Revenues Projected to Triple in Five Years in Emerging Combinatorial Biology Market

August 23, 2000, Redwood City, CA — A dozen key companies in the emerging combinatorial biology market will drive worldwide sales to triple over the next five years to $316 million in 2005, according to a new study by BioInsights of Redwood City, California. Combinatorial biology, which synthetically accelerates the evolution process that leads to genetic variations, will show the biggest benefits for the pharmaceutical industry, through development of such therapies as humanized monoclonal antibodies, and for the chemical industry, by yielding cleaner, lower-cost technology.

Initial revenues from collaborations and licensing deals will drive the market at a compound annual growth rate of 13% from 2000 to 2002, according to the BioInsights study. Then, as the combinatorial biology companies collect milestone and royalty payments and develop their own products, the market will increase at a compound annual growth rate of 35% from 2002 to 2005. The combinatorial biology market consists of four segments: directed evolution of industrial enzymes, which is expected to comprise the biggest share of sales over the next five years; combinatorial biosynthesis of small-molecule drugs; directed evolution of protein therapeutics; and combinatorial tools for drug target identification and validation. The protein therapeutics and target identification and validation segments will have the fastest growth rates.

These projections are part of an in-depth market and technical analysis by BioInsights titled Combinatorial Biology: New Products and Processes from Genetic Diversity. The report combines customer and company interviews with detailed technology and business strategy evaluations to produce a portrait of the total market.

The Combinatorial Biology report predicts that the continued success of industry leaders Genencor International and Novo Nordisk Biotech, as well the emergence of Maxygen, Diversa, and Enchira Biotechnology, will cause directed evolution of industrial enzymes to retain the largest share of the combinatorial biology market in 2005. The expanded success of Applied Molecular Evolution, BioInvent, Cambridge Antibody Technology, MorphoSys, Phylos, and Rigel will generate the highest growth rates for directed evolution of protein therapeutics and combinatorial tools for target identification and validation. The remaining market segment, combinatorial biosynthesis of small molecule drugs, will hold the smallest market share and growth rate through 2005, but will nonetheless see significant progress from segment leaders Kosan Biosciences and TerraGen Discovery.

Combinatorial Biology is the third in a series of reports from BioInsights, a research and consulting firm that specializes in emerging technologies and markets in biotechnology and pharmaceuticals. For more information on this report and to request a table of contents, contact BioInsights at 650-701-0280 or at marketing@bioinsights.net.