Navigant Consulting, formerly Front Line Strategic Consulting, has released a new report on the bioinformatics sector that pegs the current worldwide market for analytical software tools at $245 million. The firm expects this market to grow at a compound annual growth rate of 9.3 percent over the next five years, reaching $375 million by 2009.
The numbers seem small by comparison to previous Front Line reports on the bioinformatics market, one of which predicted a CAGR of 20 percent and total spending of up to $1 billion by this year [BioInform 01-28-02]. Andrew Kim, the analyst who prepared the most recent report, “Bioinformatics Analysis Software: A Strategic Market Outlook,” said that the smaller numbers are due to the company’s narrowed focus this time around. While previous reports included analytical software along with content and IT infrastructure, the company’s latest research looked at software alone — the segment of the market that Navigant deemed the “most volatile,” and therefore of greatest interest to the industry, Kim said.
Even so, Front Line’s earlier estimates for the software segment of the market have proven to be overly optimistic. The company’s 2002 report pegged the software subsector at $202 million at the time, growing to $634 million by 2006. But its latest analysis finds that “demand for informatics tools will not likely increase dramatically because most bioinformatics tools merely improve rather than revolutionize drug target identification and validation,” according to the executive summary. As a result of this modest growth trend, the company reined in its estimate to reach only $375 million by 2009.
By segment, Navigant estimates that genomics applications — including DNA sequence and gene expression analysis — currently make up 55 percent of analytical software sold, with proteomics (17 percent), cheminformatics (18 percent), and pharmacogenomics (10 percent) making up the balance. By 2009, the report predicts that genomics software will lose some market share — slipping to 50 percent — with the other segments increasing to 20 percent, 19 percent, and 11 percent, respectively.
While the overall market expectations have changed, the primary challenges for the sector remain the same, according to the report: Lack of interoperability and multiplatform capabilities among commercial solutions tops the list of key limiting factors for the sector, closely followed by the lack of standardization and difficult integration of applications.