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The High Throughput Screening Market for Drug Discovery September 27, 1999 Prepared by Marc Eichmann and Ilene Goldstein Description: The drug discovery market is evolving rapidly due to fast technological change. New developments in automation, liquid handling and detection as well as biochemistry and pharmacology are creating great uncertainty as to how new technologies will shape the future of the industry. New technological developments are increasing the throughput of High Throughput Screening (HTS) systems. As a result, pharmaceutical and biotechnology firms are testing more and more compounds against an increasing number of targets raising many questions. First, to what extent will the increased throughput in screening lead to more therapeutic compound discoveries? Second, to what extent will additional throughput diminish the drug development cycle for new compounds and how will it translate into additional earnings for pharmaceutical companies? Third, how will the different HTS supplier markets evolve as a result of the increasing screening volume capabilities? Technological change is also diminishing the cost for testing an assay point. However, it remains to be seen whether this trend will translate in increased drug discovery spending growth by pharmaceutical companies. The other question that arises is whether technological change will have value creation and capture performed by the same type of HTS equipment and consumable suppliers that prevail today. Drug discovery companies in general have also been setting up their screens faster thanks to technological innovation. They are acquiring increased know-how to develop reagents and assays for HTS faster and for multiple reaction detection technologies. Automation and standardization as well as better in house communication between therapeutic research areas and HTS departments are also fueling the trend. The assessment of how fast these different factors will lead to increased revenues for pharmaceutical companies through shorter drug lead development is uncertain. The HTS market will also be influenced by the success of small molecule discovery programs and targeted compound discovery. Will these drug discovery philosophies be more efficient than HTS of drugs in the future? Will they take research funds away from drug discovery or bring about new HTS activity? How will it influence the structure of the HTS industry? The objective of this study is to try to illustrate possible answers to these questions and identify the main levers that will shape the HTS industry.
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