The worldwide market for bioinformatics is expected to reach $1.7 billion by 2006, driven by bioinformatic technologies that decrease the time and money required for drug discovery and development. Emerging bioinformatic applications could reduce the cost of drug discovery by 33% and also accelerate the process by 2 years, according to a new Front Line Strategic Market Report entitled Bioinformatics, A Strategic Market Analysis.
Consisting of the content, analysis software, and IT infrastructure provider segments, bioinformatics will grow at a compound annual growth rate (CAGR) of 20%, with the largest growth in the analysis software segment. Large volume data mining and the need for analysis and visualization tools to support complex analysis, such as relationship modeling, will drive the $202 million analysis software segment to grow to $634 million in 2006.
One of the biggest questions facing users of bioinformatics is whether to purchase content or technologies from commercial vendors, or to develop tools in-house to meet the company's specific needs. Front Line estimates that pharmaceutical and biotechnology companies will continue to allocate 60% of their total bioinformatics spending to commercial vendors, totaling $1.1 billion in 2006.
Currently, companies allocate the largest share of their bioinformatics budgets to content, spending $225 million in 2001, and doubling to $445 million in 2006 as the availability of comprehensive and annotated data sets increases. Leading content suppliers include Celera, which provides genome data for DNA sequencing, and Incyte, which provides gene expression data.
While genomics currently represents the largest application segment for bioinformatics spending, the most significant growth opportunities are presented in proteomics and pharmacogenomics, which will account for $469 million and $351 million in 2006, respectively. Specifically, proteomics will grow at a 39% CAGR through 2006, given that it is the most direct way of identifying and studying drug targets. In addition, pharmacogenomics will grow at a 38% CAGR, enabling the development of therapeutics tailored to patients' genetic profiles. Tempering the growth will be a lack of standard data formats, the lack of common protocols, and interoperable technologies. This will present a significant barrier for end-users when it comes time to integrate data from various sources.
Nonetheless, pharmaceutical and biotechnology companies will continue to seek tools to aid them in identifying relationships across biological data types. As bioinformatics is more widely applied to discovery and development, end-users will adopt solutions that streamline the access, tracking, interpretation and sharing of data from disparate sources and data types, with minimal impact on resources.