A new report predicts a 20 percent compound annual growth rate over the next four years for the bioinformatics market, with a current market of $697 million set to reach $1.7 billion by 2006.
The report, “Bioinformatics, a Strategic Market Analysis,” from Foster City, Calif.-based market research firm Front Line Strategic Consulting, is in line with the firm’s 1998 report on the same subject. In that report, Front Line predicted a 30 percent CAGR that would taper off after 2001, with a $290 million market in 1998 reaching over $1 billion by 2004.
Front Line defines the bioinformatics market as “the content, analysis software, and IT infrastructure provider segments,” and sees the largest potential for growth right now in analysis software. The current market for this segment, $202 million, will grow to $634 million in 2006, according to the report, driven by demand for large-volume data mining, analysis, and visualization tools.
Front Line estimates that pharmaceutical and biotechnology companies will allocate 60 percent of their total bioinformatics spending to commercial vendors over the next several years, and predicts this spending to total $1.1 billion in 2006.
The content segment, $225 million in 2001, is expected to double to $445 million in 2006, “as the availability of comprehensive and annotated data sets increases,” according to the report. Significant growth is also predicted for applications for proteomics and pharmacogenomics, which Front Line predicts will account for $469 million and $351 million in 2006, respectively.
Noting that bioinformatics has so far contributed primarily to the pre-clinical stage, Front Line posits that it will soon begin to play a greater role in large-scale phase III trials. This trend, combined with bioinformatics’ continued role in discovery, which is expected to improve the success rates of drug candidates moving down the development pipeline, leads Front Line to conclude that bioinformatics applications could eventually reduce the cost of drug discovery by 33 percent and speed up the process by two years.