Arlington. Biodefense research is one of the
fastest growing markets for suppliers of life science products and
instrumentation. Government spending on biodefense research is likely to
continue to increase at a rate exceeding investment in other areas of
biological research and development, and is attracting both scientists and the
companies who support them. President Bush's authorization of the Project
BioShield Act last week is but one of many government initiatives to improve
the country's defenses against bioterrorism. Since the ability to effectively
combat bioterrorism largely depends on the information generated by biomedical
research on disease-causing
microorganisms and the immune system's response to
them, nearly $1.6 billion is allocated in 2004 to the National Institutes of
Health (NIH). This budget will help support
basic research on potential
agents of bioterrorism such as
anthrax or
smallpox as well as the development
of
vaccines,
diagnostic tests and therapies to detect and counter the effects
of a bioterrorist attack.
Although biodefense researchers represent a wide range of scientific
disciplines that have always been served by the life science industry, their
newly increased purchasing power and urgency of their work distinguish them
from other customer groups in the market. To help suppliers understand the
needs of these customers,
bioinformatics, LLC (http://www.gene2drug.com)
recently conducted a survey of currently funded biodefense customers as well
as those researchers planning to enter the field. The results of this study
were released today in the
consulting firm's latest report "Market
Opportunities in Biodefense Research."
The report reveals that currently funded biodefense researchers are using
the products of their existing suppliers, and when necessary, easily adapting
them to their applications -- indicating that suppliers should have little
difficulty in leveraging their existing product line in this market. In fact,
products from well-known companies such as
Invitrogen (Nasdaq: IVGN), Sigma-
Aldrich (Nasdaq: SIAL), Bio-Rad (Amex: BIO) and
Qiagen (Nasdaq: QGENF) are
widely used in biodefense
laboratories despite the fact that few of their
products are specifically designed for biodefense research.
"The widespread recognition and awareness of these brands -- particularly
in the cell
biology and
microbiology communities -- most likely contributed to
their high market share. Researchers already in the field are adapting
existing products to their biodefense applications which is likely to further
reinforce the dominant position of the market's leading companies because
customers tend to prefer suppliers and products with which they are familiar
over new market entrants," said Bill Kelly, President of BioInformatics, LLC.
The survey results also indicate that biodefense research is rarely the
exclusive focus of a scientist's lab. This finding further supports the
notion that potential new biodefense buyers can be found across the spectrum
of a supplier's existing customer base as researchers are attracted to the
field due to the availability of funding and the urgency of the mission. New
customers entering the market, however, may be embarking on new directions in
their research or employing new techniques or protocols for the first time.
As a result, these scientific customers may show a greater propensity to
switch suppliers at the start of their biodefense research. In this case, all
life science suppliers will be equally vulnerable to defections and/or
positioned to attract new customers, thus making it important to firmly
establish the applicability of a company's products for biodefense
applications.
The convergence of so many scientific disciplines and product categories
under the rubric of "biodefense" presents innumerable opportunities to cross
vertical and horizontal boundaries and create valuable applications that
deliver whole product solutions to end-users. "While suppliers can simply
address the biodefense opportunity as an application area within virtually all
of the segments they currently serve, alternatively they may choose to define
biodefense as a new and distinct market. When viewed as a distinct entity,
the biodefense market has no boundaries -- and the results of this study will
help companies shape the structure of the market, anticipate the strategies
and competitive advantages of various players, and assess the wisdom of
various alliances," concluded Kelly.