drivers of the trend towards the industrialization of pharmaceutical research and development processes,” its authors wrote.

The study found that the R&D departments of nearly all medium to large biopharmaceutical companies have jumped onto the microarray bandwagon in the past five years, leading to a greater than 85 percent penetration of the market by microarray manufacturers and equipment makers.

But most of the microarray systems thus far implemented, the report said, have been pilot installations not designed to run efficiently in a high-throughput manner. According to the report, microarray companies have been more focused on developing the technology than in implementing the products effectively in the R&D process, but this is all beginning to change.

“Over the next few years companies will focus on pushing installed technology to full capacity and on building the technology into the discovery and development processes,” the report’s authors wrote. “ Implementing companies will do this before buying more capacity.”

As a result, the major growth will come in the services and consumables rather than in the area of scanners and arraying equipment, the report concluded.

The Silico Research report adds to a growing number of research reports that forecast a bullish market for microarray technology in the next five years. In May, Frost & Sullivan reported that the biochip and microarray market would reach $3.3 billion by 2004, while a report released by Drug & Market Development Publications in January.predicted the market would grow to $2.43 billion in 2006, and a June report published by Business Communications Company of Norwalk, Conn., concluded that the biochip sector will grow to just $1.1 billion by 2005.

In addition to accounting for microrrays, the Silico Research report also included in its calculations all forms of microarray-related equipment, as well as expenditures on “consulting, implementation, outsourcing and training”; and “setting up and running microarray experiments and maintaining the equipment.”

“This element of the total cost of implementing the technology is a significant portion of the overall expenditure on the technology and one of the least well understood,” the report’s authors said in a statement.

In the cost arena, the report also joined others in predicting that technology advances and an increased level of competition would drive down the price of the chip substrate from $1 to 10 cents by 2005.

The company has posted an executive summary of the report at www.Silico-Research.com.

— MMJ

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