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Growth in Mass Spec Sales Helps Proteomic Market Grow Slow and Steady, Report Finds

This article has been updated from a previous version, which mistakenly listed Solexa, instead of Sigma-Aldrich, among companies developing proteomics reagents.
Despite an ongoing slowdown in the overall growth of proteomic tools, mass spectrometry sales continued to grow, according to a report from a life sciences consulting group.
And looking to the future, higher-margin consumables will snare a greater slice of the proteomics revenue pie, it said.
The report, issued this week by TSG Partners, said that the market for proteomics and small-molecule analysis represents an industry with more than $4 billion in sales in 2005. By 2010, sales are expected to reach more than $6 billion, representing annual compounded growth of 6 percent.
Overall, the report’s authors said that proteomics has seen a slowdown as pharmaceutical firms and biotech companies pared their R&D spending and governments in the US and Europe cut back funding to academia.
Those decreases were offset in part, however, by other factors including an increase in the use of proteomic tools for biomarker research and the wider adoption of proteomic tools in the applied markets.
Harry Glorikian, managing partner at TSG, said that in particular mass spec sales have been growing year-over-year, jumping about 13 percent in 2005 from 2004, compared to increases of about 11 percent in 2003 and 2004. In total, mass spec sales in the proteomics/small molecules sector reached $1.4 billion in 2005.
Figures for 2006 have not been calculated yet.
“I just think people were regrouping and kind of figuring out what they wanted to do next,” Glorikian said of mass spec makers prior to 2006. “Biomarkers were still very young, nascent. I think people kind of honed their strategies, figured out what they wanted to do from a proteomics standpoint.”
In the end they decided to move aggressively during the past year to bring new mass specs with higher resolution and greater sensitivity to market [See PM 06/01/06  and 03/16/06].
At an analyst conference in September, Waters CFO John Ornell said that after laying dormant for the past few years, new MS offerings by the company this year have fueled internal projections that the instruments will end 2006 with double-digit growth, percentage-wise [See PM 09/28/06].
Sales of mass spectrometers from other companies similarly indicate moderate-to-strong growth. Applied Biosystems, which TSG said is the leader in the space, reported that during the quarter ended Sept. 30, mass spectrometer product sales rose 19.6 percent to $116 from $97 million during the year-before period. During the first three months of 2006, mass spec sales at ABI climbed 9 percent year over year while sales during the next three months rose 13 percent.
“Over the past two-and-a-half years, we have refreshed all of our mass spectrometry product lines to target high-growth areas such as biomarker discovery and applied markets applications,” Tony White, interim president of ABI, and CEO of ABI’s parent Applera, said at the time.
Thermo Fisher’s President and CEO Marijn Dekkers also has said its mass specs are doing “very, very well” [See PM 10/26/06].
Glorikian said that in 2007 applied market testing will be a major driver of sales of the instruments. “[The] Applied market appears to be a fast growing [one] given worldwide concerns regarding contamination and new regulations focused on food safety,” he said. “Many MS companies have introduced MS systems tailored to address this market.”
In the liquid chromatography space, TSG said “stable growth” should continue with “next-generation ultra performance LC products…key for long-term market growth.”
While Waters is the leader in that segment, Agilent Technologies is likely to improve its position as a result of its LC product launches during the past year, TSG said. The company released is 1200 Series HPLC in January [See PM 01/26/06].
Similarly, TSG said Agilent’s presence in the mass spectrometry market could grow due to launches in that space during the year.
The report also said that while the proteomics market is still driven by instruments, and therefore are vulnerable to slowdown in capital expenditure by pharma, biotech, and academia, market share in the future would shift toward consumables due to advances in mass spectrometry sample preparation and favorable adoption in the applied markets.

“I just think people were regrouping and kind of figuring out what they wanted to do next. Biomarkers were still very young, nascent. I think people kind of honed their strategies, figured out what they wanted to do from a proteomics standpoint.”

“Sample preparation techniques used to be significant bottlenecks in the biomarker discovery market, but today several companies, including Sigma-Aldrich, Beckman Coulter, and Agilent offer protein depletion kits, proteome partitioning solutions, and liquid chromatography solutions, respectively, to identify least-abundant proteins,” Glorikian said. 
Geographically, India and China remain the most fertile markets for growth, Glorikian said, though vendors will need to be aware that while India has been focusing much of its research on developing products for its own population, China has its focus beyond its own borders.
“First of all, I think it affects [vendors’] distribution, to understand what the goal of the customer is. If you’re exporting, there’s a big push for applied markets, if you’re using [tools and instruments] internally to develop drugs and so forth, that’s still more of a pharma, discovery, QC/QA positioning,” Glorikian said.
Domestically, he predicted that despite the current tight-fisted funding environment, future possible initiatives such as projects for stem cell research and the human cancer genome project will revive segments of the academic market.
Glorikian also said that opportunities for mergers and acquisitions in the life sciences market abound, and transactions along the scale of Thermo Electron’s merger with Fischer Scientific could be repeated in 2007. Life science companies, he said, have consistently grown by 6 to 8 percent annually for the past decade and beyond.
“There is industrialization going on…certain parts of this market are maturing. The [ratio] of immature to mature is huge, but … industrial companies like the growth rate, and, I think, would like a product line or group in their portfolio” with that kind of growth rate, he said.

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