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Bio-IT Market Update. Debra Goldfarb Group Vice President, WW Systems and Life Sciences dgoldfarb@idc.com. Agenda. Bio-IT Infrastructure Practice Overview Overall Biotech Market Trends Global EMEA Asia/Pacific Bio-IT Forecast Update and General Trends By sector By customer type

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bio it market update

Bio-IT Market Update

Debra Goldfarb

Group Vice President, WW Systems and Life Sciences

dgoldfarb@idc.com

agenda
Agenda
  • Bio-IT Infrastructure Practice Overview
  • Overall Biotech Market Trends
    • Global
    • EMEA
    • Asia/Pacific
  • Bio-IT Forecast Update and General Trends
    • By sector
    • By customer type
  • Final Thoughts
  • Q & A
bio it definition and market view

Pharmaceutical

  • Drug discovery
  • Pharmacogenomics
  • Clinical trials
  • Aging
  • Biotechnology
  • Informatics
  • Genomics
  • Proteomics
  • Monoclonal antibodies
  • Protein engineering
  • Target gene therapy
  • Healthcare
  • Disease research & management
  • Diagnostics
  • Regenerative biology
  • Clinical research

Bio-IT

The use of information technology to create, organize, analyze, store, retrieve and share genomic, proteomic, chemical and clinical data in the life sciences.

  • Academic Research
  • Basic research
  • Education
  • Training
  • Government
  • Military
  • Research/R&D
  • Funding
  • Regulation
  • Intellectual Property
  • Bioterrorism
  • Environment
  • Waste management
  • Environment clean-up
  • Agriculture
  • Disease resistant strains
  • Novel therapeutics
  • Genetically modified stock
  • Chemical
  • Manufacturing
  • Petroleum
Bio-IT Definition and Market View
big themes
Big Themes
  • Boom--bust cycle?
    • We are taking a breath….
    • Market is in nascent stage…there will be casualties
  • Business models remain fluid
    • Companies are struggling with the right model/mix
    • High profile forays into market were not well received
  • Complexity of industry should not be underestimated
    • Web of interdependencies is growing and will continue to grow over time
    • Industry disaggregation will create turmoil and opportunities for new companies, business models, skills etc…
global biotechnology trends

Market Capitalization

Total Investment

GlobalBiotechnology Trends

Global Biotech Investment & Market Capitalization have fallen off significantly since 2000

  • Triggers …
  • Market-wide investor “flight”
  • Product setbacks

Source: BioWorld / Ernst & Young

global biotechnology revenues vs r d
Global Biotechnology Revenues vs. R&D

Source: Ernst & Young LLP

biotech market conditions emea
Biotech Market Conditions: EMEA
  • EMEA
    • $49 billion (57%) drop in Biotech market capitalization since market-wide slump began in 2000
    • Sector will remain soft through mid-2003
    • Public equity investments have shut down, while private investment is still flowing (rate of $1 billion/year)
    • Important for investors to appreciate the time frame
    • U.K. and Germany still dominate, followed by France, Denmark and southern Sweden
european r d environment
European R&D Environment
  • A significant percentage of R&D dollars leave Europe for US and ROW markets
    • 59% of EU R&D stayed within European borders
    • 34% US
    • 7% ROW
      • This trend is accelerating…..
      • In comparison, 80% of R&D spending by the US Pharma industry stayed in the US
  • Data suggests key trends:
    • The European industry is losing competitiveness as compared to the US
    • There is a growing concentration of R&D into North America
biotech market conditions asia pacific
Biotech Market Conditions: Asia/Pacific
  • AP Biotech market is very young, particularly outside of Japan
  • Over half of the AP Biotech market is public sector
  • Private sectors are being “jump started” by government decree
  • Tens of billions of dollars are being invested in the Asia/Pacific biotech economy
  • Expect a very different picture in 5-10 years

Source: IDC 2002

japan bioscience environment 2002
Japan Bioscience Environment, 2002
  • Pharma industry - R&D spending in the industry is lower than in the US or Europe; companies are mostly family owned and have cash in the bank
  • Biotech industry - during 1980s was focused on process technology, not life sciences R&D. Emphasis now changing now, but developing a strong domestic biotech industry will take time ( recent 30 million deal between daiichi pharmaceuticals and celestar lexico sciences)
  • Linkages between medical and biological research need improvement for large pharmacogenomics research in Japan
  • Funding systemfor public sector research is not well developed. Large amounts of money are given out by a handful of senior scientists at the large universities
regional picture bio it infrastructure development 2002 2006
Regional Picture, Bio-IT Infrastructure Development, 2002-2006

Public and Private Investment and Priority

Rate of Development

Source: IDC 2002

worldwide bio it forecast by sector
Worldwide Bio-IT Forecast by Sector
  • Hardware is the largest sector today. (includes servers, clients, storage, networking, accelerator boards, etc.)
  • End user spend on services will overtake hardware in 2003.
  • By 2006, services will account for 42% of the total market.
  • Total market growing from $12.2B in 2001 to $30.3B in 2006.
  • Five Year CAGRs
    • Hardware: +15.8%
    • Software: +25.4%
    • Services: +21.2%
worldwide bio it forecast by customer type
Worldwide Bio-IT Forecast byCustomer Type
  • Large Pharma is the biggest and fastest growing customer segment, accounting for $3.6B in 2001.
  • Biotech accounted for $3.3B in 2001, but is growing slightly slower because of a contraction in VC investment.
  • Five Year CAGRs
    • Large Pharma: +24.3%
    • Medium Pharma: +18.3%
    • Small Pharma: +12.6%
    • Biotech: +21.1%
    • Gov/Academic: +15.1%
    • Agribusiness: +17.1%
final thoughts
Final Thoughts
  • Stay the course
    • The market will evolve in a chaotic manner…those suppliers who stay in the game will dominate
  • Continue to build out your alliances and partnerships
    • Key strategic imperative
  • Investment and commitment remain challenging
    • Huge pressure for biotechs to perform
      • Inflection point vs. continued infrastructure investment
  • Be aware of Pharma Y2K
    • In the next few years, FDA approval must be submitted via a fully electronic process