Having generated an estimated $535 million in 2002, the global combinatorial chemistry markets are projected to reach $852 million in 2009, at a compound annual growth rate of 6.9 per cent.
For the moment, however, reduced R&D spending by pharmaceutical and drug discovery biotech companies, among the biggest consumers of combinatorial chemistry services, is negatively impacting market growth.
Competing companies are exploring several strategies to fend off the impact of such challenges. Shifting the process of compound synthesis to low-cost countries in Eastern Europe and the Asia Pacific could help conserve critical financial resources. Additionally, setting up in-house drug discovery research programmes can help companies develop leads, which they can then lease out to pharmaceutical and biotech companies.
In a related opportunity, companies can look at licensing drug discovery tools including software and instrumentation to pharma and biotech companies.
As opportunities to enter into ashared-risk' agreements with Big Pharma decrease, combinatorial chemistry companies must consider developing similar agreements with drug discovery biotech firms instead.
Biotech companies in search of candidates for identified targets are far more likely to enter agreements that require the payment of future royalties and licensing fees than increasingly cost-conscious Big Pharma. Companies can also explore the possibility of generating ashared-risk' agreements from existing contract and catalogue business.
Growth prospects for the combinatorial chemistry markets are expected to become brighter as sustained genomics and proteomics research yield an increasing number of validated targets. Additionally, as pharmaceutical companies feel growing pressure to identify and develop new therapies in order to fill empty pipelines, their R&D spending is likely to correspondingly increase.
Accordingly, the combined R&D expenditure of drug discovery biotech and the top 20 pharmaceutical companies which touched $57 billion in 2002 is expected to top $73 billion by 2006. R&D spending of the top 20 pharma companies is anticipated to continue growing at approximately six per cent through 2006, although the percentage dedicated to combinatorial chemistry services is not expected to increase over the forecast period (20022009).
Conversely, the growth rate of biotech R&D spending is expected to decrease over the same period. However, biotech companies' consumption of combinatorial chemistry products and services is projected to increase as a percentage of their total R&D expenditure.
Major technological trends such as the development of libraries containing complex natural product-like compounds are expected to strongly influence the direction of the combinatorial chemistry markets. Market preference also seems to be leaning toward smaller, more focussed, aparallel' libraries. In fact, significant advances in informatics and modelling are enabling researchers to develop such libraries, which yield greater value.
World Combinatorial Chemistry Markets http://healthcare.frost.com
