Strategic Analysis of the World Oligonucleotides Markets

Innovation Integral to Increased Adoption of Oligonucleotide Technologies

01-Aug-2004 - United Kingdom

London, UK. Poised on the brink of phenomenal growth, the oligonucleotides market offers a plethora of opportunities to the enterprising investor. Recent analysis by Frost & Sullivan (http://pharma.frost.com) estimates that the total global market for oligonucleotides is likely to grow from USD 340.0 million in 2003 to USD 776.0 million in 2010.

Demand for innovation is extremely high in the field and both academia and pharma-biotech sectors have demonstrated an eagerness to research potential applications. While current applications include basic research, drug target screening and therapeutic development, future applications are expected to be even more advanced and include agriculture, gene therapy and disease prevention.

With oncology and infectious indications on the rise, pharmaceutical and biotechnology companies have found the idea of oligonucleotide-based therapeutics particularly exciting and have been trying to popularise their uptake by raising public awareness. The changing patent and license situation is also likely to play an instrumental role in expanding the market by creating a larger pool of companies offering oligonucleotide technologies.

"The industry has been greatly encouraged by the prospective benefits of RNA-interference (RNAi), second generation antisense compounds and CpG technologies," says Research Analyst Dr. Raju Adhikari from Frost & Sullivan. "A number of antisense and aptamer compounds have already been approved and almost 20 antisense compounds have found acceptance in clinics."

The emergence of RNAi technology as the 'Breakthrough of the Year' (Science magazine, 2002) also promises to positively impact the therapeutics market. Capable of 'silencing' the expression of target genes in a variety of organisms and cells, RNAi is expected to be adapted as an integral tool in drug target validation studies.

The failure of a few key antisense compounds to deliver oligonucleotides inside cells, tissue organs and bodies is, however, expected to impose a serious restraint on the market. In fact, the development of effective delivery technologies has become a matter of crucial concern and many biotechnology companies have been trying to address the issue by working in tandem with the research community. Some of them have even made extensive investments in developing in-house research systems. The adoption of oligonucleotides with an increased half-life is also expected to maximise bioavailability and delivery.

"The companies that are capable of developing products by keeping pace with consumer needs and preferences are likely to experience substantial growth," notes Dr. Adhikari. "Competitiveness in the market has been rising constantly, and more and more companies have been moving into the niche oligonucleotides market."

Fierce competition and the resultant price sensitivity have ensured that only participants capable of presenting the highest ratio of value to cost to customers perform well. Further, participants are inclined to invest only in technologies that are capable of giving a return on investments.

High throughput and scalable technologies that reduce manufacturing costs are gaining popularity as they allow participants to economise the cost of production, and thereby achieve the long-term cost of goods.

Manufacturers have also been investigating the potential of setting up plants in low cost regions such as India, China and Eastern Europe. Further, they have been attempting to secure long-term supply contracts with consumers and manufacture oligonucleotides depending on consumer preferences and demand trends.

For instance, the positive response towards RNAi technology is expected to give the RNA oligonucleotides market a boost and it is likely to grow at a CAGR of 29 per cent from 2002 to 2009, as opposed to the 8.7 per cent of the DNA oligonucleotides market. However, on the whole, the DNA oligonucleotides market is expected to be larger than the RNA oligonucleotides market - growing from USD 300.0 million in 2003 to USD 470.0 million in 2008.

"There has been a rising demand for comparative analyses of the DNA and RNA oligonucleotides markets among investors," says Dr. Adhikari. "Manufacturers capable of providing a complete portfolio of oligonucleotide products in a 'one-stop shop' are likely to prove successful."

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