Market Size And Economics

The market for biosensors is still a niche market, and as expected there are various estimates for their total market. Data will be presented here for the years it is available in the open literature. Since data from industrial sources is inaccessible, it of course, is not included, although it would provide a more realistic picture of the past, present, and future market for the overall biosensor market in different areas. However, considering the consolidation fever prevalent in the current business world, it is not surprising that any type of financial projections or information is, and will continue to be, jealously guarded. As in all businesses, but particularly in developing ones, a biosensor company needs to be nimble and be able to seize opportunities as they occur.

Before we talk about numbers and market projections, it is perhaps worthwhile to mention some of the major companies in the biosensor market. According to the Cranfield University Report (1997) the three major companies are MediSense (acquired by Abbott in 1996), Bayer, and Boehringer Mannheim. Other companies include Affinity Sensors, BIACORE, YSI, Chiron Diagnostics, Diametrics Medical, i-STAT, Molecular Devices Corporation, Nova Biomedical, Universal Sensors Incorporated, Sandia Laboratories, Texas Instruments, Eppendorf, and LifeScan. Anticipating the increasing potential in this area, some of the larger companies are repositioning at least a part of their effort. For example, Smith (2001) indicates that the production of biochip and microarray technology has become a focus for Packard Biosciences. Packard acquired GSLI Life Sciences in October 2000 to create the spin-off company, Packard Bio Chip Technologies.

Similarly, DuPont—with its expertise in polymer thick films—is positioning itself to be a strong player in the biosensor market. DuPont acquired Cyngus, Inc., which developed the GlucoWatch biographer. This is the first noninvasive biosensor based on DuPont's thick film paste, and it easily monitors glucose levels twenty-four hours a day by analyzing fluids drawn through the skin. This is definitely an improvement in the quality of life for diabetics. Assured that it can make a major impact in biosensor development (Hodgson, 1999), DuPont is well-positioned to create a plastic display that could potentially replace the most expensive parts of the biosensor. Besides, their product will be lighter and of enhanced visual quality.

For example, in 1999, researchers at DuPont were investigating the development of disposable polymer thick film (PTF) biosensors. PTF inks are paints that contain a dispersed or dissolved phase and that acquire their final properties by drying. As the paint is cured on a suitable substrate, a specific electronic or biological function is developed in the film. A very specific advantage of PTF products is that they are compact, lightweight, environmentally friendly, inexpensive, and, most important of all, they lend themselves to manufacturing techniques. They can be easily folded, twisted, or bent, all of which are required properties for the components of a biosensor. With the ever-increasing pressure to provide cost-effective biosensors, DuPont is apparently a major player in the development of biosensors.

The universities and governments are also collaborating and consolidating their strengths for biosensor development. For example, Cranfield University is a world leader in biosensor research. Another group in England is the University of Manchester Biosensor Group. The Irish government too has created a National Center for Sensor Research (NCSR) (Bradley, 2001) at Dublin City University (DCU). DCU has a track record for biomedical and environmental sensors, and the Irish government provided $13.2 million to establish the NCSR. Its role is to develop chemical and biological sensors to solve society-related problems. One of the goals of the NCSR is to relate higher-education funding with the local economy.

The British government too has provided more than $2 million in funding (with matching funds from industrial backers) to promote the lab-on-a-chip concept (Henry, 1999) to be coordinated at the University of Hull. There are of course, many other examples. The given examples simply point out the importance placed by universities, industry, and government on collaborative schemes to facilitate the development of biosensors for different applications.

The Cranfield University Report (1997) estimated that in 1996 the world biosensor market was $508 million. In that year, glucose testing (medical) was the major application, with a sales of $170 million for MediSense (Abbott) and a sales of $165 million for Kyoto Diiachi/Bayer/Menarini. These two companies accounted for about two-thirds (65.9%) of the total sales of biosensors. The Frost and Sullivan (1998) report estimated the total U.S. market for biosensors at $115 million. This study analyzed the U.S. biosensor market in detail and indicated the following four areas where biosensor applications are expected to grow: medical home diagnostics market; medical point-of-care market; medical research market; and environmental, industrial, and other markets.

Rajan (1999) indicated that the biosensor market is expected to grow at a rate of 17% from 1998 to 2003. If we were to extrapolate this author's 17% growth factor for the years 1996 to 1997 and the Cranfield University numbers, the 1997 worldwide market for biosensors should have been around $592 million. This is close to the $610 million estimate of biosensor sales provided by Theta Reports (1998). The Theta study indicates that more than 50 different biosensor systems are available worldwide. Also, out of this $610 million in sales, $500 million was generated by clinical diagnostic applications. Out of this $500 million, 90% was related in some form or the other to home glucose testing for diabetics. Thus, glucose home testing is, and will continue to be, a major driving force for biosensor sales. This is not surprising since no other disease combines the two requirements that lead to mass monitoring: a large portion of the population are afflicted with diabetes (up to 1%) and frequent recording of blood glucose levels (up to 2 to 4 times a day) is required (Medical Device Technology, 1997). In the United States alone, more than 16 million individuals (half of which are undiagnosed) are estimated to suffer from diabetes (SBI International, 1997). Also, this last report indicates that between 600,000 and 700,00 new cases are diagnosed every year.

Theta Reports (1998) indicates that from 1997 to 2000 there will be a slow period of growth for biosensors, unlike the 17% growth predicted by Rajan (1999). However, the overall biosensor market for 2000 was expected to be $2 billion. Between 2000 and 2005, Theta Reports indicates a substantial increase in biosensor sales, with the sales increasing by a factor of 4.4 from $2 billion in 2000 to $8.8 billion in 2005. Theta Reports further estimates the sales of clinical genosensors to reach $1.6 billion in 2005. Chemcor Corporation, a developer of genosensor technology, estimates the market for this technology to exceed $1 billion by 2002. Ruth (2001) further estimated the market for molecular and cytogenetic testing devices to be $66 million in 2000. This was expected to increase to $100 million in 2005.

Quantech (2000) estimates that excluding home diagnostics, the overall worldwide in-vitro diagnostic market is $20 billion. This number is an order of magnitude higher than that predicted ($2 billion) by Rajan (1999). Since it does not include home diagnostics, the very wide discrepancies in the estimates are to be expected. Nevertheless, the estimates do provide an order of magnitude set of numbers that also indicate the range of the market estimates. Quantech further indicates that companies and laboratories account for most of the market in this area. For example, STAT testing is an important aspect of this market. STAT tests are required by physicians and surgeons during surgery and in emergency departments because of the timesensitive nature of the needed treatments and the rapid decisions required. Furthermore, based on the surface plasmon resonance (SPR) principles, Quantech has developed a menu that provides different tests for a physician to help make a treatment decision. Some of the tests that can be run quickly include a test for three cardiac markers (myoglobin, CK-MB, and Troponin I) for heart attacks, a quantitative test for pregnancy (to determine whether it is safe to perform some procedures), a blood count panel, a kidney panel, and a coagulation panel.

The Japanese are very practical minded, and their approach to biosensor development is no exception. They have determined that biosensor technology is and will have a significant impact on daily life. Dambrot (1999) indicates that quite a few Japanese companies are making a wide variety of biosensors. Some of these include Dainippon Printing (immune-system monitoring), INAX (in vitro measurement of albumen in urine), Itoh (high-sensitivity meat freshness), Nissin Seifun (fruit ripeness), and Toto (health and medical monitoring). As around the world, in Japan the main application for biosensors will be disposable biosensors in the health care field. Other applications include the determination of food quality and in telemetric biosensors (for monitoring fatigue in sports, athletics, and a driver's state of alertness). Professor Karube and others at Tokyo University are developing a "toilet sensor" to monitor various bodily functions. This will be especially helpful in managing the health of the elderly.

Dambrot provided an estimate of $16 billion for the Japanese biosensor market for the year 2000. This is seemingly much higher than the numbers provided earlier in this chapter, and this the number is for Japan only. Once again, this highlights the discrepancies from different sources, as expected, for the worldwide biosensor market.

In her report on the market for biosensors, Rajan (1999) indicates that a substantial amount of money and much effort is required to bring a biosensor to the market. However, with the ever-increasing research in this area the costs are bound to decrease, and biosensor applications should be able to expand as well. The overall biosensor market for 1998 was estimated at $765 million, with medical sales of $692 million constituting, as expected, a large percentage (90.4%). With the growing concerns of health care and personal well-being, Raj an estimates that by 2003 the medical sales share will increase to 93% of the total sales. She estimates that the medical sales of biosensors will exceed $1.5 billion.

The sales of biosensors may be estimated for 2001 to 2003 using the 17.0% average annual growth rate provided by Rajan. Starting with the estimate of $765 million for 1998, the estimates for 1999, 2000, 2001, 2002, and 2003 are (in $ million) 895, 1047, 1225, 1433, and 1677, respectively. Similarly, starting with an estimate of $692 million for the medical sales of biosensors in 1998 and using an average annual growth rate of 17.6%, the estimates for 1999, 2000, 2001, 2002, and 2003 are (in $ million) 814, 957, 1125, 1323, and 1556, respectively. Other areas where growth of biosensors is expected include industrial, environmental, government, and research. However, the combined sales of biosensors in these areas will continue to be only a small fraction of the total sales.

For 2000 and beyond estimates have been presented for worldwide sales of biosensors ranging from $2 billion (Rajan, 1999) to about $20 billion (to about $16 billion for Japan alone) (Quantech, 2000). Keeping these estimates and projections in mind, it is perhaps conservative to say that in the first 3-5 years of the new millennium, the overall worldwide sales of biosensors should be around $10-12 billion.

At present BIACORE is not one of the major players in the biosensor market. However, it does manufacture and sell the surface plasmon resonance (SPR) biosensor that is becoming increasing popular as various organizations are finding different applications for it. Although the sales figures for the BIACORE biosensor for the years 1995 to 2000 are available (BIACORE, 2001), these figures include the instrument and the reagents and other materials required for it (see Table 13.1 and Fig. 13.1). No sales figures for the instrument alone were available. A conservative estimate is that the reagents costs account for about 15%-20% of the total sales. The BIACORE 3000 that came out in 1998 is estimated to cost about $275,000. Using the figures in Figure 13.1 we can obtain a predictive equation to predict the sales figures for 2001 to about 2005. As expected, if we used more parameters, we could obtain a better predictive equation.

Table 13.1 show the sales figures in SEK (Swedish Kroner). These sales figures may be predicted using the following two-parameter equation:

Sales SEK (1000s) = (246333.2± 18557.7)[year]0'21 ±0 06, (13.1)

TABLE 13.1 Total Sales Figures for the BIACORE AB (2001)

Year Sales SEK (1000s)

1995 209012

1996 260352

1997 266523

1998 288753

1999 340414

2000 361600

where year 0 refers to 1995, year 1 refers to 1996, and so on. Using this equation, the coefficient for regression had a value of 0.816. The fit is reasonable; however, a better fit may be obtained with a four-parameter equation (along with a higher coefficient of regression).

Using the four-parameter equation, the sales figures given in Table 13.1 may be given by

Sales SEK (1000s) = (255741.2±8867.4)[year]a088±0043

As expected, the four-parameter equation fits the sales figures presented in the

380000 360000 -ST 340000 § 320000 ~ 300000 $ 280000 jg 260000 </> 240000 220000 200000

Year (starting with 0 as 1995)

FIGURE 13.1 Sales figures (in Swedish Kroner, 1000s) for the BIACORE biosensor for 1995 to 2000. 1995 is taken arbitrarily as year zero. Approximately U.S.S 1.0= 10 Swedish Kroner.

table rather well. The coefficient of regression in this case is 0.964 (for the later part of the figure, which is more important in making sales projections for 2001, 2002, and beyond). It would, of course, be of tremendous interest, at least for BIACORE AB organization, to see if Eq. (13.2) does accurately predict the sales figures for the early years of the new millennium.

As to be expected during the development and bringing to market of any (profitable or potentially profitable) technology, there are claims and counterclaims. An example is the recent misunderstanding between Oxford Gene Technology (OGT), Oxford, England, and Affymetrix, Santa Clara, California, regarding claims to critical DNA microarray technology developed by OGT (Robertson, 2001). The ruling went against OGT, and that company is expected to lose millions of dollars (or British pounds) in royalties. However, Robertson adds that this decision should not hamper the development of the chip industry, especially since new entrants in this area are bound to move to alternative microarray systems. Thus (biosensor) companies need to be nimble, as mentioned earlier, and they need par excellence research and manufacturing abilities. Robertson very nicely points out the "intellectual minefield" that is prevalent in this area. Perhaps this is also true of areas other than biosensor development.

It would also be appropriate to provide an example of some emerging trends in biosensor development that seem to exhibit market and/or application potential. Piletsky et al. (2001) indicate that molecularly imprinted polymers (MIP) are particularly suitable for use in biosensor development. MIPs exhibit high affinity and selectivity (similar to natural receptors), are more stable than their natural counterparts, are easy to prepare, and are easily adaptable to different applications. Also, MIPs can be synthesized as receptors for analytes for which no enzyme or receptor is available. Besides, they are cheaper than natural receptors. Also, an important aspect that is often neglected when analyzing newer techniques is the manufacturing and fabrication capabilities of the technique. Fortunately, as Piletsky et al. indicate, MIPs (or the polymerization step) are easily amenable to microfabrication steps involved in biosensor technology. These authors note that MIP sensors have been developed for herbicides, sugars, nucleic and amino acid derivatives, drugs, toxins, etc. The authors suggest that the market for multisensors (electronic noses and tongues) could be worth as much as $4 billion. In their opinion MIP sensors are well suited to make an impact in the area of testing product quality as well as in the perfumes and wine industries.

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